SGI.L Regulatory News (SGI)

THE STANLEY GIBBONS GROUP PLC

FOR IMMEDIATE RELEASE 23 March 2012

THE STANLEY GIBBONS GROUP PLC ("the Company" or "the Group")

The Stanley Gibbons Group plc, whose principal businesses comprise Stanley Gibbons, Fraser's Autographs and Benham First Day Covers, today announced its audited results for the year ended 31 December 2011.

Key Financial Highlights

·; Sales of £35.7m (2010: £26.4m) up 35%

·; Online sales of £4.3m (2010: £2.5m) up 72%

·; Statutory profit before tax of £5.1m (2010: £4.3m) up 19%

·; Adjusted profit before tax, before exceptional charges, of £5.2m (2010: £4.5m) up 17%

·; Earnings per share of 18.5p (2010: 15.2p) up 22%

·; Adjusted earnings per share of 18.9p (2010: 15.7p) up 20%

·; Proposed final dividend of 3.5p per share (2010: 3.25p per share), up 8%, giving a total dividend for the year of 6p (2010: 5.5p) up 9%

·; Cash generated from operating activities in year of £4.1m (2010: £2.2m). Cash funds at 31 December 2011 of £3.2m (2010: £1.8m)

·; Stock levels at 31 December 2011 stated at historic cost of £16.8m (2010: £14.8m), representing 280 days stock held (2010: 363 days), a reduction of 23%

Key Operational Highlights

·; Increase in online revenue following redesign of core website, www.stanleygibbons.com, at the end of May with conversion rates doubling over past six months

·; Increase in sales to investors and high net worth clients, benefitting from effectiveness of marketing campaigns and diversification into different collectible asset classes

·; Development of trading relationships and sales into the Chinese Market

·; Strong contribution from client recruitment in Jersey, Channel Islands, and Hong Kong investment offices

·; Strengthened the auction division, with the appointment of Richard Watkins as "Head of Auctions" in May 2011, and recently secured a major British Commonwealth stamp collection, "The Arnhold Collection", with an auction estimate in excess of £1m. The sale will be held over two auctions in May and September 2012

Outlook

·; Focus on developing the online strategy as the internet and other forms of electronic communication will become our primary sales channel

·; Review strategic opportunities to progress this strategy with the aim of accelerating and maximising returns from an online trading platform

·; International expansion provides a leverage opportunity for our brand and sales. During 2012, potentially open new satellite investment offices, which are relatively low risk and similar to a "franchise model", whilst progressing identified opportunities in the US

·; Benefit from the sale of commemorative collectibles in relation to the celebration of the Queen's Diamond Jubilee together with the substantial interest expected both in the UK and overseas for collectibles produced specifically to mark the London Olympics 2012

·; Aim to launch a rare stamp fund in the collectibles market, subject to regulatory approval

Martin Bralsford, Chairman, commented:

"The record performance of the Group last year and a positive start to this, with our order book at record levels, is the result of a combination of the strong market for rare collectibles and the achievements of our management in execution of our strategy.

There is evidence of a substantial shift in clients' behaviour away from traditional dealing and mail order to the internet and auction channels. Consequently, we have invested more Group resources in these services.

We have begun to see the results of these investments, with our websites generating one-eighth of Group revenues in 2011 and the recent procurement of a first major collection for our auction business. The forthcoming year will see greater returns from our online strategy as it progressively becomes our primary sales channel for non-investment grade items. We expect our long term growth in our traditional business to be driven by an online and auction based model.

Our international development through the opening of overseas offices complements this strategy. They provide a key geographical presence to promote awareness of our online services and also unique investment grade items in collectibles and auction services.

We have adequate cash reserves available to finance growth opportunities, and are reviewing a number of potential acquisitions which would strengthen and complement our overall service capability. At the same time we will maintain our progressive dividend policy.

