The Stanley Gibbons Group
Investors Presentation
March 2012
1
Contents
Pages
3
4
5
1.
2.
3.
4.
Who we are
The Vision
The Market
The Strategy
a) Internet
b) Auction
c) Investment
d) Dealing
5. Investing in collectibles
6. Management team
7. Summary – key strengths
Appendix I
Appendix II
Appendix III
Appendix IV
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7
8
9
10
11
12
Financial history
The Board
Major shareholders
Contact Details
13-14
15-18
19
20
2
Who we are
•
Most well known and respected brand name in the stamp market
•
155 year trading history and experience – holder of Royal Warrant since 1914
•
Retained competitive advantage through an offering based on expertise, integrity
and long term value to both collectors and investors
•
Our head office is in Jersey, Channel Islands. Other trading offices include 399
Strand London, Hampshire, Folkestone, Guernsey, and Hong Kong
•
Fraser’s autographs – biggest autograph dealer in Europe
•
Benham Group – largest dealer of first day covers in the UK
•
Dealer in rare coins and military medals
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The Vision
•
Our mission is to become the largest collectibles auction house and online trading portal in the world (by
means of reference, the current largest collectibles business in the US reports annual turnover of $800m)
•
The Stanley Gibbons brand has global recognition but low market penetration overseas. Our online strategy
will enable us to gain significant market share in all key trading areas of the World
•
The Stanley Gibbons brand has recognition and integrity enabling the brand to extend into other areas of the
collectibles market – we intend to develop expertise in all key areas of the collectibles market
•
Stanley Gibbons currently possesses less than a 1% share of the global stamp market yet is the most well
known brand in that market – we believe we could realistically hold a 10% market share within 10 years
•
In simple terms, we intend to increase our return from our primary asset – the brand – to create a much
larger business
•
There will be a need to invest in our systems and internal expertise to achieve these goals both through a
combination of internal investment and acquisitions
4
The Market
•
Stamp market estimated to be worth £6 billion* per annum. Autograph and
memorabilia market estimated worth of £3 billion* per annum.
•
Estimated 60 million stamp collectors in the world (20 million of those in China
alone)
•
Key market dynamics:
– Ageing population – baby boomer generation
– Emerging markets – Brazil, Russia, India and China
– New breed of ultra high net worth collectors
– Investment demand for tangible assets offering wealth protection
– Recession impact on lower value end of business
•
Better informed market – trading online and direct at auction
* Source: Universal Postal Union Survey (UPU) stated stamp market worth $10 billion per annum. Reuters, May 2008 quoted memorabilia market worth $4 billion per annum.
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Internet Strategy
•
Need to acquire technical expertise and commercial knowledge to fully develop online
strategy
•
Key areas of profit growth:
– Increase in dealing as principal from improved website functionality, statistics
monitoring, e-mail campaigns and SEO
– 5% transactional commission fees from online trading community
– 5% authentication fees (2% payable to independent expert)
– Subscription fees for online pricing information and album management software (£50
annual subscription fee)
– Subscriptions to premium information, online magazine and philatelic reference archive
– Advertising
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Creation of mobile versions (ipad, iphone, android)
•
Creation of foreign language and currency versions of website to support international
expansion
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Auction Strategy
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Reviewing potential acquisitions and investment in growing internal expertise
•
SG branded joint venture auctions with “key players” in US and Far East building
international auction brand
•
Focus on improving networking activities to develop close relationships with
recognised top collectors
•
Capital investment in auction areas at 399 Strand and systems
•
Targeting investment client database of high net worth individuals to recruit new
auction buyers for premium material at SG auctions
•
Rebranding of SG Auctions in UK to differentiate from SG dealing
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Investment Strategy
•
Potential acquisition or joint venture to incorporate collectibles into an overall
tangible asset investment offering
•
Focus on delivering a professional service to investors and educating those
investors to enable them to make informed decisions regarding the diversification
of an element of their investments into collectibles
•
Launch of rare stamp investment fund based on acquisition of top collections at
discount to market value, targeted at “sophisticated” investors only
•
Continue to roll out “investment office” model in other key overseas locations
including, for example, Singapore, Switzerland and Dubai
•
Diversification of product offering into other stamp countries (eg. US, Brazil) and
other collectibles including rare coins, military medals, banknotes, first edition
books, antique watches etc.
