Stanley Gibbons Share Discussion Threads

[jasdan] 04/5/2018 10:25

Whilst it was reasonable to expect a little fall out after the Phoenix deal went through, it is a shame to note that the current share price is in fact lower than BEFORE the Phoenix deal. How on earth can that be correct?

For Phoenix, apart from anything else, it is so far a lousy investment........

[jasdan] 04/5/2018 10:21

balgray - good post.

The amount of money SG have squandered over the years is unreal. I'm not sure how correct you are about the valuations of stock.
When I have quizzed senior staff about this, they have always told me that the stock levels on the balance sheet are not equal to catalogue values, but instead SG's considered selling prices. So, if a 1d black is catalogued at say £400 then the stock value in the balance sheet is not £400 but instead is the value SG have it on sale for in their premises. I was over at SG last week, and frankly one can pick up a reasonable 1d black there for £125 - 150 so those would be the values they are carrying the stock at on their balance sheet.

As regards the higher end stuff, this is a different market. I would question if many authentic buyers would quibble that much with SG's pricing for selling say a mint block of four 2d 1840 blues for say £50,000? If you are at that level in the hobby, you want to buy the best, and get stock that is guaranteed quality, and any such items are guaranteed by SG, which you cannot get elsewhere. On the other hand, as anyone can imagine, such things are not sold every day of the week, so you would expect very high value stock to be sitting around more than lower valued items.

[balgray] 04/5/2018 00:04

At present it’s not a question of stock availability.

Whether one is buying a 1000 or 10m of SG stock , it means hoping that they will somehow sort out their two very large but interrelated problems. They may have been temporarily obscured by the Guernsey mists, but they’re still there:
the first is the dismantling of the Chinese wall between their catalogue/publishing business and their sales division, the second a meaningful valuation (and sales plan) for their ridiculously overpriced top-end stock.

In 2012 SG threw away $1million to buy the US BidStart website to try and take on e-bay. They put what must have been virtually ALL their top-end GB stock onto the site, and priced it at their own full catalogue value. This included items priced into six figures. I did a summation of their offerings on the site at that time, coming up with a total of some £ 15 million. In 3 months of monitoring it they sold not one single item. The whole edifice collapsed in 2016. That ‘£ 15 million’ of stock is still shown on SG’s own website – still at full catalogue price - but what is it really worth? And how and to whom will they sell it? There are numerous highly experienced and respected dealers selling top-end GB stamps for HALF the SG catalogue price or less – and some perfectly good examples litter e-bay a much lower prices still. All the other major philatelic catalogue companies around the world – Michel , Scott, etc, hold some premium to ‘accepted trade values’ in their catalogues .. but SG is an cloud-cuckoo all of its own.

Sooner or later SG has to face the fact their catalogue prices and the selling prices for their stock have to be driven into sensible proportionality. Rewrite all the catalogues? Unlikely. Revalue the stock? Ah! What did the replacement auditors agree to put it on the books at? What really IS the company valuation? SG has to face up to, and find solutions to these problems. There is NO indication at present that they have this it hand. The accounts will not show what is happening – the management has to produce and support a revised policy first.

The experienced collectors who buy top-end items know where to go. And you don’t make much profit selling penny packets when your mint 1d blacks are stuck in the safe. THAT is perhaps the major reason why the shares are not moving up – and will not move up until there is a radical re-think. The paint, Jasdan, will doubtless dry and start peeling soon. Phoenix better have someone who can analyse and direct what is to happen, otherwise their shrinking asset will disappear. You’re right, Jasdan: ‘muted’ is not good enough. I, and most of the philatelic world I know, hope for the hobby's sake that it all comes good .we need SG...but the evidence is not there at present.

[jasdan] 20/4/2018 17:28

It's like watching paint dry on here at the moment.

So little volume, it is a shame SG are not coming out with some sort of direction on their full year results as I believe they are OK. Not running at a profit yet, but losses are down substantially to minimal levels and the company is likely to go into the black by September. Problem is that the full year results come out in September at the same time! So we will be half way into the 2018 trading year before they report on 2017's performance which was so overshadowed by everything else going on at SG.

What we need now is a set of accounts stating the clean version of things without the endless distractions of closing and accounting for Marketplace / Interiors / Guernsey etc.

I believe there is also not a lot of stock around - indeed almost 2m of shares have been bought over the last two weeks alone so we cannot be far off a proper bounce in the share price. Certainly the reaction so far to Phoenix's involvement can only be described as 'muted'.

