Stanley Gibbons Share Discussion Threads

[graham1ty] 16/9/2013 15:39

Investors Chronicle has been bullish on SGI for ages........protecting their position. ygor suggests this has been well leaked......not in the SG price. The rise from c 280p in July did not suggest a £37m fund raising.

[dashton42] 16/9/2013 15:07

Simon Thompson (Investors Chronicle) gives an update on the proposed tie-up between SGI and NBL today, and recommends buying SGI:

[dashton42] 14/9/2013 09:03

Yes, and in retrospect, there were some heavy hints in the interims of the direction of travel:

"The market for rare coins, in particular, is a key one for us because, although we currently only trade at modest levels, overall it is a large collectibles market. Our ability to develop into the rare coin market is restricted by the need to possess specialist expertise and, as such, we will look to add expertise over time to develop our offering further."

[ygor706] 13/9/2013 18:30

I think that this deal has been well leaked ........ there was very large selling of SGI earlier in the week. Noble's recent performance has been disappointing yet the share price went better; now we know why. If brokers' forecasts are to be believed the deal may well prop up SGI's earnings for this year and Noble should perform rather better in 2014. We won't really know how the numbers are likely to pan out until the equity placing terms are announced. All my numbers were done at £3 per share.

[dashton42] 13/9/2013 08:28

Agree 100% with that G1TY - I thought that there might be downward pressure on the SGI share price following the announcement. I can't really undertand why this hasn't happened, either.

I think that the proposed deal makes perfect strategic sense, as I've said before, but integrating a company like NBL would no doubt be a challenge from a human point of view, and would also have an impact on IT development and rollout at SGI?

I don't know what cost savings opportunities would arise, but presumably there are areas of potential rationalisation (I'd imagine Apex Philatics could easily be merged into SGI's current retail/auction operations), and back office functions which could be merged.

I'll be very interested to see what the press (i.e. Investors Chronicle) makes of this, assuming a substantive offer is made.

[graham1ty] 13/9/2013 07:09

Ive always worried about Noble.....nothing I can air on a bulletin board. I recall issues of provenance and genuineness in the coin world. You cannot dig up stamps from dodgy digs and smuggle them out of countries. Not that Noble was ever engaged in such matters. Anyhow, the valuation is pretty high. hope SG know what they are doing and this doesn't take their eye off the ball. The SG team has grown up pretty well integrated...the big family...and hope there are no issues with the NBL Board

I am actually staggered that with the potential share issue that the SG price has not been really hit

[dashton42] 12/9/2013 08:54

I agree about the dilution concerns, and it is a very large placing relative to SGI's market cap.

No volume in SGI yet - is it suspended (?!), or in extended auction?

[ygor706] 12/9/2013 08:30

The numbers in this announcement don't entirely make sense to me. There are 16.5m Noble shares in issue and SGI says it will pay 192.5p in cash and 62.5p in new share. My calculator is showing that this only means that less than £10m of new shares is required yet a placing on £37m is also mentioned. Looks like a very large capital raising to me and I'm wondering if a bit of dilution is on the agenda.

[dashton42] 12/9/2013 07:34

Look at post 1194 - I must be psychic!!

imo, this would be a good deal for both companies, and makes perfect strategic sense.

[blondviking] 12/9/2013 07:22

Looks good news!

Possible acquisition of Noble Investments (UK) PLC

The Board of Noble Investments (UK) PLC ("Noble") announces that it has received an approach from The Stanley Gibbons Group PLC ("Stanley Gibbons"), which may or may not lead to an offer from Stanley Gibbons to acquire the entire issued and to be issued share capital of Noble, which would be effected by means of a scheme of arrangement under Part 26 of the Companies Act 2006.

There can be no certainty that an offer will be made, however the Board of Noble anticipates that an offer, were it to be made, would be at an offer price of 255 pence per Noble share, of which 192.5 pence would be in cash and 62.5 pence would be in new Stanley Gibbons shares. The Board of Noble has indicated that it is likely to unanimously recommend such an offer, were it to be made.

Stanley Gibbons reserves the right to change the form and the mix of the consideration proposed.

The proposed acquisition would require Stanley Gibbons to carry out an underwritten placing of new Stanley Gibbons shares to raise gross proceeds of approximately GBP37 million. The new Stanley Gibbons shares to be issued to shareholders of Noble as part consideration for the acquisition of their Noble shares would be calculated at the issue price per Stanley Gibbons share in this placing.

The Boards of Stanley Gibbons and Noble both believe that the combination of the two businesses has considerable strategic and financial logic and will make further announcements as appropriate in due course.

