Stanley Gibbons gets stamped after profit warning

Philately has been getting Stanley Gibbons nowhere lately, with the stamp and coin collecting group issuing a profit warning and announcing an emergency fundraising.

For the current year to end-March, the AIM-listed company said it expected to make a £1-£2m loss before tax, due to sales of rare collectibles had suffered of late and savings had not been as easy to extract from its recent acquisitions.

Having ruled out a share issue last month as its market valuation was lower than its net asset value, the 160-year old company completed a U-turn on Tuesday as it has decided a £10m fundraising is the best option.

Although £6m of the raised cash will immediately go to pay off an overdraft, part of Gibbons' £22.6m total debts, with the remainder to be used to restructure the group, speed the integration of the Noble Investments and Mallett acquisitions and to provide extra working capital.

Management, to which ex Evolutions Securities director Clive Whiley will be added, have already begun to shave £5m of annualised costs from the business and have appointed new accountants in BDO, following the resignation of Smith & Williamson, and added specialist small cap broker and AIM nominated adviser FinnCap.

"The board believes that with the benefit of additional capital, the actions referred to above and a renewed focus on the core business, the group will be able to deliver an improved and more sustainable performance in the future," Gibbons said in a statement.

The news did not receive the stamp of approval from investors, with shares in the company sent 36% lower to 41.1p by mid afternoon on Tuesday.