Mowbray widens first half loss, considers future as listed company

Mowbray Collectables [NZX: MOW], the listed stamp and collectables dealer and auction house, widened its first-half loss as it records "the worst six months in the company's history" and weighs its future as a listed company. The shares dropped.

The Wellington-based company widened its loss to $1.99 million in the six months ended Sept. 30, from a loss of $70,000 a year earlier, it said in a statement. Sales rose 125 percent to $2.56 million. Before tax it booked an operating loss of $671,000 from a previous loss of $47,000 but below the first-half operating loss of $709,000 it flagged yesterday.

The company yesterday said poor trading at its Mowbray Bethunes and Peter Webb Galleries combined with one-off restructuring costs and a loss of $49,000 on the disposal of its Sotheby's Australia investment forced a full review of operations and the significant non-cash write-down of goodwill of $1.28 million across all its cash generating units. This morning shares of Mowbray tumbled 27 percent to 30 cents, having declined 2.4 percent since the start of the year.

"The core Mowbray stamp and coin businesses are currently being evaluated as to whether ownership within a public company is still appropriate," said the company. "The six months under review is undoubtedly the worst in the company's history. The directors are reluctant to say the worst is behind the group but are encouraged by trading since 30 September."

The company has shifted its focus solely to New Zealand, with the exception of its stamp collection business in Australia, and purchased the 51 percent of its major business, Webb's gallery in Auckland, it didn't already own in a bid to return to profitability. Since taking full control of Webb's operational results have underperformed forecasts presented during the valuation, and "it is now clear that the purchase price of the 51 percent was too high," the company said.

In the six month period the company had an operational cash outflow of $570,000 however the realisation of $452,000 on the sale of its 25 percent stake in the Australian arm of the international auction house, Sotheby's, prevented the deficit from causing "liquidity issues for the group" and is in talks with its bankers to restructure its debt.

As at Sept. 30 it had $2.51 million in current liabilities, including $1.21 million owed to trade creditors, $477,000 in secured loans and $591,000 in bank overdraft.

Across all its segments the company reported a loss, but has changed the way it reports its unit in the year, so it is not readily comparable to the previous period. The Peter Webb Galleries unit reported a loss of $886,217 on $1.62 million in operating revenue. Its auction segment booked a loss of $353,619 on $606,170 in operating revenue, the retail segment reported a loss of $335,837 on sales of $319,569 while all other segments reported a loss of $409,293 on $14,250 in operating revenue.

In August chief executive John Mowbray told shareholders he would be step down as chief executive after 12 years heading the company, and said he was "conscious that we have not achieved what I set out to do, to grow a significant sized company on the NZX." The company listed on the stock market in April 2000.

(BusinessDesk)