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Stanley Gibbons Group: Financial & Operating Highlights and Strategic Focus

This presentation highlights the financial and operating highlights of The Stanley Gibbons Group. It covers the performance of various segments such as Philatelic, Publishing, and Other Collectibles. The presentation also discusses the company's internet strategy and outlook.

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Stanley Gibbons Group: Financial & Operating Highlights and Strategic Focus

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  1. The Stanley Gibbons Group Final Results Investors Presentation 22 March 2013 1

  2. Contents Pages 1. Financial Highlights 3-5 • Operating Highlights 6 • Philatelic 7 • Publishing 8 • Other Collectibles 9 • Internet 10 • Internet Strategy 11-12 • Outlook & Strategic Focus 13 • The Board 14 • Management Team 15 Appendix I Income Statement 17 Appendix II Balance Sheet 18 Appendix III Cashflows 19-20 Appendix IV Contact Details 21 2

  3. Financial Highlights 3

  4. Financial Highlights • Sales broadly in line with prior year reflecting a shift in sales mix to higher margin business • Internet sales from core website, www.stanleygibbons.com, were up 55% in the year (2011: up 27%) • Now more than 50% of revenues generated from overseas (25% in 2009) • Gross margin% up from 38.7% to 43.7% reflecting buying opportunities of major collections taken in the year at substantial discounts to market value • Adjusted earnings per share up 10% to 21.44p • Proposed final dividend of 3.75p (2011: 3.50p), giving a total dividend for the year of 6.5p (2011: 6.0p), up 8% 4

  5. Financial Highlights • Cash funds at 31 December 2012 of £6.8m (2011: £3.2m) reflecting the net proceeds of £5.8m from the placing and fundraising in November 2012 • Stock levels at 31 December 2012 stated at historic cost of £20.7m (2011: £16.8m) providing asset base to deliver future organic growth from core trading activities 5

  6. Operating Review 6

  7. Philatelic • 19% profit growth achieved through increase in gross margin and lower marketing spend with focus on nurturing existing client relationships • Sale of largest block of mint penny blacks in existence for £1m • Hong Kong office contributed sales of £2.6m and profits of £0.7m • Prevailing strong demand for Chinese rare stamps with sales up 83% to £2.1m • Auction commissions were up 60% benefiting from the strong realisation of the sale of the prestigious “Arnhold Collection”, achieving £1.6m 7

  8. Publishing • 16% profit growth following completion of restructuring and rationalisation exercise last year • Stronger publishing schedule and negotiation of lower print costs on key catalogue titles • Sales of catalogues, albums and accessories up 17% with online sales up 76% • Decline in sales of our printed monthly magazines and associated advertising revenues, as expected • Online subscription services and mobile application download revenues expected to compensate for decline in printed publication sales in the future 8

  9. Other Collectibles • 34% profit growth from increased sales of rare coins and Benham first day covers • Profits from The Benham Group up 26% to £0.7m, benefiting from sales of commemorative collectibles related to the London 2012 Olympics and the Queen’s Diamond Jubilee, including £0.6m sales into Chinese market • Sales of rare coins and military medals were up 31% to £1m, with profit contribution of £0.2m, up 80% • Autograph division profits up by 18%, including sale of Edward IV manuscript for £0.14m 9

  10. Internet • Development costs incurred in year of £0.4m (2011: £0.2m) representing investment in future online opportunities • Acquisition of bidStart, a US-based online collectibles trading platform for a consideration of $1m in November 2012 • Successful placing and fundraising of £6m providing finance to accelerate and enhance the development of the global online collectibles trading platform • Total member numbers on bidStart showed a 44% increase in the 90 days since acquisition • Significant advances made in building appropriate quality of team necessary to deliver online strategy 10

  11. Internet: Where we are now • BidStart • 71K Active Sellers • 6.9M Listings (including 3.5M stamps) • $2.5M GMV • $300K Revenue • Stanley Gibbons • Simple web operation with complex systems 11

  12. Internet: 2013 Goals & Milestones • BidStart • Recruit team – Q2/Q3 • Invest in operations – Q2/Q3 • Drive seller and listing growth – Q3/Q4 • Accelerate GMV growth with marketing – now • Stanley Gibbons • Rationalise existing sites and systems – Q2 • Continued evaluation and development of team – now • Migrate to open source platforms – Q2/Q3 12

  13. Outlook & Strategic Focus • Consolidation of collectibles market through a combination of developing key services online and by appropriate acquisition of top quality businesses in rare stamps and other areas of collectibles to strengthen expertise • Online strategy is supported by international expansion programme and planned development and growth of auction services • Macro-economic factors in favour of tangible assets providing expectation of future appreciation of collectibles as an asset class and corresponding increased interest globally for collectibles as a diversification tool within a well balanced investment strategy • Discussions ongoing with potential business partners in the US and other key overseas markets in respect of the planned growth of our auction services internationally • Profits in 2013 will be affected by the intended increased investment in our online strategy. It is expected that the costs of this investment will be more than compensated by growth opportunities in other parts of the business. 13

  14. The Board • John Byfield, appointed as Corporate Development Director in February 2012 (previously a non-executive director since April 2010) • Bob Henkhuzens (non executive and Chairman of audit committee), retired on completion of term at AGM in May 2012 • Martin Magee appointed in his place as non-executive and Chairman of the audit committee in August 2012 • Richard Purkis, Corporate Services Director and Company Secretary stepped down from his role as a Director of the Group on 31 January 2013 and is working a 12 month notice period ensuring a smooth handover of his duties • The Board now consists of three executive directors and three independent non-executive directors, representing a Board composition in accordance with accepted best corporate governance practice 14

  15. Management Team • High level appointments to internet team to support and accelerate implementation of online strategy included: • Mark Rosenberg as Chief Digital Officer in November 2012, founder and former owner of bidStart based in the US • Paul Zimmerman as Director of E-Commerce Operations in February 2013, formerly of Amazon.com, Firebox.com and Play.com, based in Jersey, CI • Restructuring and rationalisation of IT and internet team based in Ringwood, Hampshire completed in February 2013 • Promotion of Anthony Gee (formally Group Financial Controller) to Director of UK Operations in March 2013 • Currently recruiting new Group Financial Controller to be based in Jersey, CI • Promotion of Tony Grodecki (formally Managing Director of The Benham Group) to the position of Group Commercial Director 15

  16. Appendices Pages Appendix I Income Statement 17 Appendix II Balance Sheet 18 Appendix III Cashflows 19-20 Appendix IV Contact Details 21 16

  17. Appendix I - Income Statement 17

  18. Appendix II – Balance Sheet 18

  19. Appendix III - Cashflows 19

  20. Appendix III - Cashflows 20

  21. 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: mhall@stanleygibbons.com Email: dduff@stanleygibbons.com Stanley Gibbons Limited Richard Purkis, Company Secretary 399 StrandLondon, WC2R 0LXTel: 020 78368444 Email: rpurkis@stanleygibbons.com Appendix IV - Contact details 21

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