Mowbray struggles to stay afloat as $1.28 mln write-down weighs on profitability

Thursday 27th November 2014

Mowbray Collectables, the listed stamp and collectables dealer and auction house, has flagged a first-half loss and is in discussion with bankers to stay solvent after a $1.28 million write down on its goodwill.

The Wellington-based company posted an operating loss of $709,000 for the six months ended Sept. 30, ahead of tomorrow's first-half report, it said in a statement. Poor trading at its Mowbray Bethunes and Peter Webb Galleries combined with one-off restructuring costs and a loss on the disposal of its Sotheby's Australia investment forced a full review of operations and the significant non-cash write-down of goodwill across all its cash generating units.

"Due to both the operating losses and the goodwill impairments the company is in discussions with its bankers as to a possible refinancing and restructuring of current debt levels to ensure continued solvency," chairman Murray Radford said.

According to its annual report, Mowbray held cash and cash equivalents of $1.03 million as at March 31, 2014, while it had $4.25 million of total current liabilities, of which $2.84 million was owed to trade creditors, and $345,781 was bank debt.

In August the company sold its 25 percent stake in the Australian arm of the international auction house, Sotheby's, for an undisclosed amount, saying cash would be directed towards debt. The company has shifted its focus solely to New Zealand, with the exception of its profitable stamp collection business in Australia, and restructured its major business, Webbs gallery in Auckland in a bit to return to profitability.

Earlier that month, 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.

Shares of the company were unchanged at 41 cents, and have fallen 2.4 percent since the start of the year.

BusinessDesk.co.nz

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