Stanley Gibbons Share Discussion Threads

[bookbroker] 02/4/2015 14:29

I'd stop focusing on the website, it is immaterial to the commissions made on private sales, I don't believe any analyst is factoring in a great contribution from the new platform, a case of suck it and see, the platform should be a relatively cost effective way to increase revenue once it is up and running, I think one just has to wait and see, it's been a long time coming so why expect fireworks!

[graham1ty] 02/4/2015 14:16

Well done Superior.

A quick thought on the new IT platform. And "gross merchandise Value". GMV is the gross amount paid for buyers on the platform, so when someone pays £100 on EBay, that is the GMV. However ( as for auction houses) that is not SGI revenue: they only account for the commission/fees, a much smaller amount. How much smaller ?

In 1H bidstart reported GMV of $1.04m and commissions of £80,000. Worth saying immediately that bidstart revenues in the year before the 2012 acquisition were £300,000 so have just about halved. At the time of the bidstart acquisition, SGI said that they would aim to get 8% average commission/fees and so the 1H numbers are pretty much in line with that. But, do the sums: if SGI captures £100m of GMV through its new site ( that is an awful lot of transactions) then revenue to SGI is just c£8m, which is only just about 12% of SGI forecast turnover. In other words, this has to balloon amazingly to make a great contribution.

Are SGI chasing market share, chasing GMV for GMVs sake ?

[superiorshares] 02/4/2015 10:52

I am the MAN !

[bookbroker] 02/4/2015 09:28

Graham - I suppose that it is the nature of the business, you look at the volume of business that goes through the major auction houses, marketing expenses and guaranteeing the value on the product might be par for the course, it's surprising how the business works, you read about pictures going for £100mln., and you'd think that Sotheby's and Christie's are raking it in, but the bottom line suggests not. Even the auction houses themselves are deemed trophy assets.

[graham1ty] 02/4/2015 09:11

SGI is meant to be diversifying hence Noble, Bloomsbury, Mallett etc yet can still be held hostage by a couple of big retail sales....

[bookbroker] 02/4/2015 08:59

That's the nature of the auction business, one consolation is that Stanley Gibbons is a household name synonymous with primarily stamps, however it is still a known globally and the article in the Telegraph the other day is correct in saying that collectables are become likewise around the world, disappointing but if they can achieve some decent sales in the next year with the assets they have it'll be back. I bought in recently, sod's law, but there is value here certainly in assets, one has to believe as economies improve so should the desire to put your money in value assets like collectables, I don't think interest rates make any difference to this kind of product. People who collect are not bothered where interest rates might be, they got the dough and do it for interest as much as accumulating! Think Bill Gross, ex Pimco, an avid collector and trader of stamps.

[jeanesy2] 02/4/2015 08:11

Nearly right 218.5. This company really should be doing much better with interest rates being so low. Very disappointing !

[jeanesy2] 02/4/2015 07:59

Not good .The recent poor price performance is now understood. I expect an opening between 225 and 250p

[bookbroker] 02/4/2015 07:53

At least they don't have too much debt, still pretty tiresome about warning, bought t'other day on basis of seeing more value in collectables, typical bad timing!

[graham1ty] 02/4/2015 07:22

oh dear. two things I see immediately. The IT project is delayed AGAIN. It is now about four years late.

Second, the statement that they have been lucky enough to pick up a lot of top end stock......yet no buyers......so a focus on reaising value from that stock: that sounds to me like they realise that over £50m of stock ( at the last figures) is crazy and that they must turn some of that into cash.

As an aside, I hate it when Companies say " we have significant unrealised profit in our stockholdings". It aint profit until it is sold. SGI has been accumulating stock and not shifting it....

more later

[graham1ty] 31/3/2015 22:01

hywel, I meet with him from time to time. He knows my views on the IT in particular.

[hywel] 30/3/2015 20:04

Graham have you emailed the company / Mike Hall your concerns about the website / lack of quality stamps available?

[graham1ty] 24/3/2015 19:59

2020, I wrote you an earlier reply which has been gobbled up by the ether. Bother, it was about five paras and I type so slowly, will leave rewriting until tomorrow

[graham1ty] 24/3/2015 19:58

2020, can I ask you, as an investor, have you got the guaranteed return product ? Have you tried realising any part of yr stamps portfolio ? And do you believe the valuations that you are sent 9 presumably showing that you are making a paper profit ?

[2020hindsight] 24/3/2015 17:52

I agree Graham1TY.

I'm an investor (customer) so get most of these things. To be honest, most of Mike Hall's emails go straight in the bin. They come across as rather dodgy and amateurish to me - a cheap salesman out for a quick buck is the impression I'm left with. But they've been doing this for years. SG should be better than that.

