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Stanley Gibbons SGI – Management Denies Responsibility

sglogoStanley Gibbons was a stamp collector, he knew about stamps, he knew the value of stamps and he led the company he founded,  to become the worlds largest stamp dealer. For decades postage stamps outshone stocks and shares for capital growth and made many a collector, wealthy men.

Then eventually the company took on management. 10 years ago the shares were worth 98p. Yesterday they were worth 99p, a rise of 1p over 10 years and having fallen 10p on the day of disastrous interim results which included the cancellation of the interim dividend.

The reason for the company’s problems is that the board decided to abandon philately as their sole business and expertise and change to a broader based collectibles group with significant on-line distribution potential. Senior management was supposed to manage the transition but it didn’t.  The Board was supposed to supervise Senior Management but it didn’t

Only since early September, two months ago, has Senior Management  been focused on putting in place the right organisation, structure and team to execute strategy in accordance with the Board’s expectations.’

 Why was it not in place previously.  How is it that management was unaware before September that the transition had apparantly become become a shambles.

Were the Directors asleep during the summer whilst business collapsed around their ears.What supervision did they exercise over senior management before September. What did they do to earn their directors remuneration.

Even now they have decided that only the shareholders will suffer with the interim dividend being abolished. Not a single apology, not a single resignation from the board, not a single sacking of those responsible. Even now there is an absolute refusal to accept responsibility. The Chairman tries to justify himself and the whole of the senior management team by claiming that “only in retrospect” could it be seen that their expectations were premature and over optimistic. Were they all blind ?

And the results ?

Like for like sales down 21%; Profit before tax down to a meagre £0.4m. from last years £3.7m. Earnings per share down some twelvefold from 7.02p 0.57p. Net debt up over 500% from £3.3m. to £17m.

Let it be hoped that eventually the shareholders demand answers and get them.

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