Your Board remains very positive about the future of your business based on the underlying strength of the collectibles market, our brand and the expected returns from the execution of our strategy".

For further information, contact:

The Stanley Gibbons Group plc

Michael Hall, Chief Executive +44 (0) 1534 766711

Peel Hunt LLP, NOMAD/Broker

Dan Webster/Matthew Armitt/Richard Brown +44 (0) 20 7418 8900

Chairman's Statement

Introduction

These record results of The Stanley Gibbons Group plc are only one of the achievements of our management for the year ended 31 December 2011. The exceptional growth in sales and profits achieved was after charging expenditures in 2011 to create future growth. I believe we are now at the brink of realisation of the benefits of prior year efforts in building a strong base.

More important in the current economic climate, the strength of our business model is re-inforced by the strong generation of cash in the year. The Group enjoys financial security and substantial resources to fund future growth opportunities at the same time as maintaining our progressive dividend policy, which we believe is greatly appreciated by Shareholders, in comparison with the low running yields elsewhere in the financial markets.

The positive overall result is the product of both management's progress made in delivering against the Board's strategic objectives and also the favourable current trends in collectibles. The strong market conditions are partly attributable to the increasing international interest in the ownership of tangible assets generally as a means of both storing and growing wealth in the current volatile economic climate against low yields on traditional saving products.

Financials

Turnover for the year was £35.7m, over one-third up on the previous year and profit before tax was £5.1m, up nearly one-fifth. Underlying profit before tax, excluding one-off exceptional charges incurred in the rationalisation of the Publishing division, was £5.2m. EBITDA, which is calculated as operating profit before all exceptional items and non cash charges, was £5.7m (2010: £4.7m).

Earnings per share was 18.54 pence (2010: 15.22 pence), representing an increase of 22%. Adjusted earnings per share, excluding exceptional costs, were 18.9 pence (2010: 15.7 pence).

Dividend

Your Board is pleased to recommend to Shareholders for their approval at the forthcoming AGM, a final dividend of 3.5 pence per share (2010: 3.25 pence). This would give a total dividend from 2011 earnings of 6.0 pence (2010: 5.5 pence), an increase of nearly one-tenth on last year and covered over 3 times by earnings in 2011.

The proposed dividend increase for 2011 is lower than the growth in profits, recognising our policy of re-investment of profits to fund attractive future growth opportunities.

Key Operational Highlights

Online

Key developments in our online offering made in the year towards the aim of providing a much improved online experience to the collecting community were:

·; Newly designed website for autographs, www.frasersautographs.com, launched in February 2011. Online revenues of autographs were up 57% in the year.

·; Core website, www.stanleygibbons.com, redesign and new functionality launched at the end of May 2011. Online revenues for the second half of the year were up 67%.

·; New high net worth client leads sourced from the website generated sales of £3.4m (2010: £1.8m), up 89%, benefiting from improved content and presentation of our investment services online.

·; New websites enabled improved search engine optimisation and better management of regular exclusive web offers increasing site traffic. Conversion rates from site visitors doubled over past six months.

·; Our extensive stockholding of lower value stamps made available to purchase online for the first time using this cost effective distribution channel.

·; Online price catalogue and stamp album management functionality developments progressed during the year, enabling collectors to access up to date stamp pricing information online.

We are currently reviewing strategic options before progressing to the next stage of the planned online developments with an aim of accelerating and maximising returns from the launch of an online trading platform and auctions.

In addition to the proposed trading platform launch, we also intend to develop our online services in 2012 to include:

·; Enhanced online stamp catalogue to comprise specialised philatelic information

·; Launch of foreign language versions of website to support international developments

·; Provision of mobile applications for our primary online content

We see the internet and other forms of electronic communication to clients as progressively becoming our primary sales channel over time and believe the reputation of our brand combined with our offering in this respect will consolidate our position as leader in our core markets.

