Stanley Gibbons Share Discussion Threads

[eastbourne1982] 18/10/2015 18:00

It would be interesting to know what kind of commission Baldwin's takes on these sales particularly the higher priced items, also are these high value coins generally sold on behalf of clients (I presume this is the case) and that Baldwin's / SGI does not actually own these coins.

[pavey ark] 18/10/2015 17:36

Eastbourne , yes, it makes for interesting reading.
I like the bit about the room being packed and obviously two world records greatly helps sentiment towards all coins and even other collectables.
I had a look at the auction on the 29th where a large number of coins went under the hammer.
No world records here as it looked a bit more bread and butter stuff with prices ranging from £60 to £3000 but almost all achieved a price greater than the estimated range and some achieved 50%+ over the guide.
I know nothing about this business but it does look good to me (I think !!).

[eastbourne1982] 18/10/2015 15:13

Some very high prices achieved at Baldwin's recent coin auction, see:

hxxps://www.baldwin.co.uk/media/cms/press-archive/Press%20Release%20Auction%2096.pdf

[oakville] 13/10/2015 05:29

Toronto Star has an article today. Bearish but will look into this stock.

[pugugly] 12/10/2015 17:42

Standard Life now reduced to below 5% - from rns looks like 170,000 sold.

[eastbourne1982] 12/10/2015 11:27

Well I've swooped for a few more this morning at under 92p, the share price is just about the lowest it has been for 10 years, is the business in it's worst position for 10 years ?? Far from it imho, in fact potentially if it performed more in line with the potential it has it should be doing very well relative to historic levels, the risk / reward here is fantastic however one has to be comfortable with a fair bit of short term frustration / annoyance.

[pugugly] 12/10/2015 09:05

spob:Thanks for link.

Nothing really there that has not been pointed out by many above in the last few days - some useful points (again many mentioned above) as to how the board may trade their way out - the usual (I assume as first cast I have listened to)expose of Nomads and PR Coys and the press. Some interesting comments on stock valuations and customer trends but probably best to listen to.

What was missing and would have been most useful was any comment on staff departures and reasons why.

The lack of any real (for me) clarity in this area is why i am still uncertain.

Share price down again at time of posting to 90/92.

[pugugly] 11/10/2015 18:08

Eastbourne: I would not be here unless I thought there might be value at some stag but having had a number of discussions with Mallett prior to their takeover. The value of stock is no real indication of the value of the company (imo).

Thanks to Rainmaker (his post on I think Mallett thread "Rainmaker - 10 Apr'10 - 15:41 - 65605 of 65624 - though not sure of his source article

"So now we are left with just Mallett(MAE)currently 67.5p with a 5 year price range of approx 260p/42p.If we exclude deferred taxation, tangible net asset value is 119p per share or £16.5mln. Net Working Capital a proxy for Mallett's minimum liquidation value is 87p or £12mln. In the year to 31 Dec 2009 they made a loss of £1.8mln BUT in the same period the Company transformed from net debt of £2.3mln to net cash of £0.8mln and have reduced annual operating expenses by £2mln.

And look where Mallett had to sell out to SG - In this market (imo) it is down to timing, management ability and networking with ultra high net worth potential clients, PLUS operational efficiency and a gut feel for which sectors are likely to offer most upside (and hence margin) potential. In plain speak which are likely to become fashionable and which are most likely to lose their cachet.
Mallett (from memory) suffered erosion of value due to poor judgement calls on merchandise categories.


On virtually all count it would appear that management here have under performed.

There is certainly (from personal observation) a trend for a significant number of European and Some American HNW and UHNW persons to downgrade their public persona (cars, clothing, entertainment etc though I am not close enough to your trade to judge it applies in your area.

Hence a judgement call that unless there is swift evidence of a recovery in revenue and margins the share price may well have significantly further to fall - this could also be the case if further haemorrhaging of ??talent ??

