Mowbray Collectables reports $60,000 net profit

Media release – November 29, 2007

Leading NZ stamp dealer Mowbray Collectables reports half yearly $60,000 net profit

Leading New Zealand stamp dealer and collectable auction house today reported a half yearly net profit of $67,788.

The result was measured under the new international financial reporting standards (IFRS) and compares with the reported profit for the previous comparative period of $30,500 under the old accounting standards (or $314,940 for the comparative period under IFRS), chairman Murray Radford said today.

In line with previous years, the results for the first six months trading are not indicative of the likely outcome for the full year, which is expected to exceed last year's profit.

Post September 30, the major Mowbray International stamp auction achieved hammer sales of $1.2 million creating a new revenue record; Bonhams & Goodman (20 percent owned) achieved $3 million sales at their November sale; and the Stanley Gibbons auction in Sydney on November 28 realised $[result awaited].

The listed group's core stamp businesses, including the World Wide Fund for Nature stamp programme in Australia, continue to trade well with good stock levels to offer clients.

In Australia, the strong performance of Bonhams & Goodman continues and their profit contribution to the group is growing significantly. However, as a consequence of that growth we are yet to enjoy dividend cash flow, as the retained profits are used to finance the growth.

As expected, it is taking time to recover from the departure of three key employees from Peter Webb Galleries (49 percent owned), who have set up in opposition in Auckland. The New Zealand art market continues to evolve and is now beginning to settle in its new form.

Strategies that have been put in place, in conjunction with new initiatives planned for the new calendar year, will ensure Webbs retains its position as New Zealand’s leading art auction house.

The interim profit has been significantly impacted by the continuing poor performance of Stanley Gibbons Australia. A review of this business and its rebranding to Mowbrays Australia will allow a new approach to marketing including the use of the internet for its auctions.

The February 2008 launch of the new brand in Melbourne, including an additional and significant Lionheart auction, should lead to a worthwhile contribution to the final annual result.

All group companies have been assessed for goodwill value under IFRS with the result that no impairment of goodwill is recognised in the September result. This means that providing these companies continue to trade at current or better levels, no further write down of goodwill should be needed.

Because of the activity imbalance between the two trading half years and the lack of a significant trading profit, leading to insufficient imputation credits, the directors have decided not to declare an interim dividend for the time being.

However, payment of an interim dividend will be reviewed as the year progresses, and given the strong start to the second half the directors expect to announce a dividend at least equivalent to last year's dividend, before or at year’s end.

ENDS

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