Overseas development

We opened a new office in Hong Kong at the end of September, contributing £0.5m of sales to Hong Kong residents and generating a profit in its first quarter of trading. Furthermore, we developed trading relationships in Greater China during the year enabling a further £0.5m of sales directly into the Chinese market.

The move to an investment sales office in Jersey, Channel Islands, including our corporate office, was completed in August. That, together with the continued success of our investment offices in Guernsey, generated an increase in sales to Channel Islands residents of 149% to £4.9m (2010: £2m).

We completed our initial investigations of opportunities to grow into the United States market, which still represents the biggest collectibles market in the world, despite the recent growth in the number of collectors in China and India. The Stanley Gibbon's brand is already well recognised in the United States and a number of options were identified to develop sales into that market. We intend to begin progressing those opportunities during the current year.

Our expansion plans outside the United Kingdom are made easier by the fact that the Stanley Gibbons brand has worldwide recognition. Our goal is simply to gain market penetration into the most lucrative overseas markets, whilst maintaining strong control over activities conducted from our satellite offices. During 2012, we will be investigating the potential opening of new offices in Switzerland, Singapore, Monaco, Gibraltar, Brazil and, closer to home, Edinburgh, all significant wealth management centres. This represents a relatively low risk aspect of our strategy based on the application of our prestigious brand presentation and values to a wider audience, similar to a "franchise" model.

Auctions

We instigated a number of structural changes within the auction division in the year as part of the strategy to grow our auction brand in light of the increasing amount of business being transacted through this route in recent years. Structural changes included the appointment of Richard Watkins as "Head of Auctions" in May 2011. Richard has a wealth of experience having previously held senior positions in Christie's, Spink and Grosvenor where he was, latterly, Managing Director.

We believe we now have a strong team to take forward this part of our strategy and have recently secured a major British Commonwealth stamp collection, "The Arnhold Collection", with an auction estimate in excess of £1m. The sale will be held over two auctions in May and September.

Other collectibles

We successfully diversified our product offering in the year to include rare coins, commemorative medals and military medals. We intend to continue to develop our internal expertise in these areas providing material growth opportunities going forward.

The Benham Group acquisition, completed in September 2010, delivered a strong full year trading performance, contributing sales of £2.6m and profits, after attributable financing costs, of £0.5m.

Opportunities exist in the current year to benefit from the sale of commemorative collectibles in relation to the celebration of the Queen's Diamond Jubilee together with the substantial interest expected both in the UK and overseas for collectibles produced specifically to mark the London Olympics 2012.

Investment services

The persistent economic volatility, together with higher response rates from our promotional activities, has enabled us to continue to recruit new high net worth investment clients. Many of our investment clients have developed such an interest in their investments to the extent that they could equally be classified as collectors.

People

It is not enough just to have the right strategy in an exciting growth market to succeed. It will always come down to having the right people to execute the strategy successfully. We have made some important enhancements to our management team in recent years and business performance thus far indicates the success in putting in place the right resource to deliver on our plans. On behalf of the Board, I wish to extend my thanks to our dedicated and professional team and their contribution to the record result delivered in 2011.

Board

Your Company's management team was further enhanced in February 2012 with the appointment of John Byfield as Corporate Development Director reporting to our Chief Executive. John had previously acted as a non-executive director of the Group since April 2011 and possesses a wealth of experience, which will enable the acceleration of the achievement of some of our business objectives. John will specifically assist with the execution of the Group's acquisition strategy of businesses that add complementary brands or otherwise enhance the strategic objectives of the Group.

Donal Duff, our Chief Operating Officer, has also taken over responsibility as Finance Director on the departure of our former Finance Director, Mark Henley, at the end March 2012. Prior to his current role, Donal was Finance Director of a large AIM listed conglomerate and is already building the resource in our Group Finance team. I take this opportunity to thank Mark for his valuable contribution to supporting the growth of the Group over the past five years.

