Shares in Stanley Gibbons (SGI) plummeted after the company reported a 28 per cent decline in revenues and widening pre-tax losses. A 48 per cent fall in net assets to £18m in the year to 31 March followed difficult trading, one-off costs from the group’s restructuring and guaranteed buybacks for some older investment contracts. With net assets below £20m, and a qualified audit report, the troubled stamp and coin company is now in default – it is dependent on the bank maintaining support.
At the year-end, its bank loan was £8.3m, to be amortised at £0.5m per quarter from December 2017 until the repayment date in May 2018. A £10m revolving credit facility with the Royal Bank of Scotland is due for repayment at the same time.
Management is discussing short-term liquidity needs with the bank. Alternatively, the group said other sources of finance might be available to them, via further asset disposals or from an alternative finance provider. Despite its dire financial position, executive chairman Harry Wilson, asserts "there is a market there for what we do".
There were small signs of progress. The restructuring programme reduced annualised operating costs by over £10m to £53m. Meanwhile, the group announced this week that it had sold Dreweatts 1759, part of its interiors auction business, to Gurr Johns for £1.25m in cash, with a further £0.4m due over the next two years. In addition, its total debt fell to £16.5m from £21.9m a year earlier.
Stanley Gibbons launched a formal sales process in June, and private equity company Disruptive expressed an interest. However, no further updates have yet been announced.
