Stanley Gibbons books half year loss as shares tumble
The company posted a £3.5 million trading loss in the six months to September 30, down from £3.9 million in the same period last year.
Shares in Stanley Gibbons collapsed on Friday after the group revealed half-year losses and said it could raise further equity and sell more assets to bolster its precarious financial situation.
The troubled stamp and coin specialist posted a £3.5 million trading loss in the six months to September 30, down from £3.9 million in the same period last year.
On a pre-tax basis, losses narrowed from £6.4 million to £3.1 million.
Revenue fell 4% to £16.6 million as Stanley Gibbons bemoaned “another difficult year” for the group.
Shares tumbled over 30% to 3.8p following the trading update.
The firm has been stung by a slowdown in the stamps and collectables market and hampered by a string of failed historic acquisitions.
It is now trying to dump non-core assets and slash costs in an effort to raise cash.
To this end, the company said it has exceeded its original target of achieving £10 million of annual cost reductions, with monthly employment costs falling by 75%, while banking over £6 million from asset sales.
Stanley Gibbons confirmed in October that it was in default on its loans and is “dependent on the bank’s ongoing support”.
On Friday the firm said that it will need to refinance its debt before May and requires a £5 million cash injection to fund growth and to “normalise” working capital requirements.
Chairman Harry Wilson added: “Whilst discussions with the bank remain constructive there is a risk that the quantum of debt which needs to be refinanced, together with the investment and working capital requirement cannot be obtained within the current capital structure.
“The board will consider raising further equity or asset sales, however the board is of the view that whilst alternative finance will be available it is likely to require restructuring of the current indebtedness as part of the solution.”
He said that the board has received offers of finance from existing and new investors, including an offer of equity conditional on the restructuring of the existing debt.
Earlier this year, Stanley Gibbons put itself up for sale as part of a review being led by finnCap, with private equity firm Disruptive Capital thought to be interested.