Stanley Gibbons Share Discussion Threads

[clocktower] 17/6/2016 16:37

That stock figure may well have been reduced over the past months and I expect continues to be. the result of the reductions will become clear very soon, and may result in a rapid upgrade.

[ltcm1] 17/6/2016 15:14

Autographs, historical documents and related memorabilia 4,946

Seriously??? They must be holding the Magna Carta. £5m!!!

[ltcm1] 17/6/2016 15:03

brando69 I don't know the stamp world, didn't realise SG have been holding stock for decades. However it doesn't explain why they have let the stock get so out of proportion to their profits, it was a very highly leveraged play. Surely they could get by with a £10m stock at tops???

The other businesses are more straightforward to value but the elephant in the room is clearly SG itself - what would you value SG at including the stamps were a buyer to bid today???

[waldof] 17/6/2016 14:38

Somebody should get in touch with poor old Bill Gross - i am sure you know the name, founder of PIMCO, the worlds largest bond traders - and let him know the $50 - $100m he has invested in stamps has now gone down the toilet.
Its cyclical.

[hugepants] 17/6/2016 14:29

"With SG itself I think the issue is not the stamp market but the fact they have all this bloody stock and are effectively a retailer. I mean you don't see Christies holding £1BN of paintings do you??? How on earth have they got themselves into this position??? It beggars belief."

Agree completely. It was the indebtedness that caused the price to collapse from £1. And looks like they used this to buy stamps! And Mallet of course. Completely off their collective trollies. However I think the company is very good value at this price. There's a huge write-down (very unlikely) in the value of the inventory factored into the current share price IMO.

[brando69] 17/6/2016 14:25

you miss the point,

SG have essentially been market makers for the stamp collecting world for decades. after all they produce the catalogue that says, in theory, what a stamp is worth.

by holding loads of stock they hope to prop up value. the alternative is flood the market and prompt a further slump in actual prices.... or they could just burn it i suppose

[ltcm1] 17/6/2016 14:19

Prop_Joe I am confident Baldwins, Dreweatts and Bloomsbury would find ready buyers. With the latter two its not so much the name as the infrastructure that has the value. It takes a lot of money to start a quality auction room from scratch and there is a time factor too. Dreweatts had good rooms in Godalming and just outside Newbury, I presume they are still there. I read the Bristol room was sold, which is a shame. But they still have a foothold in two good areas. I am sure Dreweatts good name would be a good asset as far as getting probate stuff in. Both will always make money but in the auction world below the big two there is always an upper limit of profitability unless you get very lucky. But its an attractive business because the downside is limited and it doesn't require much capital.

Baldwins and SG would IMO have a good brand premium on top of the infrastructure as they are both top players at what they do.

With SG itself I think the issue is not the stamp market but the fact they have all this bloody stock and are effectively a retailer. I mean you don't see Christies holding £1BN of paintings do you??? How on earth have they got themselves into this position??? It beggars belief. I would have thought they should exit retailing and just be an auctioneer and accept profits will be a lot less. It seems like the big profits of the last few years have come at a cost as they are now stuck with all this stock.

[waldof] 17/6/2016 14:07

I cannot help wondering why Henderson Global were aggressive buyers of 29% so soon after a placing at 10p.

Of course fund managers are frequently wrong, but 29%, thats a serious call / gamble from a serious fund manager.

[brando69] 17/6/2016 13:55

your tulip analogy is a bit misguided

interest in the past will always endure; particular aspects of the past come in and out of fashion.

and victorian stamps of good quality will not get more common over the years.


for example. a QV Bahamas £1 denominated, mint never hinged definitive, such as the one I have will always be worth over £100 quid.

[2magpies] 17/6/2016 13:53

brando

IMO this one won't return.

Tulip bulbs haven't come back.... yet!

Would it be better to swap stamps for £50 notes?

[brando69] 17/6/2016 13:40

i have a collection, of British and Commonwealth QV stamps... by no means shabby... but I don't get the impression their value is soaring. Might come around again of course. These things are cyclical... and it's not as if they are going to get less rare over time.

[2magpies] 17/6/2016 13:38

Why aren't the Europeans/Americans/Australians buying?

Stamp prices have collapsed.

No new buyers.

Too late to ramp these, gb!!!

[gbh2] 17/6/2016 13:07

Both the Chinese & S Korean genuine collectors are interested in valuable stamps, regardless of country.