[graham1ty] 24/3/2015 17:18

SGI are going to get themselves in trouble again. I have in front of me an Offer to invest for a 13.3% return this year, 105% over 5 years in a unique bundle of stamps. In big letters I am told it is limited to £3m worth and I have to invest £100,000 minimum.

Who replies to these ? SGI got in trouble over it's guaranteed return products a few years ago when quite a large potential liability started building up on the Balance sheet so it stopped selling them.

Mallett, Noble, Bloomsbury, all going upmarket.......cold emails offering unjustified returns.....firmly downmarket and in the same category as solar panels, rumanian property and alchemy. SGI are trying to capitalise on their good name and pick up quality mega collectors. And then you make everyone laugh by sending out this trash. Oh dear

[bingaxu] 19/3/2015 20:52

This is an article from [...] on 17th March 2015:
Is Stanley Gibbons (SGI) now a "buy"? The five-year chart for the AIM-listed shares in this stamps and related collectibles dealer slid from a 384p peak in early 2014 to 244p near the end of last year. They currently trade at about 275p having failed to sustain a bounce to 310p. This would appear to re-position the stock on its trend-line, although it's also possible the 2011-13 up-trend benefited from quantitative easing (QE) boosting expectations for "alternative investments" such as collectibles.
The table shows moderate growth in earnings per share (EPS), helped by acquisitions, but it is only in the current financial year to end-March that a re-rating to £13.6 million pre-tax profit kicks in. This 11 March forecast came from Peel Hunt, the company's broker and AIM nominated adviser; i.e. should mean it has been signed off by the finance director as fair. It represents a price/earnings multiple of about 11 times and dividend yield nearly 3%, which is not demanding, although it remains early days to define the earning power from various acquisitions. Management's stated aim is: "to transform the company from a stamp and collectibles trader generating steady growth, to a leading online marketplace and global auction house for collectibles with far greater growth potential."

Wherefore the trend in collectibles' auctioneering?

It's worth trying to gain a sense for context, as this trend could well be cyclical. Collectibles auctioneering isn't a novel theme in the stockmarket either: amid the dotcom boom that peaked in early 2000, AIM-listed iCollector - an online auctioneer - became a hot-stock, but got into financial difficulties and was acquired for a nominal sum by Ableauctions Inc, which itself became a shell company and is now Sino Coking & Coke Inc (SCOK).

Stanley Gibbons Group - financial summary




Estimate
Year ended 31 Mar
2009 2010 2011 2012 2014 (15 months) 2015
Turnover (£m) 23.4 26.4 35.7 35.6 41.5
IFRS3 pre-tax proft (£m) 4.1 4.3 5 5.2 1.8
Normalised pre-tax profit (£m) 4.1 4.5 5.1 5.5 2.9 13.6
Normalised earnings/share (p) 14.7 15.8 18.2 19.4 8.3 24.4
Price/earnings multiple (x)
33.1 11.3
Cash flow per share (p) 16.3 7.1 14.2 1.6 -10.2
Captial expenditure per share (p)
0.9 5.9 2.3 2 4.9
Dividend per share (p) 4.8 5.3 5.8 6.3 5.4 8
Yield (%)




2 2.9
Covered by earnings (x) 3.1 3 3.2 3.2 1.8 3.1
Net tangible assets per share (p) 71.4 79.3 84.3 105 110
Source: Company REFS.
The debacle involved classic risks of being a pioneer and obviously many early dotcom businesses failed, but the medium has since proved highly successful. More significant perhaps is what genuine long-term growth trend in collectibles exists? Years of QE have boosted asset prices with a spill-over into the likes of art, fine wine, classic cars etc. Stanley Gibbons' area of expertise is largely stamps and coins, also antiques with last September's £8.6 million acquisition of Mallett plc.

Mind how the logic for this longstanding plc selling itself was demand for antique furniture and works of art becoming more volatile in recent years, its 2014 interim results tipping into a £0.7 million pre-tax loss. A sales profile of mainly small, very high value items has meant lumpy profits, hence it deemed better to be part of a larger group. So even during a period when "the rich have got richer" - seemingly ideal conditions for the demand and price of collectibles to rise - there have been challenges.

Unlike financial assets, collectibles do not have objective measures of intrinsic value, they depend on market value i.e. what people are prepared to pay. It means that during times of rising confidence they ought to benefit, but equally in a "de-risking" period they could drop back as wealthy people prioritise other issues. That appears to be roughly how cycles may operate, and is a broadly positive outlook unless some major crisis strikes.

Re-vamped website hopes to transform collectibles trading

If visiting any of the company's varied web-links they default to the new Stanley Gibbons website which was "soft-launched" last November before a "hard launch" in the first quarter of 2015. It remains to be seen, what is the upshot for revenues after various firms have been acquired (see the online shopping area in the bottom left corner of the website) and last year, two "seven-figure" stamp collections "providing a solid platform to deliver growth in core dealing activities to both specialist collectors and investors."

