Stanley Gibbons Share Discussion Threads

[battlebus2] 13/11/2015 21:55

After years of investing in NBL it's a pity they're part of the problems here, great management and operation.

[knowledgeablestampman] 13/11/2015 20:34

I wonder what percentage of sales are made to philatelists who may or may not be up to speed with true current market (auction) prices, as opposed to investors who simply put their trust in Stanley Gibbons and have no idea on price at all other then the Gibbons catalogue which is after all simply their own manipulated price list?

[hywel] 13/11/2015 11:25

I see what you're saying jadeticl but Noble were doing well when SG bought them, in fact were growing profits quicker than SG. Not so sure Mallett was a good buy tho.

[jadeticl3] 13/11/2015 10:08

Are there grounds for the quote "The lesson that history teaches us is that history teaches us nothing"?

When Flying Flowers bought all kinds of businesses with a common thread of postal sales, they bought Stanley Gibbon, thus they linked selling bunches of flowers with selling stamps! It did not work.

Fortunately they spun off Stanley Gibbon, realising that this business needed expertise and focus. This worked and the business prospered.

Then the prospering Stanley Gibbon business again decided that auctioning stamps must be the same as auctioning anything else, ( a slight exaggeration), so they bought other types of businesses and in the words of their chairman they lost focus. Flying Flowers became Flying Brands then went bust. Maybe we need to spin off the stamp business of Stanley Gibbon, restore focus, and maybe regain prosperity.

[njb67] 13/11/2015 09:58

While a relatively crude measure the profit margin has fallen from 14% in 2012, 9% in 2013, 4% in 2014 and 6% last year. It will be interesting to see what they can achieve in the full year given the first half operating performance.

Worth also noting that the reported 400k profit would have been a £1.5m loss if it were not for a one-off legal settlement of £1.9m from their former pension advisers.

[pavey ark] 13/11/2015 09:48

Good point Eastbourne.
Just had a look at the results and if you strip out the £39m of intangibles (which is usually best) you get a fairly solid £43m against a current market cap of £46m.
With sales of over £50m a year (albeit not all from stock as Eastbourne points out)it is hard to see the financial picture of loans/debt not improving as the stock is reduced.
It should also be pointed out that the company made a profit ,not very much but a profit and the question now for investors is (as ever)whither they consider that the current price represents good value.

NB: this is before the Paul Scott blog (10.48 am)

[eastbourne1982] 13/11/2015 09:46

Looking at the trades thus far today there don't appear to be many sellers, mainly buyers yet the price is down nearly 10%. The majority of people who were going to sell surely have done so previously, there is so much potential upside from these levels, all we need is a slight trading improvement during the next period, with auctions and sales weighted to the next few months the signs are reasonably promising.

A hefty director buy wouldn't do any harm either.

[njb67] 13/11/2015 09:33

Eastbourne - fair point

[eastbourne1982] 13/11/2015 09:23

People seem to ignore the fact SGI make a fair bit of money from the sale of stock they don't own.

[battlebus2] 13/11/2015 09:15

Surely most of the stock they hold appreciates over time , is that not the nature of the business.

[evil_doctor_facilier] 13/11/2015 09:11

i respect your opinion NJB, i am not in possession of enough facts to comment on the management. However, i personally hold the opinion that valuing a world famous brand and business on just stock held seems harsh and the room for appreciation in the share price would over the medium term seem more likely than further falls.

[eastbourne1982] 13/11/2015 09:08

This was all expected, I'm sitting tight on a paper loss of around 15%, if they can show a few signs that they are turning it around over the next few months the share price will be over £1.50 again.

[njb67] 13/11/2015 09:07

Edf

I am bearish on this stock, I will not repeat what I have posted previously.

I think there is a potentially good business here, but, and it is the big but, the current management do not know how to run it in a way that creates shareholder value.

I remain a watch here in the event that a new management come in who understand how to leverage what remains (for the time being) of a strong brand.

[evil_doctor_facilier] 13/11/2015 09:02

It ( the stock) is valued at the price actually paid and not at commercial value?
What i was actually pointing out to clocktower is that very fact.
If SGI used aggressive accounting like say glencore then their stock would be valued at 150 mill on the balance sheet and not 58 mill
The point being that the stock hardly needs to be devalued does it now?

You're also assuming that sales will stay flat for the next 12 years, that is a possibility obviously , however the flip side of the coin they could easily growth them substantially.

How much is the name worth? Like wise, how much is the business worth?
Well i believe it's worth materially more than just existing stock held at this time and for that reason this looks very cheap.

aimho,

[stevenlondon3] 13/11/2015 09:01

The £150m is an unreliable figure. If the stock was worth that then why were there not more sales in the first half?

[njb67] 13/11/2015 08:55

Lets assume the valuation is correct at circa £150m. Lets also assume that sales do not slow and/or prices at SGI (rather than globally) come under pressure due to the fact that buyers know the company is struggling and use this leverage to seek discounts..

It will take 12 years to sell the stock at the current run rate. You can not value stock that will be sold in 12 years time at todays retail value. You need to discount it, this is standard business practice.

If you discount at just 3% per annum, the net present value of the stock falls from £150m to £127m. At 5%, it falls to £114m

[evil_doctor_facilier] 13/11/2015 08:47

I believe it's generally accepted as the norm that the use of quotation marks are employed to actually quote the actual words and not used to just add in your own!

[evil_doctor_facilier] 13/11/2015 08:35

Pleased do give me 'many more reasons' because the one you give above is totally ridiculous.
Are you seriously suggesting that because sgi sales are flat then all of a sudden the world stamp market grinds to a halt and goes down 70% in value in 6 months?
That proposition is laughable!

Why are internet sales up 25% if everyone is 'waiting'?

[clocktower] 13/11/2015 08:32

Edf, When your customers are aware that you are overstocked they wait for the opportune time to buy and wait and wait until they believe they have struck a deal that will show them a return. Now this is out in the public market sales are likely to slow imo. I could give many more reasons.

[tell it as it is] 13/11/2015 08:31

This is now a good recovery play unless they need another profit warning before March in which case management would be the immediate casualty

[evil_doctor_facilier] 13/11/2015 08:27

De value the stock?????
Why would they do that when the retail price of the stock held is 150 mll and they have it booked at 58 million on the balance sheet.(The price they paid for it)
Are you aware of a near 70% fall in the price of stamps in the last 6 months clocktower? I am not!

Please explain to me why you think the stock will or even needs to be written down,if anything its totally the other way around.
If they valued stocks at a 'fair market price' of just 50% of retail value it would push up the nav to over 120p per share.

[clocktower] 13/11/2015 08:19

Hardly the kitchen sink job as they have failed to de-value the stock.The outlook might just be as rosy a picture as they now admit they painted before.