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20 Jan 2009 07:00
For release at 7am on 20 January 2009
The Stanley Gibbons Group Limited
("Stanley Gibbons" or the "Company")
Trading Update
As it enters its close period, the Board of Stanley Gibbons wishes to provide an update to the market on its expected results for the year ended 31 December 2008 and current trading.
2008 trading results
Overall, the results for the year are encouraging, demonstrating a continuing high level of demand for the Company's investment products linked to the underlying assets of stamps and collectibles. Whilst the reported outcome for the year is likely to show turnover broadly in line with that reported in 2007, the resulting profit before tax is now estimated to be below earlier market expectations. However, due to a lower tax rate, earnings per share are expected to be similar to 2007.
During the year, the Company entered into approximately £3.4 million in value of sales transactions on extended credit terms to several key investment clients. Since these sales were on terms including a 12 month buyback guarantee, the Board has decided to defer both this revenue and the associated profit into 2009, when the guarantees will have expired.
The clients have paid a 10% cash deposit on these contracts and the Board does not expect the guarantees to be called. The Board considers that the deferral of the revenue into 2009 is prudent and in line with best market practice.
Proposed Dividend
The Company's balance sheet remains strong and is debt free despite an increased investment during the year in its stockholding of scarce, high value rarities. The Board intends to demonstrate its confidence in the outlook for the business by recommending to Shareholders a final dividend similar to last year.
Current trading and outlook
Recent trading is showing a high level of demand for the Company's investment products which are benefiting from the current low interest rate environment making the returns from investing in collectibles more appealing. The current weakness in the value of Sterling against most other major currencies presents some exciting marketing opportunities to substantially grow sales internationally to US Dollar and Euro based investors.
Consequently, the Directors remain confident in the long term growth potential of the Company's businesses and in the ability for sales and profits to grow again in 2009.
The market in rare stamps continues to be strong, evidenced by the high value of realisations from recent auction sales.
Martin Bralsford, Non-Executive Chairman commented:
"I am more than satisfied with the Company's performance during 2008, a year of challenging economic and financial conditions. More particularly, when considering the 2008 results including the sales we are deferring into 2009, underlying sales would show growth of over 10% year on year and profits would also have shown an improvement at the same time as increasing revenue investment in long term growth opportunities.
Based on current trading, our outlook for 2009 remains optimistic."
For further information, contact:
The Stanley Gibbons Group Limited
Michael Hall, Chief Executive +44 (0) 1481 708 273
www.stanleygibbons.com
Seymour Pierce Ltd, NOMAD/Broker
Jonathan Wright +44 (0) 20 7107 8000
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