Stanley Gibbons must, in accordance with Rule 2.6(a) of the Code, by no later than 5.00pm on 10 October 2013 (or such later date as the Takeover Panel may consent to at the request of the Board of Noble), either announce a firm intention to make an offer for Noble or announce that it does not intend to make an offer, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies.

[graham1ty] 14/8/2013 10:12

Agree with all of that. I think that SG should aim to be the dealer of choice for any serious collector or seller. Full stop.

They have not made vast inroads however in becoming that. I agree that getting a few stamps away at £1m must be far far easier money ( however u define margin).

I believe the dream is for SG also, at the retail level, to become where millions of negligible value transactions can take place ( and millions of pennies here and there add up to easy money)......UNLESS it has taken u five years, about three different IT teams and possibly £2-5m so far in IT costs, restructuring costs, recuitment costs. it would be an easy exercise which I will do one day to look ate their last 5-8 Annual reports to see how much they say they have spent on IT development. It is a lot and the jury is still out on whether it has been successful or whether bidstart is even the right platform.

In the meantime, in the world of collectibles, SG punches above its weight in brand, but way below its weight in value, profit and market share. This should be worth so much more. And maybe that is why we are above £3. However, with flat eps for two years, and already a pretty fully valued earnings multiple, if they fail to deliver "transformational" growth and leap frog to a new level, i think shareholedrs will get disillusioned.

[dashton42] 13/8/2013 16:10

g1ty - Agree that Bidstart is way behind Ebay. Still, I think that it's a neat way of earning commission without doing too much, apart from providing the platform. The test will be how many Ebay, and other, users they can tempt onto their site instead - perhaps lured by lower overall costs of doing business, more personalised customer service (?!), the SGI reputation, funky bolt-on apps, or whatever the USP is.

I also think it's key to develop regional domains - i.e. bidstart.co.uk etc. Haven't really heard anything on this, so don't know if it's on the cards.

When all's said, I think it's a smart move by SGI to add the transactional platform-type business to their existing retail and investment channels; once it's developed (or in this case enhanced and integrated), it should become a cash cow if they can inspire customer loyalty and build the customer base - even if it'll never reach Ebay's size.

Can't really comment on your "stamp-clubby" comment - has this been an expressed aim? Can't see where the money is with that.

Can't comment on margins either, but it would be interesting to know how the margins of top end and cheaper stamps compare. I would've instinctively thought that even if the margin is relatively less on top end stuff, this is still where they make their money - rather than on the lesser stuff. They'd have to churn an awful lot of low value stamps on a high margin to make the same profit as on a £100,000 stamp, even if the margins are lower.

I'm sure that SGI has a good idea of who the big money customers are in the philately world and which estates are open to sales, and that they target these people discretely. I'm sure you don't stay in business as long as SGI has without knowing these things. In the same way, I'm sure the people at NBL will have a pretty good idea of who the big shots are in the world of numismatics.

(Incidentally, I know it's cloud-cuckoo land, but I've always felt SGI and NBL would make a good strategic fit, espectally with SGI currently looking for coin experts!)

I hope that SGI aren't intent on catering to the mass market at the expense of their high-end and legacy customers, and that, instead, Bidstart represents the development of an alternative, and supplementary, revenue stream. We'll see.

[graham1ty] 11/8/2013 07:07

Dash, if you can become the online platfom of choice......fine. I think SG want to rival an EBay type platform where they do not have to get their hands dirty, take comissions from all those millions of third party transactions.....but they are way, way behind EBay on that.

Second, I believe they want to be a "stamp-clubby" exchange site where u or I can say we want a decent example of a low value stamp, and someone offers irt cheap or swaps fopr one of my spares: a collector exchange.....is there any money in that unless u are dealing in millions of transactions........way off that.

Mike Hall has said to me that the very top end material is lower margin ( if u think about, u can buy stamps at pennies and sell for a couple of quid..... mid value, say £10 cv stamps, which SG can pick up as part of a collection at negligible book cost and sell at a multi-thousand %( yes thousand) premium. A stamp bought for 10p and sold at £10 is an examlpe. But while that gives a GROSS margin of 99%, you need massive volume to cover the handling costs.

I had always assumed that leveraging the SG name meant being "the dealer of choice". SG should have "the list" of major collectors worldwide. I am making this all up, but there is porbably someone out there spending £25m pa on stamps ( an IT boom vendor, rediscovering chldhood interest who does not like yachts). There might be a another two or three in the £10m bracket and then maybe a total of 100, maybe 500 who spend £1m+ plus each year on their collecions. SG must hae that list, find that list, work out that list and then make sure they are the supplier of choice for a bigger and bigger percentage of that list. This "list" will include vendors ( mainly Estates of dead old collectors) and either through sale, or auction, SG has got to be the place to go.