[asiastampcollector] 08/4/2018 18:36

My own take on about SG share prices are.

The prices of this share will not gone up much from present level unless someone is willing to place a big buy say > 30 millions shares as the present major owner of the company own more than 58% of the shares at 2.5 Pence. I am fairly sure they are happy to sell at least 6% of the total shares (around 25 millions shares) at profit i.e > 2.5p.

Bearing this in mind I think most people will stay away from this share as the risks are far greater than the potential rewards.

[superiorshares] 08/4/2018 10:37

Jasdan.. and you said there would be no stock available to trade ?.. and any slight increases in buys , would rapidly send the share price higher ?.. looking at all those huge ( for this company ) buys . The share price should be about £10.11 by now .

[jasdan] 04/4/2018 11:19

Seem to be slowing building up to a new trading level. Lot of share purchases going through over the last few days, this looks very positive for the future.

[jasdan] 30/3/2018 21:02

SGI have in reality been fighting to survive since 2014. All the terrible business decisions from previous management had to be sorted out before the business could be considered to be turning round. Previous pricing of the share only accounted for it being near to the wall with enormous liabilities, without any pricing in of future prospects.

Now, with the Phoenix deal, liabilities are dealt with, and future prospects and expectations can be priced in again, so I thoroughly expect the price to rally considerably.

Those of you still pricing it on some basis at 4p etc need to ask: how would you have valued it instead in 2014 when the price was £3+? Exactly, that is the point - the current price is clearly an oversold price for a company that does not now have financial problems. On the other hand, £3+ was too high.

I guess in time we will see this settle somewhere in the middle perhaps, especially if they are able to pay off some / all of their £10m debt pile.

[jasdan] 30/3/2018 10:00

Do we really have any reason to doubt the current management? They have done an excellent job in cutting costs and in getting rid of the liabilities plaguing this company.

The next update is in October when the full year results are published.

[jasdan] 30/3/2018 09:52

Augustus, don’t you think that you are missing the point? Before Phoenix’s involvement I would agree that it was at the very least, difficult if not impossible to value SGI.
Now, you have to consider valuing it based upon future expectations instead. As the stock market typically values shares on a a future estimate based upon six to 12 months ahead - so that is why the price is now starting to rise.....

[augustusgloop] 29/3/2018 19:31

There is no way that anyone can value SGI on its present circumstances.

Shareholders have no way of determining if SGI has the ability to be profitable in its present form.

The management (if they are good) may be able to tell if their new business plan has a good chance of success.
But are the management any good -- we have yet to see.

[arthur_lame_stocks] 29/3/2018 18:47

Personally I can't see these ever being worth 20p again.

[dsct] 29/3/2018 18:04

jasdan,

"and under the soft terms of the Phoenix deal, they will even lend SGI £5m at no interest rate if required"
Can I ask where you've got that from ?

"followed by a move into the 10p - 18p range later on this year, followed hopefully by a push up into the 20p + area towards the end of the year after the full year results are issued."
Can you give your calculations, as I've done before, on how you get to this share price, as I can't see that being at all feasible this year. The year end is only TWO days away ! How much do you imagine these Y/E figures would have improved to even get to a 10p share price ?

I envisage there still being a trading loss, a loss before tax, a loss on basic earning per share, no dividend, an increase in debt/debtors. Overall, not an ideal set of full year figures by any stretch of the imagination ! lol

[jasdan] 29/3/2018 11:16

I'd also point out that what everyone seems to be missing is that back in 2014 when the price was £3+, how different really was that entity compared to now? The market valued it at that price because of earnings expectations which in turn led to valuation expectations. The current price of SGI still is less than the price that was paid for Baldwins etc, so I cannot see how it can yet be a correct valuation for the entire group. That is not to say that SGI overpaid or not for Baldwins and Murray Payne, for example, but these entities do have a value.

Now that all the liabilities are gone, and let's face it, there were loads of them, things must improve sharply. Marketplace, Interiors, Guernsey, etc, were all enormous drags on the share price for obvious reasons. They are all gone, liabilities are accounted for, and it looks to me like SG is moving back into the black.

It's true there is still a £10m debt level but that is not needing to be repaid for five years, and under the soft terms of the Phoenix deal, they will even lend SGI £5m at no interest rate if required, which should mean even the compound interest in five years time is not such an issue. I would imagine SGI will make attempts to lower its debt in the meantime, but the future now looks a lot more rosy for shareholders than it did before.