Interims for the six months to end-September 2014 showed similar like-for-like sales of £17.2 million, before acquisitions, although like-for-like trading profits did jump 93% to £3.7 million. Stamps were the principal contributor followed by coins and medals then other collectibles. Including acquisitions and before various exceptional charges, adjusted pre-tax profit more than trebled to £5.3 million. Stock had risen from £22.2 million to £50.7 million over a year, stated at historic cost.

"The quality of our stockholding at this time provides the backbone to delivering short-term growth." Management spoke positively of progress with various acquisitions, the likes of Baldwin's and Murray Payne contributing £2.4 million to trading profit and achieving cross-selling objectives; also the sale of a Baldwin's freehold property realised £4.5 million as staff transferred to Stanley Gibbons' offices.

The acquisitions help explain why £33.1 million out of £85.4 million net assets constitute intangibles, although the group has not run up much debt: there being just £3.3 million borrowings (mainly overdraft). Balance sheet cash had, however, run right down at end-September, from £4.2 million, it would appear mainly from an increase in inventories. The interim cash flow statement cited £8.4 million net cash used in operations and £1.9 million paid in dividends. All this suggests it is a case now of seeing what the acquired businesses and stock can deliver, there being little room for further expansion without debt.

Scope for a status change, if rather speculative

As with many smaller stocks, Stanley Gibbons rallied during 2012-13 as investors’ risk appetite increased, only to drop back in 2014. This has put the business on an undemanding rating relative to a sensible strategic move - of rationalising smaller collectibles' houses under one main brand. Stanley Gibbons looks for example a good choice of AIM stock to hold - in portfolio context - for a minimum two years in order to cut inheritance tax liability. Its financial results should re-rate, just mind it is still early days to judge the longer-term earning power.

[superiorshares] 19/3/2015 19:25

Graham- I collect stamps but never had a stamp club in my school. im 48.
you would have to assume stanly`s stock is all catalogue quality, so should sell
for catalogue price ? AS long as stanl`y has the financial ability to hold this stock, until buyers, buy, it doesn't matter how much stock they hold. The two problems I can see at the minute, 1 the well talked about internet site. 2 The marketing of alternatives as a store of value " at the minute".
Follow the stockmarkets and everything is rosy again ? A near financial collapse, caused by insane debt ! has been cured with a lot of debt piled on top. Who would you trust your money to grow with ? Tesco, co-op bank, Halifax, royal bank of Scotland, nat west etc etc. if your looking for a long termer Stanley will be the one ( check its history ) The debt issue, will come back to haunt Europe and north america in the not too distant future. That's when the alternatives will soar ! . stanly`s stock pile will dwindle with the relavent catalogue price increases. That said I think we could be in for a profit warning and a share price a lot lower than we are at the minute.

[whackford] 19/3/2015 14:30

I cannot see in the Corporate Calendar when the final results due be released.
Maybe a bit early yet.
Last finals 27 June 2014

[jadeticl3] 19/3/2015 12:06

The story the share price is telling is not a happy one. The last three months has not been a good period for SGI shares. Were they inflated in autumn last year because since then the demise has been clear with no sign of a halt just yet?

[graham1ty] 18/3/2015 16:30

II and the Investor's Chronicle been pushing this for years.........

[robinnicolson] 18/3/2015 15:58

Edmund Jackson at Interactive Investor on Stanley Gibbons:

"Undervalued and earnings upside"

[...]

[graham1ty] 17/3/2015 11:53

But is there money to be made ? SGI tell us it is boom time for collectibles and the only evidence is their own index and some very rare stamps. The top level, absolute best, of any asset class will do better than mediocre. It is easy to quote record prices for absolute rarities. However, the middle range flounders as there are just not enough collectors. Mike Hall said to me that only one in a hundred stamps are catalogue quality. So, 99% are worth only a fraction of the quoted prices. I would then say ( as a collector) that only 1% of that 1% are so superb that they get full catalogue value.

So, Geoff, are people getting interested ?

[geoff21] 17/3/2015 11:31

If there is money to be made, people soon become interested, whatever age.

[graham1ty] 17/3/2015 07:48

bingaxu, just read that link. Hardly price sensitive. almost a school boy article on stamp collecting.

One worry for those pushing stamps is there are no new collectors. The average age at Stampex is over 60 and rises each year. The counter argument from SG is that all those who collected as kids in the 50s and 60s are now affluent retirees and no revisiting their childhood hobby, but with much more money. They can sustain a certain level of interest, but the next generation of collectors just does not exist. How many schools have stamp clubs ? How many kids get the Post Office new issues as birthday presents ? Very very few