Following completion of two terms of office Bob Henkhuzens has decided to retire from his position as non-executive director at the conclusion of the AGM in May 2012. Bob served not only as Chairman of the Audit Committee and member of the Remuneration and Nomination Committees but also as Interim Chairman of the Company in 2007. We thank him for his outstanding commitment to good governance and his wise counsel.

Outlook

We have never started a financial year with the order book at such a high level as we have in 2012. However, it is always about "right product at the right time" and we must constrain our investment sales to those high quality items that we can source realistically at fair prices. We are now seeing a growing acceptance from the wealth management sector at large that allocating a small but significant proportion of wealth into collectibles as both a means of diversification and a long term hedge against inflation is a valid proposition.

We have been in discussions for a number of years with various external parties regarding the setting up of a rare stamp investment fund. The economic climate during the past few years has naturally made many investors and advisers wary of new investment products and it was felt that ultimately raising the necessary capital would prove harder in practice than in theory.

We are creating an appropriate fund structure to enable interested parties to invest in the collectibles market, our long stated objective. Our aim is to be in a position to launch a rare stamp fund, subject to regulatory approval in 2012. The opportunity to launch a rare stamp fund provides an exciting opportunity and potentially could generate new and recurrent profit streams for the long term.

Martin Bralsford, Chairman

22 March 2012

Operating Review

Operating results for the year

Overview

Group turnover increased by £9.3m (35%) compared to last year. The profit before tax for the year of £5.1m represented an increase of 19%. Earnings per share were 18.54p (2010: 15.22p), up 22%. Adjusted profit before tax, when excluding exceptional costs, was £5.2m and adjusted earnings per share were 18.87p (2010: 15.69p), up 20%.

The key contributors to the growth in sales and profit in the year were:

·; Increase in sales to investors and high net worth clients, benefiting from effectiveness of our marketing campaigns and diversification into rare coins and Chinese stamps

·; Strong contribution from client recruitment in our new investment offices in Jersey and Hong Kong

·; Increase in online revenue following redesign of our core website, www.stanleygibbons.com, at the end of May

·; Strong full year's trading from the Benham Group acquired in September 2010

·; Development of trading relationships and sales into the Chinese market

The gross margin percentage for the year was 38.7% compared to 43.8% in the prior year. The lower gross margin percentage is reflective of the substantial change in sales mix in the year with an increase in the sale of high value rarities at lower trading spreads. Lower margins are also generated in trading of Chinese stamps, rare coins and military medals. The gross margin percentage was further impacted by an increase in the provision against previous investment products sold with guaranteed returns of £0.3m and a one-off accounting adjustment of £0.1m relating to prior years.

Overheads were £1.5m (21%) higher than the prior year at a total of £8.6m. Like-for-like overheads, excluding the Benham Group acquisition, were up £0.8m (13%). Overhead increases primarily related to increased salary and marketing costs to support the increasing levels of business. Overheads in the year also included an increase of £0.3m relating to higher IT and website development costs and depreciation charges.

Philatelic Trading and Retail Operations

Philatelic trading and retail sales were £8.3m (43%) higher than last year with profit contribution up by 29%. Growth was achieved through a combination of increased trading to collectors, investors and members of the trade.

Sales in the year included £1.1m (2010: £1m) of Chinese rare stamps. Despite high levels of demand for this lucrative area of the market experienced in the year, potential growth was restricted by the inherent difficulties in sourcing quality material in a competitive market to satisfy such demand. Following the opening of our new Hong Kong office in September last year, we hope to increase opportunities to acquire material directly in the market to satisfy demand.

Sales to residents of the Channel Islands were up by £2.9m benefiting from our move to larger investment offices in Jersey in August. The Hong Kong office, opened at the end of September, generated additional sales of £0.5m in the last quarter of the year. Philatelic sales further benefited from the sale of "fine used" penny blacks to the Chinese market.

