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Noble Investments (UK) PLC

Interim results for the six months ending 28 February 2009

Noble Investments (UK) PLC ('Noble' or 'the group'), the AIM listed coin and stamp dealer, is pleased to announce its interim results for the six months ending 28 February 2009.  

Financial highlights:

-	Revenue up 38% to £6,348,000 (2008:£4,610,000)
-	Operating profit up 30% to £866,000 (2008:£667,000)
-	Adjusted* profit before tax up 26% to £1,032,000 (2008: £817,000)
-	Interim dividend up 18% to 1p per share (2008: 0.85p per share)
-	Basic earnings per share up 24% to 4.35p(2008:3.51p)
-	Diluted adjusted* earnings per share up 38% to 4.52p (2008: 3.28p)
-	Strong ungeared balance sheet of £13.07m despite buy back of 10% of equity for £1m  (2008: £12.92m)

* Adjusted for amortisation, change in the market value of available for sale financial assets and share option charges.

Operational highlights:

-	Very buoyant retail operations, aided by high quality rarities in great demand.
-	Strong AH Baldwin coin auctions, London in September 2008, a $6.25m New York auction in January 2009 and a London Islamic and Indian coin auction in February 2009.
-	Apex Philatelics held two postal and one public auction during the period generating strong demand.

Commenting on the interim results, Ian Goldbart, Managing Director said:

'Despite the global turmoil of the financial markets, Noble has delivered another solid set of interim results and has continued to expand and diversify its business. Both our auction business and retail side have performed extremely well and, although only two months into the second half, we have started this period with philatelic auctions in March and April and a very successful numismatic and banknote auction in Hong Kong. 

'We are delighted to propose an 18% increase in the interim dividend to 1p and remain excited and confident about our prospects for the year as a whole.' 

Enquiries:

 

Ian Goldbart

Noble Investments (UK) PLC

+44(0)207 930 6879

 

Adrian Hadden/ Stewart Wallace/ Lorraine Delannoy

Collins Stewart Europe Limited

+44(0)20 7523 8350

 

 

David Haggie/Alexandra Parry 

Haggie Financial 

+44(0)20 7417 8989 

 

 For further information: 

 

www.nobleinvestmentsplc.com www.baldwin.sh

Managing Director's statement:

Introduction 

We continue to build on the solid foundations we have established over the past five years and we have maintained a strong ungeared balance sheet, kept our heads down and worked extremely hard to expand the business whilst trying to improve net asset value. The acquisition of Apex in late August last year added another source of revenue to the activities of the Group with three additional auctions during this period and a further four due in the second half.

Financial overview

The results for the first half show a 38% increase in revenue to £6.35m from £4.61m. Operating profit adjusted for amortisation, change in the market value of available for sale financial assets and share option charges, increased 43% to £981,000. (2008: £685,000)

It is particularly gratifying to be able to report that the increase in revenue is not only due to the acquisition of Apex but also the relative strength of the existing retail and auction divisions. During the period, the Group incurred £22,000 in amortisation of goodwill and depreciation mainly due to the Apex acquisition.

Basic earnings per share rose 24% to 4.35p (2008:3.51p) whilst fully diluted adjusted earnings per share rose 38% to 4.52p (2008: 3.28p).

We continue to selectively make significant investments in inventories and will continue to do so as long as market appetite dictates. The recent global turmoil has brought continued strong demand for top quality rarities and being able to source and acquire these is an important strength of the Group.

 

Operational overview

Retail division

The retail division has achieved growth through fixed price lists, the website and shop sales. The period under review also included our participation in coin fairs in London, York, Harrogate, Munich, Berlin, Paris, and New York together with our attendance at numerous auctions worldwide. As I have mentioned in past statements, although our business is extremely small when compared to multi-national organisations, it is a truly global one and whilst the weakness in sterling may sometimes hinder buying, it certainly helps overseas sales.  

