Mowbray Collectables, the unprofitable listed auction house business, has sold its stamps, coins and bank notes collectables business to outgoing chief executive John Mowbray in a bid to return to profitability.
The Wellington-based company has sold its wholly-owned subsidiaries Mowbray Bethunes and Wildlife Philatelic for their undisclosed value as at March 31 which will be confirmed in the next few weeks, it said in a statement.
Given the close involvement of John Mowbray with both businesses the auction house set up a sub-committee of its independent directors, chaired by Chris Swasbrook to manage the sale.
Last August, 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.
The sale comes after the company reviewed operations after it widened its first-half loss to $1.99 million in the six months ended Septemeber 30, from a loss of $700,000 a year earlier, describing it as "the worst six months in the company's history".
Poor trading at its Mowbray Bethunes and Peter Webb Galleries combined with one off restructuring costs led to a $1.28 million non-cash write-down of goodwill across all its cash generating units.
The company has shifted its focus solely to New Zealand, with the exception of its stamp collection business in Australia, and purchased the 51 per cent 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 November.
In December, the company secured short-term and long-term financing with Bank of New Zealand for its Peter Webb Galleries unit to enable it to continue trading, having warned in November that it was in talks with its bankers about refinancing and restructuring its debt to ensure its continued solvency.
Shares of the company last traded at 20 cents and have fallen 23 per cent since the start of the year.