Retail sales from 399 Strand were up 15% primarily the result of our investment of £0.8m in the refurbishment of our retail premises in the first quarter of 2010. We have further investment in refurbishments scheduled for 2012 to enhance the presentation of our auction areas and to improve the quality of the offices occupied by our staff.

Auction revenues were slightly down (3%) on the prior year with profit contribution down £0.1m, reflecting the fact that our auction division was undergoing a period of change as we strengthened the team and invested in developing the underlying strength of our auction service. We expect the benefits of these investments to generate growth during the current year.

Publishing and Philatelic Accessories

Publishing and philatelic accessory sales were £0.2m (5%) lower than last year although profit contribution was maintained in line with the prior year. Following the completion of the rationalisation programme in April, our Publishing division delivered an improved performance in the second half of the year. Profit contribution in the second half of the year was up 8% from the corresponding prior period on lower revenues, showing the benefit of the improved efficiencies implemented during the first half.

Lower sales from the prior year reflected a weaker publishing schedule together with production delays experienced during the period of reorganisation which were caught up to some extent by the year end. We also experienced a reduction in orders from trade distributors of our publishing titles in the year as many reduced their order sizes reflective of the challenges they are experiencing in the current economic climate.

Despite lower sales, production efficiencies including negotiation of lower print costs on our key catalogue titles, helped to improve profitability in the second half. Furthermore, we improved the online distribution of our catalogue titles in 2011 including a 9% increase in online sales through our own website together with extending the distribution through eBay.com and Amazon.com, contributing additional sales of £0.2m.

Dealing in Other Collectibles

Sales of other collectibles were £1.1m (30%) higher, although profit contribution was down by £0.2m (23%). The lower level of profits despite growth in sales reflects a substantial change in the mix of sales to lower margin products compared to the prior year. Dealing in other collectibles can be further analysed as follows:

Autographs, historical documents, memorabilia and record sales were £1.7m (52%) down in the year with profit contribution down by 86%. The fall in revenues and profits were due to lower sales in the year of high value rarities to investors. This was primarily the result of our marketing focus being directed towards new investment offerings of Chinese stamps, rare coins and military medals. We are confident that the strong stockholding of rare historical documents and signatures we hold will ensure that we can re-build sales in rare signatures and historical documents during the current year.

Despite the reduction in autograph sales to investors, sales to collectors and trade clients were up 44% in the year, benefiting from high value sales of rare historical documents and increased sales online following the launch of the new www.frasersautographs.com website in February 2011.

We successfully diversified our product offering to include rare coins and military medals in the year, generating additional sales of £0.8m in the seven-month period since we commenced this offering and profits of £0.1m. We aim to continue to develop further into these markets during the current year and intend to strengthen our in-house knowledge to ensure that we can provide the quality of service and expertise in these new areas that our clients would expect. Both of these markets possess similar investment qualities to the rare stamp market and offer clients the means of further diversifying their investments into collectibles.

The Benham Group acquisition, completed in September 2010 for a purchase consideration of £1.5m, delivered a strong full year trading performance in 2011, contributing sales of £2.6m and profits of £0.6m. Trading in the year benefited from £0.3m of sales through our Chinese trade distributors of other collectibles and the sale of Royal Wedding commemorative collectibles.

We completed a small acquisition in July 2011 of the assets and business of "Greetings Direct", purchased from Flying Flowers (Jersey) Limited. The purchase was made at a consideration representing 10% of the net revenues of the business for the first twelve months after acquisition. The business contributed additional revenues of £0.1m in the year and provides synergies with our existing database of club members to provide future revenue and profit streams.

Internet Development

Sales reported within this department relate to online subscription revenue only. Online sales were up 30% on the prior year, when excluding investment sales. We substantially redesigned our core website, www.stanleygibbons.com, during the year resulting in a re-launch at the end of May 2011.

In the six-month period since re-launch, average monthly unique visitor numbers showed an increase of 83% with a 126% increase in the number of page views. Conversion rates from visitor numbers have increased from 1.03% to 2.11%, which remain very low meaning there is substantial room for improvement as we progressively develop our online offering.