Auction division

The auction division continues its progress from last year with the production of auction catalogues containing coin, stamp, banknote, commemorative medals and military decorations now running at approximately 27 per annum. The division continues to work at optimum capacity with auctions in London, New York and Hong Kong. The ability to offer different international venues for clients' consignments is seen as important, as some material sells better in different venues. In November 2008 the auction department produced a detailed catalogue containing 4 excessively rare Russian coins, once the property of Grand Duke Georgii Mikhailovich. These four coins sold for £2.1m including buyer's premium, with the Elizabeth 1755 20 Rouble realising £1.78m, a world record price for a non US coin.

Apex Philatelics

The acquisition of Apex Philatelics Ltd for £1.34m occurred just 11 days before our year end of 31 August 2008. The Apex team have coped well with the additional work involved in integrating their business with Noble's, whilst continuing to offer a very professional and personal service to their significant database of client. This could not have been achieved without the dedication of the respective teams of both Apex and Noble. We look forward to helping grow the business under the Noble umbrella and to this end we have given Apex additional working capital to aid this expansion.

Website

We continue to work on both our Baldwin's website and that of Apex. We see this as an important window for our inventory of both companies to our global list of existing clients and an invitation to new clients. It is envisaged that during the current period, further changes to the website will occur. Baldwin's now have over 2,200 coins and books on offer on our website. The Baldwin's website received an average number of 2,880 unique visits per month during the period, up from 2,400 per month and had approximately 3.16m hits during the period against 3.1m in the corresponding period. 

Freehold property

The freehold property has over the last six months continued to be adapted to enable members of the Apex team to operate from within Adelphi Terrace as well as at the Apex office in Lingfield. The ability to offer viewing for stamp auctions in London is also an important step in the development of Apex. We consider the money invested in the building to be well spent and the freehold of significant importance to the Group.

Employees

A business is only as strong as the team that make it work. A H Baldwin & Sons Ltd was founded in 1872 and it is down to the team's tireless devotion to those original high standards and principles that the business continues to thrive in a world that is very different from that when it was founded.  

The dedication of our relatively small number of staff and directors is to be commended and I would like to thank them for their continued professionalism and integrity.

Strategy

The strategy of the Group over the past five years has not changed. The Group has taken an individual or team of highly professional specialists with reputations for honesty and integrity and given them the infrastructure and capital resources to thrive. We will continue to do this whilst exploring opportunities to diversify product range. 

Dividend

Due to our improved results and in view of the strong balance sheet and substantial dividend cover, the Board has approved a 18% increase in the interim dividend to 1p and believe currently that a progressive dividend policy is not only acceptable in this economic environment but also desirable.

The dividend will be paid on 18 June to shareholders on the register on 22 May 2009.

Share price

We are disappointed that shareholders have seen a significant reduction in the value of their shares during the period. This reduction has little bearing on the performance of Noble, whose business goes from strength to strength. We look forward to the stock market recovering and over time, value being reflected in Noble's share price. 

Prospects

Because of the economic uncertainty during this period, we believe our conservative approach has been appropriate and has clearly demonstrated the resilience and strength of the business. The combined databases of the Group now exceed 10,000 clients and this, together with our ability to offer a substantial and varied selection of coins, stamps, medals and banknotes to this client base, bodes well for the Group's future.  

The current economic uncertainty has probably benefited the Group and we do not take this uncertainly lightly. Although only two months in to the second half, we have started this period well with philatelic auctions in March and April and a very successful numismatic and banknote auction in Hong Kong also in April. We are about to enter May with another four auctions and I am therefore confident, whilst being mindful of macro matters, that our business can continue to expand. 

