Stanley Gibbons Share Discussion Threads

[njb67] 15/7/2016 09:30

I have been long critical of management, which is why I do not hold. SG is though a strong brand, so I will watch with interest for signs that the new management are turning this around. At the right price, it could be a good investment.

[prop_joe] 15/7/2016 09:16

njb67,
I totally agree with you, although I suspect that they have booked repurchased stock at the guaranteed repurchase price which might have been lower than retail price? But this is maybe me being a bit optimistic! Either way I agree that it would lead to a stock being overvalued and would contribute to the increased overall stock increase.
I hold as the current share price is massively below the value of current assets less all liabilities so there is a buffer against inventory write-downs, creditor increases and who knows what other adjustments that might be required.
So far it seems that the new management team are working hard at putting right the wrongs of the past. If they can implement some substantial improvements then I think there could be considerable upside in the share price.

[njb67] 15/7/2016 08:57

Prop Joe
You are right, some of the revenues will shift between years - for products that customers chose not to return. I am also expecting the total revenues to be lower, not least that the price "paid" for returned collections has been overstated (retail price versus cost). We also do not know for sure that these returns were booked as negative revenues. Could they be part of the reason stock levels have spiralled in recent years?

[prop_joe] 15/7/2016 08:51

It would seem that the revenue restatement will shift sales between years. SGI appears to have been incorrectly recognising revenue on investment sales when the deal was struck rather than when the obligation to repurchase lapses.

Good to see the cost savings are ahead of the stated target and a more focused approach to stock management.

But what a mess of things the previous CEO and CFO made! Unbelievable!

On the bright side, could mean that there are lots of quick wins for the new team.

[tsmith2] 15/7/2016 08:45

Barge pole?

[njb67] 15/7/2016 08:31

So we can expect a (downward) restatement of revenues for recent years as their practice of booking revenue for products which could be sold back to the company is not acceptable to the auditors.

It would also appear that when collections were sold back, SGI were recording the retail price (cost plus profit) rather than the cost price. So a write down on stock for this will be needed.

Plus write downs on intangibles.

The cost reduction and departure of Mike Hall and CFO are welcome. Will be interesting to see what the new guy does. There is a potentially good company in here but it has been badly mismanaged for some time. I would be looking out for:

- lower operating costs
- a clear and credible business strategy, including web presence
- a focus on reducing stock levels
- a move away from their (imo) tacky investment fund
- cleaned up financials

GLA

[clocktower] 15/7/2016 08:09

A repeat of FBDU from where it came but the stock will save this and once cleaned up will become a likely target imo.

[spob] 15/7/2016 08:06

I remember reading a book by Jim Slater and his advice was to avoid any company whereby the auditor had signalled something was wrong or refused to sign off the accounts

That has always stuck with me, no matter how tempted I am to get involved

[jeanesy] 15/7/2016 08:03

Looks like these are heading down to zero.. oh dear!

[spob] 15/7/2016 07:53

I'm just speculating HP

I have no idea what's going on here

[hugepants] 15/7/2016 07:47

spob
I was going to say if there was a hole in the accounts why hadn't the new auditors released news. They were appointed 5 months ago and there has been a big seller for ages who clearly knew something.
Then I saw today's news release. They've just added more uncertainty because they've not quantified anything.

[spob] 15/7/2016 07:26

Yes a developing situation

So the previous auditor walked and now the chief exec and the finance director are walking too

All seems very odd to me

[shanklin] 15/7/2016 07:20

Blimey glad to be out looking in rather than in looking out.

Is there any equity value in SGI?

[gbh2] 15/7/2016 07:14

Interesting RNS, full of BS imo and admitting past figures were at best misleading, looks like we'll still be waiting a while whilst the cooking continues!!

Waiting to see market reaction.

[spob] 14/7/2016 23:21

Hugepants

Interested to know how committed you are to this stock at the moment.

ie: What percentage of your portfolio are you currently allocating to SGI ?


If you'd rather not say, fair enough.

[spob] 14/7/2016 23:09

re 2514

good post HP


How do we even know where to start with an inventory figure at the moment ? What if inventories are written down by 50% ?

And what if there is a hole in the accounts that we don't currently know about ?

What if there are liabilities that we don't know about at this point in time ?

What if there has been some fraudulent activity that we don't know about ?


I'm not having a go at you Hugepants or trying to wind you up, i'm just speculating at this point in time.


The actions of the previous auditor are quite unusual and that is the biggest concern for me right now. Also the delay in publishing updated asccounts is also a concern.


I have no position at the moment.

I really want to see up to date audited accounts.

[hugepants] 14/7/2016 21:47

Another down day, there seems to be a never ending supply of shares here!

Looking at the numbers again. There are currently 179 million shares in issue. So current market cap is £18.1M. The last results are the interims to end Sept 2015. At that date;

Net working capital minus ALL liabilities (including pension deficit) was £32.5M

Since then Gibbons have raised £12.3M in a share placing and £2.4M from a property sale. The trading update in Feb also implies an H2 loss of approx. £2M.

So that would give 32.5 + 12.7 = £45.2M = 25.2p per share.

Even if you knock off 10% of the value of the inventory that still gives over 23p per share. Restructuring costs? Another 1p-2p?

But there are also fixed assets on the balance sheet that will have value. eg.
The reference collection worth £1.4M (0.8p per share)
Customer lists has book value of £3M
Brands and Trademarks has book value of £6M.

Even if you write customer list and brands/trademarks down by 50% to £4.5M that's another 2.5p per share.

So totting all that up there should still be 25p of quality assets even after writing inventory down by 10% and factoring in some restructuring costs.

There is also a deferred tax asset of £4M. Is this used up to offset paying tax on future profits?

And Gibbons are also targeting AT LEAST £5M in annual overhead reductions and announced in March they had already cut £1.3M.

Surely after cutting costs by £5M this company should be making at least £2M-£3M profit ,never mind the huge discount to net assets.

[clocktower] 14/7/2016 15:46

Not looking good at all with all the delay with accounts, plus the continued slide in the share price

[gbh2] 14/7/2016 08:40

This could continue in no mans land until September and even then I think they could once again delay post any kind of update, absolute disgrace imo !!

[gbh2] 12/7/2016 15:49

Not really I wanted another 7K and they gave me 6886 but I've since realized they adjusted my order to fit what I had in my trading account!

Not used to Trading with ready cash yet :(

[clocktower] 12/7/2016 15:06

gbh2 - was it a large order?

Seems to have settled for today or are we to see another late rally?

[gbh2] 12/7/2016 14:08

I had my order reduced.

[clocktower] 12/7/2016 14:06

You might be right she-ra MM games can buy online @ 10.75p

[gbh2] 12/7/2016 14:04

My emailed query re the results was answered by an RNS which told us nothing, surely insufficient volume for pump & dump (other than today).

[clocktower] 12/7/2016 13:42

Maybe accounts are ready and above expectations!!