Corporate Overheads

Corporate overheads were £0.2m (10%) higher than last year, representing primarily higher IT resource and web development costs in support of our website development projects, from which, returns are beginning to materialise.

Corporate overheads include accounting charges, which have no cash impact, in respect of our defined benefit pension scheme and IFRS share option charges totalling £0.2m (2010: £0.2m).

Exceptional Operating Costs

Exceptional operating costs incurred in the year were £0.11m (2010: £0.15m). These primarily relate to the staff and legal costs in respect of the re-organisation of the Publishing division completed in the year.

Strategic Focus and Opportunities

We have made substantial investment in recent years in our systems, websites and in recruiting the right quality team to enable us to exploit the opportunities within our market. We are now beginning to enjoy the benefits of these investments reflected in the strong performance over the past year.

In particular, we are now crystallising some returns from the investment in our online strategy, although this remains in its infancy from where we intend to be in the future. We are currently reviewing strategic options to ensure that we maximise the potential returns from the technical developments recently undertaken.

We expect long-term growth to be driven predominantly by an online and auction based trading model in all key collectible categories. We have already taken the first steps towards achieving these goals, with some measurable success to give us confidence in the validity of our aspirations.

We intend to become progressively more of a "market maker" or "market facilitator" generating commission income as agent. Consequently, the traditional collectibles dealing model that requires profit increases to be supported by a corresponding growth in assets (predominantly inventory), does not apply to our strategic model. As such, we expect our return on capital to improve considerably as the implementation of our strategy progresses. 

We remain very positive about our future based on the underlying strength of our business and expected returns from the implementation of our strategy. It is also reassuring that the collectibles market has shown remarkable resilience and support during the current economic crisis. It is this stability and growth that is encouraging an increasing number of individuals to seriously look at the collectibles market for the first time as a means of protecting and growing their wealth for the long term.

Michael Hall, Chief Executive

22 March 2012

Financial Review

The Group's cash funds at 31 December 2011 were £3.2m, compared to £1.8m at the end of last year. The Board is satisfied that the Group has sufficient funds to meet its forecast working capital and capital expenditure plans over the next 12 months.

Surplus funds are currently invested in short term deposits into UK clearing banks which generate low rates of interest in the current economic climate but with low risk. It is Group policy to re-invest cash funds into business assets, which deliver a higher return on capital including its inventory of rare collectibles, IT systems and value enhancing acquisitions. It is not Group policy to engage in speculative activity using financial derivatives or other complex financial instruments.

At 31 December 2011, the Group had bank borrowings of £0.44m (2010: £0.69m) with NatWest Bank PLC. In total £0.75m was borrowed over a term of three years (commencing September 2010) at an interest rate of LIBOR plus 4%. The deferred element to the consideration on the purchase of the Benham Group of £0.75m, due to the vendors one year after completion, carried an interest rate of LIBOR plus 2.25% and was settled in full in September 2011. The Group also currently has use of an overdraft facility, if required, of £1.0m. This facility is renewable in April 2012.

Balance Sheet and Cash Flow

Cash generated from operating activities was £4.1m (2010: £2.2m). A summary reconciliation of the operating profit to cash generated from operating activities is given below:

The strong cash generation in the year reflects the conversion of operating profits into cash. Operating profits, after adding back accounting charges, which do not affect cash flows, were £5.7m. Non-cash charges include depreciation, amortisation and accounting provision increases. The cash generated in the year funded the payment of the deferred consideration due on the acquisition of The Benham Group of £0.75m.

We continued to re-invest cash generated in our stockholding of rare collectibles. As a result, stock levels at 31 December 2011 were £16.8m (2010: £14.8m), representing an increase of 14%. The increase in stock includes the build up of a stockholding in rare coins and military medals of £1.1m. This is in line with our strategy and provides scalability and diversification within our investment offering.