Ian Goldbart

Managing Director

30 April 2009

Consolidated Income Statement

for the half year ended 28 February 2009

	Note	Half Year to 28/2/09 Unaudited   £'000		Half Year to 29/2/08 Unaudited £'000		Year to 31/8/08 Audited £'000
Revenue		6,348		4,610		10,141
Cost of sales		(4,335)		(3,155)		(6,873)
Gross profit		2,013		1,455		3,268
Administrative expenses		(1,147)		(788)		(1584)
Operating profit before amortisation, change in the market value of available for sale financial assets and share option charges.		981		685		1,763
Amortisation		(22)		-		(1)
Change in the market value of available  for sale assets		(81)		-		(51)
Share option charges		(12)		(18)		(27)
Operating profit		866		667		1,684
Investment income		51		132		234
Profit on ordinary activities before taxation		917		799		1,918
Tax on profit on ordinary activities		(212)		(196)		(427)
Retained profit for the period		705		603		1,491
Earnings per share:		Pence		Pence		Pence
Basic earnings per share	3	4.35		3.51		8.65
Diluted earnings per share	3	4.29		3.36		8.32

 

All of the Group's operations are continuing.

The Group has no recognised income or expenses other than those included in the results above.

Consolidated Balance Sheet

as at 28 February 2009

		As at   28/2/09 Unaudited   £'000		As at  29/2/08 Unaudited £'000		As at 31/8/08 Audited £'000
Non-current assets
Goodwill		590		-		590
Other intangible assets		423		-		445
Property, plant and equipment		2,014		1,898		1,988
Available for sale financial assets		184		250		265
Deferred tax asset		174		176		155
		3,385		2,324		3,443
Current assets
Inventories		8,927		7,224		8,189
Trade and other receivables		2,151		2,010		2,173
Cash and cash equivalents		2,184		5,203		3,871
		13,262		14,437		14,233
Current liabilities
Trade and other payables		(2,028)		(2,637)		(2,188)
Deferred consideration		(100)		-		(217)
Current tax		(343)		(323)		(383)
		(2,471)		(2,960)		(2,788)
Net current assets		10,791		11,477		11,445
Non-current liabilities
Deferred consideration		(275)		-		(275)
Deferred tax		(834)		(885)		(894)
		(1,109)		(885)		(1,169)
Net assets		13,067		12,916		13,719
Capital and reserves
Called-up equity share capital		158		173		173
Share premium account		6,907		7,948		8,001
Capital redemption reserve		50		50		50
Retained earnings		5,952		4,745		5,495
Shareholders' equity		13,067		12,916		13,719

Consolidated statement of changes in shareholders' equity

for the half year ended 28 February 2009

	Half Year	Half Year	Year
	to 28/2/09	to 29/2/08	to 31/8/08
	£'000	£'000	£'000
Opening equity	13,719	12,408	12,408
Dividends paid	(260)	(215)	(362)
Net profit for the period attributable to equity shareholders	705	603	1,491
Issue of ordinary shares	32	102	176
Ordinary shares cancelled	(1,141)	-	(21)
Other reserves movement due to share options charge	12	18	27
Closing equity	13,067	12,916	13,719

Consolidated Cash Flow Statement

for the half year ended 28 February 2009

	Half Year to 28/2/09 £'000			Half Year to 29/2/08 £'000	Year to 31/8/08 £'000
	Note
Operating activities
Cash generated by operations	4		137	153	224
Income taxes paid			(321)	(91)	(419)
Net cash inflow/(outflow) from operating activities			(184)	62	(195)
Investing activities
Interest received			51	132	234
Purchases of property, plant and equipment			(68)	(158)	(277)
Purchase of available for sale financial assets			-	-	(66)
Deferred consideration paid			(117)	-	-
Acquisition of subsidiary undertaking  (net of cash acquired)			-	-	(798)
Net cash (used in)/generated by investing activities			(134)	(26)	(907)
Financing activities
Dividends paid			(260)	(215)	(362)
Repayment of bank loans			-	-	(25)
Proceeds from issue of shares (net of expenses)			32	102	101
Shares cancelled			(1,141)	-	(21)
Net cash used in financing activities			(1,369)	(113)	(307)
Net decrease in cash and cash equivalents			(1,687)	(77)	(1,409)
Cash and cash equivalents at start of period			3,871	5,280	5,280
Cash and cash equivalents at end of period			2,184	5,203	3,871

Notes to financial information

1. Basis of preparation

The interim financial report has been prepared in accordance with the AIM rules and the principal accounting policies and methods of valuation set out in the Group's Annual Report and Accounts for the year ended 31 August 2008.

