10 August 2012 – interim results
Group turnover for the six months ended 30 June 2012 was £14.69m (2011: £14.93m). Profit before tax was £1.79m versus £1.65m. Earnings per share were 6.53p (2011: 5.88p), an increase of 11%. The gross margin percentage for the six months ended 30 June 2012 was 44.5% compared to 37.9% in the same period last year. Gross margins benefited from a change in sales mix in the period. This included a 17% reduction in sales made of investment products in collectibles, which attract lower margins but increased sales to high net worth collectors and generally in most other areas of the business. Exceptional opportunities were also said to have arisen in the period, to acquire top quality stamp collections and key philatelic rarities. The subsequent sales made to date from those acquisitions attracted higher margins.
It is slightly worrying that overheads were £0.7m (19%) higher than the prior period. The company has increased its cost base and although it is well on track to meet forecasts for 2012, this increases the downside in future years. We believe that 2013 could prove to be a tougher year, especially given that the current year will benefit from the Jubilee and Olympics. The shares have had an excellent run since our tip and now looks an opportune time to TAKE PROFITS.