Stanley Gibbons warns on profits as £1m coin sale collapses

A £1m coin was at the centre of a "perfect storm" of failed deals that forced Stanley Gibbons, the UK stamps, rare coins and collectibles trader, to issue a profit warning on Thursday, sending shares down more than 10 per cent.

The group, which has its roots as a specialist stamp dealer but has ambitions to be the "Amazon of collectibles", said it failed to complete the sale of stamps and coins worth more than £1m before the year-end. The company expected that results in the year to March 31 "will be materially below current market expectations".

About 40 per cent of Stanley Gibbons's business is in the volatile dealing of high-value collectibles, but the company is planning to reduce that to just 10 per cent by 2017.

One sale fell through after an unnamed American coin collector failed to pay for a £1m coin, forcing the company to pull the deal, said Michael Hall, chief executive.

"It was like a perfect storm scenario; what can go wrong next? That is how it felt," he said. Shares had fallen 10.48 per cent to 238.14p by lunchtime trading in London.

The profit warning illustrated the need for the group "to move from our traditional dealing business and towards being an online marketplace and an auctioneer," Mr Hall said.

The group is also moving into wealth management, launching its investment fund in Hong Kong this year, which will start with £5m of cash to spend on high-value collectibles, as it tries to "build a more predictable business", Mr Hall added.

Charles Hall, analyst at the Peel Hunt, the company's house broker, downgraded his full-year profit estimates 33 per cent to £7.5m but said the company would be less exposed to the risk associated with high value deals in future "as the spread of business has broadened".

In October, the group acquired antique furniture seller Mallett, adding to its growing collection of businesses that include a US coin dealer Noble Investments and Murray Payne, a stamp dealer.

The company has delayed by two months the hard launch of its online marketplace, where independent traders sell their products and Stanley Gibbons takes an 8 per cent commission fee.

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