The venerable collectables dealership and parent company of Dreweatts & Bloomsbury Auctions, Mallett and AH Baldwin, revealed in its half-year results statement that its cost cutting measures were “starting to make an impact… suggesting better days ahead”.
It has made £10m of savings on annual operating costs and reduced its £24m debt pile, but reported a pre-tax loss of £6.2m for the half-year to the end of September, which is down from a £1.1m profit in the same period a year ago.
Revenue also fell to £20.2m in the period, down from £29.4m in the same period a year ago.
However chairman Harry Wilson, who joined the 161 year-old firm last May, said: “Following an exceptionally difficult year for the business… profits are likely to remain constrained…. The board is optimistic that trading is now beginning to reflect the giant strides made during a year of substantial transition.”
Wilson last year acknowledged the issues it had faced with the integration of Noble Investments – owner of AH Baldwin & Sons and Dreweatts & Bloomsbury – into the business after its £46m purchase in 2013 and its acquisition of Mallett for £8.6m in 2014.
These firms endured significant senior departures and Wilson admitted Baldwin’s “suffered from a number of senior executive departures… arising from external competitors taking advantage of the wider group position”.
Coins and medals specialist Baldwin’s half year sales halved to £2.63m and made a profit of £0.6m, down from £1.6m for the same period a year ago.
The interiors business, comprising dealer Mallett and auctioneer Dreweatts & Bloomsbury, reported sales down by nearly two thirds to £3.4m and it recorded a loss of £2.05m for the half year period. Auction commissions from Dreweatts in the six months to the end of September were £2.4m, in line with those of the previous year. Significantly lower retail sales from Malletts accounted for the reduction in sales.
However Wilson said the “rationalisation and integration” of Noble and Mallett were nearly completed and there were “increasingly positive signs of stabilisation” at Mallett and Dreweatts and that November revenues were ahead of budget.
The stamps division made a £0.4m loss in the period and sales fell 20% to £3.2m.
Stanley Gibbons’ debts reduced from £24m in March 2016 to £16.5m for the six months to the end of September.
Wilson added: “Those divisions which were restructured first are already showing signs of recovery, which hopefully points to better days ahead.”
Shares rose 5% yesterday after the results statement. However the shares have fallen 95% in two years.