I do not think Mike hALL thinks they can grow that way. Or at least not fast enough.

Hence mass market ( or at least trying to satifsfy the mass market at the least possible cost). Hence teams on IT at SG, then in the US, now in Jersey. they must have spent £5m on IT ( and redundancy top previous teams)......amd still we wait

[dashton42] 09/8/2013 15:57

g1ty - agree with much of what you say. I too was somewhat taken back by the admission that they weren't too clued up on coins, and were looking for some expert help!

Re. entry to the US, presumably this refers to the investment-grade stuff requiring personalised customer relationships / persuasive sales staff, rather than cheapo items flogged by independent sellers on Bidstart, largely in the US, on which SGI scoops small commissions.

I don't really know why they need to find a partner for this, and can't strike out on their own, using their name and reputation. Maybe it's all about getting the expertise though, as with the coins and medals.

You're right that they seem to be dependent on a small number of high net worth individuals for a substantial proportion of their revenues; hopefully their Asia presence can up the number of their wealthy clients. I'm sure there are a few wealthy philatelists they can target in the US too...

There was something about the integration of Bidstart with the legacy SGI website - presumably this confirms what you were suggesting previously about all the IT work being transferred to Raleigh...? Also, development of the investment side of the website, for go-live later this year, with the rest of the integrated IT systems (hopefully) being rolled out in 2014.

IT definitely seems to be the make or break factor for the next year or two; get it right, and it could be the game-changer. Get it wrong (development/cost overruns), and the gloss could quickly come off the share price

[phoenix1234] 09/8/2013 11:12

Stanley Gibbons interims – look forward!

[graham1ty] 09/8/2013 10:27

Remain underwhelmed Dash. A couple of comments.

This reinforces that higher costs are going to mean no increase in eps for a couple of years

Internet revenue remains TINY. they have been talking for ten years of the great trading platform that will transform the way we buy/sell collectibles......yet still only £1.2m of revenue online. More development costs ( £0.56m), more reviews of IT, a team in Raleigh, a new e-commerce team in Jersey. The transformation is still some way off.

Cash flow has improved only because, for the first time for a while they have realised some of their enormous stock position. Yet, presumably they can make a decent margin on some of this mega stuff. so, you would think a reduction in stock of £3m might add say £600,000 to the bottom line ( I would guess they hope to make at least 20% turn on mega stamps ?).......they specifically refer to "delivering short term growth". I think they have sold some of their megas to cover up lack of profit elsewhere.... ( or at least not the hoped for growth)

At the back. Two clients were £2.8m and £2.54m.....so 20% of ALL sales to just two collectors. Amazing clients if you can get them.......but bloody great hole if you lose one of them.

Looking for a business partner in the US ? So bidstart is acknowledged to be just a platform. It is NOT an entry into the US

Admit they have no expertise in coins. Amazing as they have been buidling that side for a few years now.

Do not get me wrong. I think this brand should be worth £1bn. It is the biggest, best name in stamps worldwide, in a massive market. They are still failing to realise value from the name. All slow progress, but no game changing moves yet. all IMHO. U know I have been a holder on and off for years, but I do feel this is running ahead as yet for no good reason. Eps in 2014 forecast to be below 2012 because of all these higher overheads.....

[dashton42] 08/8/2013 10:14

If my maths is correct, so no guarantees, the uplift in commission/subscription revenues contributed mostly by Bidstart for the period was 359%. An impressive figure, imho, although from an admittedly low base.

Think you're right jeanesy2 - some profit taking was inevitable.

[jeanesy2] 08/8/2013 07:51

Solid results and good outlook. Profit taking may well happen though as shares have had a strong recent performance.

[shauney2] 02/8/2013 10:11

Could be the tip in yesterdays Shares magazine.

[jeanesy2] 02/8/2013 10:08

What is causing the rise here ?

[phoenix1234] 06/7/2013 17:47

Stanley Gibbons – The Funny Old world of The Stamp Industry Rumour Mill

[dashton42] 05/7/2013 09:22

There's an interesting article on investing in stamps on the Investors Chronicle website:



And another one:

[dashton42] 08/6/2013 16:24

Wish I knew! An online search just threw up the fact that SGI is attending a stamp fair in Swindon this weekend, but that hardly seems enough to move the share price



As usual, there must be some "raw" not available to mere mortals...