The only question is how long it will now take the market to wake up and see what is happening here, but early signs of buying already look positive to me. I guess we will see the stock moving up to one pricing layer at a time, my own guess is that 7p - 9p level is on the horizon, followed by a move into the 10p - 18p range later on this year, followed hopefully by a push up into the 20p + area towards the end of the year after the full year results are issued. Those who are critical of this should remember that it is much easier for a share to increase in price the higher it goes up - for example, if the price is 4p, then going up to 5p is normally a big deal. It is a lot less of a deal for the same share price to go from say 20p to 21p.

[jasdan] 29/3/2018 11:05

I think all of you have to stop looking at the company as it was. Up to the day before the recent Phoenix announcement, it did look to many like a busted flush, and there was a lot of uncertainty about whether the banking facility would be renewed, and how SG would be able to cope with its debt levels of £17m.

Now, since Phoenix have become involved, the equivalent of a rocket has been put up SGI, and clearly then this should lead to a revaluation of the shares.

I accept that this takes time, and in SGI's case, longer than normal as it had dropped off most analysts radars as it was no longer investment grade once it was in default of its banking covenants.

However, what everyone on here should now factor in is that there is no longer any point valuing it as it used to be valued in say February when a 3p - 5p value would have been in order; but instead, like other shares, it should now be valued on [rational] expectations of future growth and value.

As I pointed out before, when it was trading over £3 it actually was not a lot different operationally to how it is now, yet the market found it possible to value it at that price. At the opposite end, the market equally found it possible to value it at 3p. They were both right at their times, but now the future of SGI is assured again, the value should rise up to a more reasonable level again.

[asiastampcollector] 28/3/2018 19:36

Just like to give a different angle on the share prices of Stanley Gibbons.

Someone in this forum suggest SG share prices could be worth around 20p. As this would value the company at more than 80 millions. For this to come true SG will need to make a net profit of around 5-6 millions per year. Are you serious?

As someone who spends the last 35 years keeping an eye on Chinese and Asia stamps as investment. I like to think I know a thing or two about the Asia stamp markets (China, Hong Kong Macau). I think SG would struggle to sell their China/Hong Kong stock at more than 40% of their list price. So I highly doubt SG actually worth anything after their net debt. So their share values of 3-5 p range right now is about right IMHO.

[dsct] 28/3/2018 18:34

augustusgloop,

I thought the same, so have just had a quick check on the takeover regulations, and that appears to be correct. If Phoenix were to make an offer for SGI, they would need to bid 2.5p minimum per share for the remainder.

I'm hoping their 2.5p/share investment means this is the base level now, so we shouldn't drop below this, under normal circumstances.

Using the same simple calculations as in my post 3510, for the share price to reach jasden's 20p level, the turnover would need to increase to nearly £120m which is quite a jump from last years £42m.

[augustusgloop] 28/3/2018 17:34

Pheonix have to pay the highest price that THEY paid - not what someone else may have paid.

As far as I am aware they bought all their shares for 2.5p

[superiorshares] 28/3/2018 17:15

Jasdan .. my problem with these large purchases ( for this stock they are very large ) is they are not going through at a premium to the offer price . also the two RNS. The director is the phoenix man and Lombard have reduced from 29 to 12 per cent . I think I have read that correct ?.. I have dipped my toe in by the way , basically because im a philatelist. Your ultra positivity and stock at over 20p ?... your still in cuckoo land !. Regards brother.
Ps Phoenix could buy up shares as and when they are available and just pay the market price at the time . No need to make an all out offer.

[jasdan] 28/3/2018 14:44

Superior, if Phoenix want to buy out the rest of the stock, then under AIM rules they would have to pay at least the highest price over the last year for the remaining shares, and that is 14.5p a share. Whilst that would be an excellent return on what I've paid for my shares, frankly, now Phoenix are behind SG I am expecting the shares to go materially higher than that in due course.

It is clearly taking a while for many to wake up to what a transformational deal this was, but it looks like the penny is in the course of dropping as there are now regular large purchases going through.

I would not be surprised to see the stock trading over 20p later on in the year once some analysts start covering the stock again.

[pre] 28/3/2018 09:05

RNS out..Director of the Company, purchases 705,741 shares...nice vote of confidence imo:-)

[buywell3] 28/3/2018 07:03

so in essence augustusgloop are you saying you would not touch this with a barge pole ?