[eastbourne1982] 11/10/2015 16:15

The more I think about the big drop last week the more unbelievable I find it, this was just a year ago when the share price was near £3, has enough changed during the last 11 months to warrant such a fall, I certainly don't think so and consider these to offer exceptional value at under £1.

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Half-year profits growth from collectibles and stamps specialist Stanley Gibbons (LON:SGI) will take some licking, and that’s before the company’s new online marketplace is officially launched.

Adjusted profit before tax quadrupled to £5.3mln in the six months ended 30 September from £1.3mln the year before, while like-for-like profit before tax, excluding acquisitions, was £2.9mln, up 123% year-on-year.

Adjusted earnings per share rose 162% to 10.02p from 3.82p, paving the way for an increase in the interim dividend to 3.25p from 3p last year.

Sales climbed 58% to £27.1mln from £17.2mln the year before, with recent acquisitions accounting for the increase.

Net debt at the end of September stood at £3.3mln, compared to a positive cash balance the year before of £4.2mln, with the change largely due to the group increasing its inventory, which on an historic cost basis more than doubled in value to £50.7mln from £22.2mln.

“The quality of our stockholding at this time provides the backbone to delivering short term growth and the board look forward to the second half of the financial year with confidence,” said Martin Bralsford, chairman of Stanley Gibbons.

The company has been working hard and investing heavily in its online offering, with the new online marketplace (stanleygibbons.com) experiencing a “soft launch” this month, ahead of the scheduled “hard launch” in the first quarter of next year.

The acquisitive company said the integration of Baldwin’s has gone well, with the company moving to Stanley Gibbons’s retail flagship premises in the Strand in London’s West End.

Next step is to integrate recently acquired antique dealer, Mallett.

The company’s acquisition strategy, coupled with its investment in its online offering, should lead to extensive cross-selling opportunities and an uplift in sales in the second half of the financial year.

Peel Hunt said the launch of the Stanley Gibbons marketplace has the potential to transform the business.

“This is a huge market opportunity and provides real potential in lower-value stamps and coins as well as other collectibles.

"Stanley Gibbons’s brand name, credibility and relationships with trade partners give it a material advantage. The marketplace will continue to develop from the launch site, with significantly more product to be added, along with online access to the wealth of information Stanley Gibbons currently provides in hard cover,” said Peel Hunt’s Charles Hall.

Peel Hunt says it is far too early to have firm numbers on the prospects for the marketplace and it currently incorporates ongoing losses of £1.5mln per annum in our forecasts.

Meanwhile, the broker notes profits in the existing Stanley Gibbons business increased from £1.9mln to £3.7mln, excluding the investment in the Stanley Gibbons marketplace.

“This was helped by some sales from recent purchases of major collections. The cross-selling benefits from the acquisition of Noble are continuing to grow,” Hall observed.

“The shares are trading on a PE [price/earnings ratio] of 11.5x to March 2016E (the first full year with Malletts and the benefits of the Noble acquisition). We see this as providing a very attractive entry point. In addition, the valuation is backed by the value of the stock,” the broker said, as it reiterated its ‘buy’ recommendation and 400p target price.

Shares were little changed at 285p in mid-morning trade.

[jonwig] 10/10/2015 10:28

Pavey - I'm reading from their combined shareholding of about 650,000 shares. My point is not what they've invested but how many votes they can muster if a hostile bid appears. So I'm making no value judgements, and the fact that they've put in a lot of money is irrelevant to that argument.

The point about the institutional holdings is that it's sufficient if used en bloc to promote a bidder.

Incidentally, the BoD have a significant number of share options, all of which are under water (179p - 363p) though some do have nine years to run.

[pavey ark] 10/10/2015 09:33

jonwig,
RE: directors shareholding.
I'm not passing any judgement on their abilities but I think it should be pointed out that the directors have invested a considerable amount of hard cash in the company.
At the time of the share issue they took shares at 295p costing over £600k and have certainly made other purchases.