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Dealing Strategy
•
“Dealing” comprises our traditional business activities acting as principal including retail,
mail order and publishing
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Improved presentation of brand and development of same marketing principles already
proven in our investment business
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Providing a personal service to high net worth collectors to assist them in building top quality
collections, which will increase in value over time
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Rationalisation of non core activities showing declining profitability and/or low return on
capital
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Acquisitions only where deal price can be struck at substantial discount to fair value and
business offers diversification to provide predictable and reliable income and profit streams
•
Reduction of stock levels in areas of business where return on capital low
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Investing in collectibles
•
Rare stamps have delivered average
annual compound returns of over 10% per
annum over past 50 years
•
Collectibles market not correlated with
traditional asset classes – GB30 Rarities
Index showed growth of 39% in 2008
•
Collectibles have performed best
historically in times of high inflation –
between 1975 to 1980, rare GB stamps
increased by over 600%
•
Means of diversification into a tangible
asset with a value embedded in history
•
Internationally traded commodity
providing protection against exchange rate
risks
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Management Team
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Main Board currently comprises 4 executive directors and 3 independent nonexecutive directors, including an independent non-executive Chairman, providing
shareholders with appropriate corporate governance (see Appendix II)
•
Executive committee members comprise:
– Mike Hall, Chief Executive
– Donal Duff, Chief Operating Officer & Finance Director
– John Byfield, Corporate Development Director
– Keith Heddle, Sales & Marketing Director
– Richard Purkis, Corporate Services Director
– Tony Grodecki, Business Development Director
– Richard Watkins, Managing Director, London
•
Management team with the breadth of skills and experience together with the
determination to drive and implement the strategy successfully
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Summary – key strengths
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The BRAND name – recognised as one of the most respected brands in the world
that has stood the test of time
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Expertise – the philatelic community relies on our expertise, particularly in stamp
listings and pricing information
•
No major competitors in market – fragmented marketplace in need of consolidation
and a huge market share to play for
•
The value held within our intellectual property and website cannot be replicated
•
The market for rare collectibles remains strong and has recently weathered one of
the fiercest financial storms in history
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Appendix I – Financial history
40.0
35.0
30.0
25.0
20.0
£m illion
Sales
15.0
Prof it bef ore tax (adjusted)
10.0
5.0
0.0
-5.0
2000
2001
2002
2003
2004
2005
2006
Financial Ye ar
13
2007
2008
2009
2010
2011
Appendix I – Financial history
20.0
15.0
10.0
Pe nce
Earnings per share
Dividend per share
5.0
0.0
-5.0
2000
2001
2002
2003
2004
2005
2006
Financial Ye ar
14
2007
2008
2009
2010
2011
Appendix II – The Board
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David Martin Bralsford MSc, FCA, FCT, Non-Executive Chairman
Date of Birth: 1 January 1948, date of appointment as Director: 1 November 2007
Martin qualified as a Chartered Accountant in 1970, before obtaining a Masters degree in Economics at the London Business
School in 1974.
He is Chairman of Channel Islands based wealth management business, Collins Stewart (CI) Ltd. He was formerly Chief
Executive of C.I. Traders Ltd, a conglomerate being the largest corporate employer in the Channel Islands, which was AIM
quoted prior to its take-over by a private equity consortium in July 2007.
Martin has also served as President of the Jersey Chamber of Commerce and as Chairman of the Training and Employment
Partnership in Jersey. He is on the Board of a number of other listed or private companies. He chairs the Nomination
Committee.
•
Michael Robert Montague Hall BAcc CA, Chief Executive
Date of birth: 9 August 1970, date of appointment as Director: 7 August 2000
In 1995 Michael qualified as a Chartered Accountant in Scotland and joined Coopers and Lybrand (now
PricewaterhouseCoopers) in Jersey. As a manager, Michael worked on both audit and corporate finance assignments for a
variety of listed companies including Flying Flowers. Michael joined Flying Flowers as financial controller of the
Collectibles division in July 1999. He was appointed Finance Director of Stanley Gibbons in August 2000 and Chief
Executive of The Stanley Gibbons Group plc from 1 July 2003. He is a member of the Nomination Committee.
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Appendix II – The Board
•
Donal Peter James Duff, BAAF, FCA, AMCT, Chief Operating Officer and Finance Director
Date of Birth: 11 November 1967, date of appointment as Director: 7 August 2009
Donal qualified as a Chartered Accountant with Coopers & Lybrand in Ireland in 1991 and subsequently transferred to its
Jersey office in 1993 to work on a wide range of audit and corporate finance assignments. In 1996, he joined Le Riche Group
Limited, a listed company, as Group Financial Controller and was Director of Finance when it was acquired by C.I. Traders
Limited, an AIM listed company, in 2002. Donal was Director of Finance and Company Secretary of this company, the
largest private sector employer in the Channel Islands, until its acquisition by a private equity consortium in 2007 and he
continued to work with the new owners until 2008.