The Group's interim results for the half year ended 28 February 2009 have been prepared in accordance with International Financial Reporting Standards (IFRS). The comparative figures are an abridged version of the Group's full financial statements and, together with other financial information contained in these interim results, do not constitute statutory financial statements of the Group within the meaning of section 240 of the Companies Act 1985.

Statutory financial statements for the year ended 31 August 2008 have been filed with the Registrar of Companies for England and Wales and have been reported on by the Group's auditors. The report of the auditors was not qualified and did not contain a statement under section 273(2) or (3) of the Companies Act 1985.

2.Revenue

All of the Group's revenue is derived from the Group's sole activity of trading in rare coins and other collectibles. 

3. Earnings per share

The calculation of earnings per share figures for the half year ended 28 February 2009 is based on the profit attributable to ordinary shareholders of £ 705,000 (2008 half year: £603,000; 2008 full year: £1,491,000) divided by the weighted average number of shares in issue of 16,197,131 (2008 half year :17,173,419; 2008 full year:17,230,404) 

	Half Year		Half Year		Year
	to 28/2/09		To 29/2/08		to 31/08/08
	£'000	Pence	£'000	Pence	£'000	Pence
Profit retained for the year	705	4.35	603	3.51	1,491	8.65
Amortisation	22	0.14	-	-	1	0.01
Change in the market value of available for sale financial assets	81	0.50	-	-	51	0.30
Share option charge	12	0.08	18	0.11	27	0.16
Adjustment to reflect tax charge of 28%	(77)	(0.48)	(33)	(0.19)	(132)	(0.77)
Adjusted earnings per share	743	4.59	588	3.43	1,438	8.35
Diluted adjusted earnings per share	743	4.52	588	3.28	1,438	8.02

At 28 February 2009, there were 982,202 (2008 half year: 1,047,615; 2008 full year: 1,119,817) share options in issue of which 253,347 (2008 half year 762,429; 2008 full year 689,780) were dilutive potential ordinary shares on average during the period.

4. Reconciliation of profit before taxation to net cash inflow from operating activities

	Half Year	Half Year	Year
	to 28/2/09	to 29/2/08	31/8/08
	Unaudited	Unaudited	Audited
	£'000	£'000	£'000
Profit before taxation	917	799	1,918
Depreciation	42	24	60
Amortisation	22	-	1
Share option charge	12	18	27
Investment income	(51)	(132)	(234)
Change in the market value of available for  sale financial assets	81	-	51
Movements in working capital:
Increase in inventories	(738)	(1,282)	(1,618)
Decrease/(increase) in receivables	22	(983)	(574)
(Decrease)/increase in payables	(170)	1,709	593
Net cash inflow from operating activities	137	153	224

5. Share Capital

	Half Year	Half Year	Year
	to 28/2/09	to 29/2/08	31/8/08
Allotted, called up and fully paid
Opening	173	171	171
Issued in the period:
Share option exercises	1	2	2
Ordinary shares cancelled	(16)	-	-
Closing	158	173	173

Details of the allotted, called up and fully paid share capital at 30April 2009 were:

Allotted, called up and fully paid

		number	£'000
Ordinary shares of 1p each		15,765,894	158

On 4 September 2008, in connection with the exercise of share options, the Company allotted 137,615 ordinary shares of 1p each for a total value of £31,651.

On 4 September 2008 the Company made market purchases of 114,500 shares of 1p each for cancellation, for a total value of £180,910.

On 15 October 2008 the Company made market purchases of 1,000,000 shares of 1p each for cancellation, for a total value of £600,000.

On 28 October 2008 the Company made market purchases of 581,514 shares of 1p each for cancellation, for a total value of £348,908.

6.  The Interim Statement was approved by the Board on 30 April 2009.

7.  Copies of this statement will be sent to shareholders and are available to the public from the Registered Office at: 

  11 Adelphi Terrace, London, WC2N 6BJ.    

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