[brando69] 17/6/2016 12:59

interest in asia is waning compared to what it was a few years back...

or at least it is now much more selective

chinese are generally interested in chinese stamps.

[gbh2] 17/6/2016 12:34

The operative word being "IF" and we only have a myopic view on this thread that disregards the new interest in Stamps that's been developing in Asia during the past decade.

[brando69] 17/6/2016 11:30

stanley gibbons as a brand/name has cachet... but only as a purveyor of stamps. so if the bottom of the stamp market is falling out, then a reputation, however august and long established, ain't worth jack

[prop_joe] 17/6/2016 11:28

Interesting post Itcm1. From your experience of working in an auction house I wonder what your views are regarding whether the name/brand recognition factor of an auction house has much value? SGI contains some long established brand names not least SG - I wonder if a bidder would place much value on them?
Regards

[ltcm1] 17/6/2016 11:18

From what I've read in the accounts there seems to be a managerial expense of about £3.5m per annum. They talk a lot about 'group savings' by combining all these different businesses but where are these savings going to come from? I've worked in an auction house and they have very little in the way of expenses you could save on. The back office costs are not that big in the first place, the major costs are the premises and valuers.

They talk about cross selling to their stamp collecting customer base but if you take Dreweatts and Bloomsbury they are auction houses and about 80% of their business by £ volume will be to the trade. So cross selling will have no impact on Dreweatts or Bloomsbury's bottom line. The whole key to auction house success is getting the goods in, if you have the right matieral it will always do well. The key to it is having good valuers who have a lot of contacts in the business.

Auction houses make good money when they are run by valuers, this is the preferred model for the smaller houses.

It is clear to me the cost saving and cross selling stratagies are corporate horse manure.

[ltcm1] 17/6/2016 09:04

Does anyone have a better idea than a disposal of all non stamp activities followed by a sale of SG???

[gbh2] 16/6/2016 09:55

BOD salaries, bonuses, pensions & share grabs must be the biggest current drain on funds imo.

[ltcm1] 16/6/2016 09:44

2magpies you are right in the sense that the collector who might buy three stamps a week and spend £30 is in sharp decline. However like all asset classes under QE, big money stamps have done well over the last decade.

I think the problem is not the market itself but that the huge % profits SG were making on turnover are unsustainable as eventually they will run out of punters or 'investors' as they curiously call them.

To me it looks like the SG well has run dry and they are stuck with this huge inventory. But that doesn't mean SG is dead. Infact selling off the stock could reinvigorate the market and a new, more honest SG could emerge.

If say SG is no longer making money when the accounts come out, it will be clear how much all the IT and management spend is harming the profits of the group.

Another problem is Mallets. Might be a huge writedown there I reckon.

[dlku] 16/6/2016 09:40

cash burn daily

[2magpies] 16/6/2016 09:37

They should have auctioned-off all their stock years ago (at peak prices), and distributed the funds to shareholders, and called it a day.

As for the Far East, it was ludicrous to even try selling stamps to that demographic.

Chinese/Singaporeans et al, are not stupid. Why would they buy when they could see that the established markets (UK/Europe/North America/Australia) were not interested. They must have seen it as 'the same snake oil, different village'.

The Chinese were determined not to be the next village idiots.

The Chinese were only interested in the, effective, re-patriation of ancient Chinese treasures/artefacts. Thus, they bought back vases etc, which had been taken far too cheaply centuries ago by Westerners.

If they did buy stamps, it would more likely than not, be Chinese stamps, that's all.

Other than for sentimental reasons, it amazes me that people are still holding onto their collections, instead of selling whilst they still can.

They probably have their reason, or it may simply be hope mixed with inertia.

[prop_joe] 16/6/2016 09:35

I'm not a stamp collector but went into SG's store in The Strand a while ago. A stamp collector enquired about selling his collection but the SG staff said they were only interested in buying anything that was particularly rare/unusual.

This made sense to me: I collect signed books. I could buy them all day on the internet from the likes of ebay for not much money. But if I wanted to buy a truly rare book (the ones serious collectors are after) you are talking completely different money and anything on ebay claiming to be a genuine copy should be treated with extreme caution.

[clocktower] 16/6/2016 09:27

2m "Philately party is over, methinks." I doubt there has been a real party yet as Joe Blog never had an invite but might well be about to start with invites being given to one and all, as it is likely imo to become not only fashionable but viewed as a safe secure long term investment. Remember the crash in house prices, well just look at them now. You cannot print more old stamps or mint more old coins.