The increased stockholding must be considered in conjunction with the increased levels of trading experienced in the year. At 31 December 2011, the company held stock with a cost representing 280 days (2010: 363 days). The number of day's stock held has reduced by 23%, illustrating an improved stock turn on the prior year.

Our increased investment in our stockholding was predominantly in high value rare collectibles, which we believe to be a better investment of Shareholder Funds than holding surplus cash balances, which do not generate a material return.

The increase in cash during the year of £1.4m (2010: decrease of £1.2m) is net of dividends paid of £1.4m (2010: £1.3m), tax paid of £0.4m (2010: £0.4m) and repayment of borrowings of £0.25m (2010: 0.06m).

The Group invested £0.6m (2010: £1.7m) in capital expenditure during the year and can be analysed as follows:

Such capital investment is expected to increase the long-term value of the business and to generate substantial cashflows in future accounting periods.

Finance income/costs

Group cash funds generated £1,000 (2010: £2,000) bank interest for the year. Included within "Finance income" is £52,000 (2010: £34,000), representing the difference between interest cost and the expected return on assets in the Group's defined benefit pension scheme under the disclosure requirements of IAS19 "Employee Benefits".

Finance costs of £56,000 (2010: £19,000) include interest payable of £41,000 (2010: £15,000) in respect of financing the Benham Group.

Taxation

The tax charge for the year (excluding deferred taxation) was £441,000 (2010: £462,000) incurred on UK and Hong Kong profits, resulting in an effective rate of 8.5% (2010: 10.7%). Profits from Channel Island trading companies are currently subject to tax at zero percent.

Dividends

The Board is recommending a final dividend of 3.5p per Ordinary Share (2010: 3.25p) giving a total dividend of 6p for the year ended 31 December 2011 (2010: 5.5p). Subject to Shareholders' approval, the final dividend will be paid on 21 May 2012 to Shareholders on the register at 10 April 2012.

Accounting Policies

Accounting polices, which remain unchanged from the prior year, are detailed in Note 1 to the Financial Statements.

Donal Duff, Finance Director

22 March 2012

Consolidated statement of comprehensive income

for the year ended 31 December 2011

Statement of financial position

as at 31 December 2011

Statement of changes in equity

for the year ended 31 December 2011

Statement of cash flows

for the year ended 31 December 2011

1. Basis of preparation

The financial information set out in this announcement does not constitute the Group's statutory financial statements for the years ended 31 December 2011 and 31 December 2010.

The financial information for the year ended 31 December 2010 has been extracted from the audited statutory financial statements for that year which include an unqualified audit report and have been filed with the Registrar of Companies in Jersey. The financial information for the year ended 31 December 2011 has been extracted from the audited financial statements of the Group for the year ended 31 December 2011 which were approved by the Board of Directors on 22 March 2012.

2. Dividends

Subject to approval at the AGM on 2 May 2012, the final dividend of 3.5p per Ordinary Share will be paid on 21 May 2012 to all shareholders on the register on 10 April 2012.

3. Earnings per ordinary share

The calculation of basic earnings per ordinary share is based on the weighted average number of shares in issue during the year. Adjusted earnings per share has been calculated to exclude the effect of exceptional operating costs. The Directors believe this gives a more meaningful measure of the underlying performance of the Group.

For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares. The Group has only one category of dilutive ordinary shares: those share options granted to employees where the exercise price is less than the average market price of the Company's ordinary shares during the year.

4 Cash generated from operations

5. Annual report and accounts

The Annual Report and Accounts for the year ended 31 December 2011 will be posted to shareholders shortly. Further copies can be obtained from the Company Secretary at 18 Hill Street, St Helier, Jersey, JE2 4UA, or the Company's Broker, Peel Hunt LLP at Moor House, 120 London Wall, London EC2Y 5ET or can be viewed on the Company's website at www.stanleygibbons.com.