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Stanley Gibbons reports another strong half

Stanley Gibbons’ (LON:SGI) specialist collectables business continues to go from strength to strength, as the company reported another half of sustained growth. In the first half ended 30 June 2010, Stanley Gibbons increased sales by 24% to £11.9m, pre-tax profits rose 10% to £1.6m and earnings (EBITDA) grew 12% to £1.7m. Also during the period the company entered the Chinese collectables market and secured new orders worth £1m from collectors there, to be realised in the current period.

Included in the sales for the first half were £0.4m from the sale of one of the rarest British stamps - the '6d IR official'.

Earnings per share were up 10% at 5.58p (H109: 5.09p), and the company has decided to increase its interim dividend by 13% to 2.25p per share. After a £1.3m investment in stock, the company closed the period with cash, generated from operating activities, of £0.8m (H109: £1.4m).

Stanley Gibbons completed the refurbishment of its flagship retail premises on the Strand, in London, and it took a prominent position in May’s 2010 London Stamp Exhibition. Also, the company made its first steps inro the Chinese stamp market, it continued to make progress with its new website development, and its Jersey-based investment business has been trading ahead of expectations.

Shares in the group climbed just over 4% following the strong interim results.

“I am satisfied with the progress being made by the management team on the execution of the core aspects of our strategy ... Current growth is being assisted by the positive forces now operating within our market at this time,” chairman Martin Bralsford commented.
 
“We continue to see an increasing number of new high net worth collectors at the same time as an increasing number of investors looking to place an element of their wealth in a tangible asset with a value embedded in history.”

Stanley Gibbons highlighted that the stamp market remains strong, and the ‘GB30 Rarities index’ has shown 7% growth in the year to date, “backed up by higher levels of trade to collectors through philatelic dealing and auctions”.

The company noted that its has invested a considerable amount of senior executive time, and its overheads increased by £0.5m, to support the development of the group's longer term strategy - particularly with the new websites and the database project - which makes the company's strong financial performance “even more creditable”.

Stanley Gibbons has now outsourced the development of the websites - Stanley Gibbons and Frasers - and databases, and the company expects the re-launch by the end of 2010. Furthermore, the new internet features will be followed by the launch of the company’s new online trading community in early 2011. 

In terms of its outlook, Stanley Gibbons said that its newly refurbish premises provide it with a solid foundation to benefit from the continued growth in the market of collectibles and the heightened interest in alternative investments

Additionally the company’s expansion projects are expected to boost growth further. Stanley Gibbons expects to gain material growth from its investment office in Jersey, which added £0.5m in revenues in H1. The management team are also planning a second visit to China next month, to develop opportunities “on a number of fronts to exploit the size and strength of the market”.

The company also plans to acquire a number of large stamp collections, which will “provide the scale and quality of stockholding” to satisfy demand for the rest of the year. Moreover, the company said it “remains focused on securing elusive ‘once in a generation’ opportunities to acquire the finest and rarest stamps and historical signatures as sought by our key clients”.