Stanley Gibbons – interims

Stamps dealer and auctioneers Stanley Gibbons released their interims today (http://is.gd/KkdJoW), sending the shares down nearly 10% to 98.2p.

Sales were flat, but alarmingly, “Like-for-like sales, excluding Mallett acquisition, were £21.6m, down 21% on the prior period”. Trading profits were £0.5m (2014: £6.1m), but that figure excludes “investment on internet development, exceptional operating charges, pension service and share option charges and amortisation of customer lists”.

Mallett made a loss. The interim dividend has been scrapped.

I wrote about SGI in October (http://is.gd/yirzq1), and Paul Scott has commented about SGI today (http://is.gd/4chKnl). He has sold his holdings.

In its Outlook section, SGI said “The Group continues to implement its strategy to evolve and diversify its activities, including an effective online and auction business model with more predictable revenue streams and profits.”

Reading between the lines, it seems that SGI doesn’t like the stamp business. Hence its diversification into Mallett and Noble. However, Mallett is making a loss. So it does not seem to be a particularly good quality business.

SGI is floundering, and I doubt that the full year is going to make for pleasant reading. It has a Piotroski score of 2 and a return on capital of 3.6%. Poor. Although its value score is 87, is quality is 33 and momentum is 13, with a Stockopedia stock rank of 38.

I don’t see anything to be excited about here.