Donal was appointed Chief Operating Officer of The Stanley Gibbons Group plc on 17 March 2009 and Finance Director on
4 November 2011. He is also a Non-Executive Director of Jersey Post International Limited.
•
John Byfield, Corporate Development Director
Date of Birth: 7 November 1951, date of appointment as Director: 28 April 2010
John Byfield qualified as a Solicitor in 1978 and was senior partner of a substantial law practice for some 20 years. During
that time he specialised in company and commercial law and advised many boards of both private and public companies.
John acted as executive Chairman of Essentially Group, formerly AIM listed, from 2002 until the company was sold in
October 2009. Jersey resident, he holds a variety of directorships including one with a Jersey Financial Services Commission
regulated trust company. On 1 February 2012 he became an Executive Director in a new role as Corporate Development
Director.
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Appendix II – The Board
•
Richard Kenneth Purkis, Corporate Services Director
Date of birth: 16 May 1955, date of appointment as Director: 1 January 2003
Richard first joined Stanley Gibbons Limited in 1977. He was appointed a Director of Stanley Gibbons Limited, the main
trading subsidiary in October 1996 and became Company Secretary of Stanley Gibbons in May 1999. He was appointed
Operations Director of The Stanley Gibbons Group Limited with effect from 1 January 2003 and appointed Corporate
Services Director on 17 March 2009.
•
Robert Henry Henkhuzens BA, FCA, Non-Executive Director
Date of Birth: 21 February 1952, date of appointment as Director: 3 March 2006
Bob Henkhuzens was a partner with Coopers & Lybrand (‘C&L’) in Jersey for ten years. There he headed the commercial
sector department providing audit, tax and accounting services to both local and international businesses. During this time he
was also responsible for the firm’s corporate finance and management consulting services. Since leaving C&L in 1998, Bob
has worked as an independent consultant and advisor and is a director of various private companies. He is a former president
of the Jersey Chamber of Commerce and vice-president of the Jersey Society of Chartered and Certified Accountants and
remains a committee member of both.
He is Chairman of the Audit Committee and a member of the Remuneration and Nomination Committees. He served as
Interim Chairman of the Company from 3 August 2007 to 1 November 2007.
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Appendix II – The Board
•
General Sir Michael Wilkes KCB, CBE, Non-Executive Director
Date of birth: 11 June 1940, date of appointment as Director: 15 January 2008
Sir Michael Wilkes served in the British Army for 35 years, reaching the rank of Full General and has seen active service in
Special Forces across the world. On leaving the Army in 1995 he was appointed Lieutenant Governor and Commander in
Chief of Jersey, where he served until retiring in 2000. Sir Michael was appointed a Non-Executive Director of Le Riche
Group Ltd in 2001 and subsequently Chairman. After overseeing its merger he became Deputy Chairman of C.I. Traders Ltd,
the largest employer in the Channel Islands, until its recent take-over. Sir Michael holds other non-executive directorships
across a range of activities and his outside interests include acting as a Trustee of the Nuffield Trust for the Services. He is
Chairman of the Remuneration Committee and a member of the Audit Committee.
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Appendix III – Major shareholders
2011
2010
Black Rock Inc.
14.19%
11.56%
Barclays plc
5.14%
5.14%
Artemis Investment Management Limited
3.97%
9.93%
Montanaro Group
-
3.71%
Ignis Investment Services Limited
-
3.09%
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Appendix IV - Contact details
•
The Stanley Gibbons Group plc,
Registered Office
•
Martin Bralsford, Chairman
Mike Hall, Chief Executive
Donal Duff, Chief Operating Officer &
Finance Director
18 Hill Street
St. Helier, Jersey, JE2 4UA
Tel: 01534 766711
Email: dduff@stanleygibbons.com
Stanley Gibbons Limited
Richard Purkis, Corporate Services
Director
399 Strand
London, WC2R 0LX
Tel: 020 78368444
Email: rpurkis@stanleygibbons.com
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“…stamps’ day as an alternative asset class has come – and longterm returns can be first class.”
David Stevenson, Financial Times 28 May 2010
Questions?
Contact Details:
Mike Hall, Chief Executive
Tel: +44 (0)1534 766711
Mobile: +44 (0)7797918399
Email: mhall@stanleygibbons.com
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