Stamp collecting is benefiting from the recent stock market turmoil as investors look for different places to put their cash, according to stamp group Stanley Gibbons.

Chief executive and chairman, Paul Fraser, said there was a renewed interest in stamps as an alternative investment in the wake of the stock market's poor performance and current low interest rates.

He said: "Although people buy stamps not with investment in mind, when it gets to the point money in a building society is only earning three or four per cent, it changes."

Mr Fraser made the comments as he announced a threefold increase in profits at the group.

For the six months to June 30, pre-tax profits rose to £203,000, up from £67,000 for the same period last year, although turn-over fell four per cent to £4 million.

Stanley Gibbons, which has a stamp shop on London's Strand, said the profits rise over the past half year had been helped by improved margins and reduced salary costs.

During the half year, the group, which has publishing operations in Ringwood in Hampshire and internet operations in Bristol, reduced staff numbers by ten to 118. No more cuts are planned.

It has been turning itself around since being spun out of mail order group Flying Flowers two years ago.

Flying Flowers, now known as Flying Brands, split off the stamp collection business after a disastrous integration attempt.

The mail order group bought it two years previously, hoping to benefit from owning the stamp firm's two large databases but the move was dogged by problems and profit warnings and a heavy share slump followed.

On the demerger, the new company was called Communitie.com, reflecting its strong internet base but was renamed earlier this year as Stanley Gibbons.

Mr Fraser said the business had been turned around and was set on a positive course for the future.