1.4% of current market cap is nowhere near the cash they've put in.

Again, I'm not making any comment on their abilities (good or bad).

On a broader theme, I notice that private investors seem to set great store by director's share purchases but I wonder if any director should ever buy shares in their company ?
If you depend on the company for your livelihood, pension etc I think you have enough risk tied up in the company no matter how well it is doing.
Nothing wrong with a good, well thought out and fair bonus scheme though.

[spob] 10/10/2015 08:57

China slowdown creates uncertain outlook for stamps and art


Naomi Rovnick

FT

9 October 2015


A profit warning this week from rare stamp and coin dealer Stanley Gibbons Group has raised concerns that alternative investments such as stamps and art, which have soared on the back of strong Chinese demand, could be licked by the emerging markets slowdown.

Stanley Gibbons, a beneficiary of the Chinese love of stamp collecting, told shareholders this week that its full-year earnings would be hit by “weakness̶1; in its Asian operations. Its shares slumped by nearly 30 per cent on Tuesday in response.

The group has also been forced to postpone the launch of an Asia-based stamp investment fund, following a sharp downturn and intense volatility in mainland Chinese stock markets.

Chinese demand for stamps, along with other luxury or alternative assets such as expensive Bordeaux wines, peaked in 2011, Stanley Gibbons’ investment director Keith Heddle explained.

That year, Stanley Gibbons was valuing the famous Chinese “monkey stamp” — a popular investment because it was produced in 1980 in a batch of 8m, appealing to the Chinese superstition that the number eight is lucky — at £200 apiece. Mr Heddle said he had seen them change hands for £3,000 at Chinese auction houses.

Today, however, that intense speculative interest has “deflated,R21; Mr Heddle said, although he insists underlying demand from Chinese philatelists and credible investors remains healthy.

In February this year, Mr Heddle said, a block of four extremely rare 1968 stamps that featured a propaganda message from Mao Zedong about the Japanese (which were never issued for political reasons) became the top selling Chinese stamps on record, fetching HK$8.9m (£712,000) at an auction in Hong Kong.

“Many of the stamps in our Chinese catalogue have appreciated by between 16 per cent and 20 per cent in the last year,” Mr Heddle added.

HK$8.9m - Auction price for block of four unissued 1968 Chinese stamps

While Stanley Gibbons has clearly been a victim of Chinese stock market volatility and the economic slowdown, however, the art world appears insulated from these trends for now, according to Clare McAndrew, an economist who studies art markets.

Chinese buyers accounted for 22 per cent of the money spent on art globally in 2014, according to the European Fine Art Foundation, which calculates the worldwide total at €51bn. It is hard to predict the art market, because a few major sales can skew annual transaction values, but Ms McAndrew expects Chinese buying to be around the same this year. “Auction houses tell me that their share of Chinese buyers is growing and they are buying at higher price points.”

As with stamps, Chinese interest in art is certainly less frenzied than in 2011. Buying of illiquid and hard-to-value assets has slowed in China following a clampdown on corruption and extravagant gift giving by the Communist Party leadership.

The art world was an indirect beneficiary of what the Chinese call “elegant bribery”, where a wealthy person would gift a painting to an official and then buy it back at an inflated price through an anonymous auction. That practice has become much more risky since Chinese president Xi Jinping began his anti-graft campaign in 2012.

But according to Ms McAndrew, while elegant bribery is less common in the Chinese art market, the nation’s wealthy elite are more interested in building their own art collections. She sees this trend in other emerging markets, from Brazil to India.

“The emerging market super rich are fairly insulated from economic conditions,” she said. “In such countries, the art market is driven by such a small circle of very wealthy people. Macroeconomics has an impact but I don’t see this driving an art slowdown.”

That would not surprise Maike Currie, associate investment director at Fidelity Worldwide Investment, who notes that while China’s economy has slowed, it has not crashed. The nation remains home to many truly rich people with an appetite to spend.

“While the Chinese economy might be in slowdown it is certainly not in a meltdown, and the story of the rising Chinese consumer and their appetite for luxury goods is not going away,” Ms Currie says. As China moves from an export and investment-led economy to one driven by domestic consumption, the rise of aspirational spending should only continue.”

Ms McAndrew is certain that the trend can boost the art world. “The Chinese market is not New York yet. It’s been at lower price points and mostly domestic,” she said. “But Chinese buyers are starting to buy Western art. Not at the cutting edge, but they are interested in the impressionists, for example”

Stanley Gibbons’ Mr Heddle sees a similar trend. “Our wealthier Chinese buyers who have got the domestic stamps they want are now thinking about Penny Blacks.”

[jonwig] 10/10/2015 08:52

Reading some recent posts, companies with "hidden value" - ie. market value of assets significantly higher than book value are often the target of bid rumours or even actual bids. normally I'd look for two things;

1) management failings, where the BoD doesn't hold many shares. This is the case here: they collectively hold about 1.4%. And,

2) a substantial institutional presence. In this case, six institutions hold over 32% of the equity.

The only missing thing for me is that, knowing nothing of the sector, I've no idea who might want to take them out. It's not Private Equity country. Maybe an overseas company? Chinese? Abergele's billionaire friend?

[shanklin] 10/10/2015 08:06

Interesting article. Rather a shame that SGI are not growing sales, let alone by the 16-20% mentioned.

[eastbourne1982] 09/10/2015 21:53

“Many of the stamps in our Chinese catalogue have appreciated by between 16 per cent and 20 per cent in the last year,” Mr Heddle added.

[abergele] 09/10/2015 08:55

TDW are selling to me at under 97p..so my take is there are buys in there today but showing red,distorting at a glance a persons idea of which way the trades are going..nothing unusual there then..
To a rich egotistic Billionaire, Asian or Far-eastern investor collector of stamps,with billions this looks cheap..and sell off the what they don't want??

[shanklin] 09/10/2015 08:47

Graham

I was not being facetious albeit I may have given that impression.

I was genuinely asking whether PH have a realistic reason for expecting SGI's sales performance to improve. Being extremely simplistic, there seem to be two obvious ways for SGI to up their profitability:
- turn over more stock even if margins are slightly weaker (as per your post)
- reduce overheads

As it is, the weakness of their sales mean earnings are increasingly being consumed by other costs.

So, as per my earlier post, given the sales trends in their business are in completely the other direction, why does PH expect matters to improve significantly?

Thoughts welcome. Cheers, Martin

[pavey ark] 09/10/2015 08:43

My point is not whither the PH figures are fair but simply that if IC is going to use them it is strange that they are quoted and then a "sell" recommendation is produced.
The driver for sales would appear to be the number of major auctions that are scheduled to take place.

[abergele] 09/10/2015 08:39

Graham,Eastbourne abd Pavey Ark,
very interesting reading...as a serious collector of stamps,I find this now too cheap not to miss...Gibbons is the bible to collectors of fine stamps,and some lower grades I feel they are selling off slowly,I may be right or wrong.

Some 20yrs back they were buying in only mint stamps,by the small trolley load I was told..I have bought from them in the past and will no doubt again.

I must admit the online site can be a shade confusing ,as I recently have tried to renew my online subscription for getting the magazine, prices,plus also access to my online albums a little ambiguous..they should use an easier format I feel.

[graham1ty] 09/10/2015 08:37

Shanklin, even if they have to discount a bit ( I've discount the usual mind boggling mark up) they could probably shift a fair amount of stock above cost. Simply to get some cash flow and wipe out the debt. As per my post above, "targeted price" ( yr quote) might be 100% markup. They might be willing now to sell much lower than that, and still make a turn. Would hit margins, but remove worries about any debt they have.

[shanklin] 09/10/2015 08:21

On what basis do PH think that SGI will suddenly increase its ability to sell its stock at its targeted sales prices?