Stanley Gibbons Share Discussion Threads

[twixy] 10/12/2021 11:25

Agreed; your final point,n, is the most positive aspect. This far into H2, no CEO worth their salt will make such a bold statement, unless they know it's very deliverable.

[jasdan] 10/12/2021 11:21

So, in summation Clock, I believe that this is very much a company re-positioning now to trading on a cash positive basis, which in turn will lead to a reduction in debt. That is when the equity will start increasing sharply.
It is at Phoenix's discretion whether to speed this up by waiving some of the debt for example, but I can see that they don't need to do this given their long term position.
SG's turnover is now increasing across a range of areas, this will lead to a profitable position and then the repayment of debt.
From Phoenix's position, some of this was realised when they came in to rescue SG years ago, what made the deal so attractive for them was that they only had to pay £19.45m at the time for 58% of the equity. SG should be a £100m+ company once it is trading profitably so the majority share was bought at the sort of discount that is rarely available for such luxury brands.
Just give it time and build up your stake when the price is at these low levels - I cannot see it remaining so low as SG moves into a cash positive position.
I am now often buying more shares - if others want to sell because they can't stay in until next year, then that is their concern but you will note that whenever the shares get this low there are always buyers snapping up largish amounts.

[jasdan] 10/12/2021 11:11

In fairness, there are also negatives, constantly referred to by some on here:
a. the level of debt - £16m
b. that the company is being kept alive by Phoenix.
c. that the company will fail to meet its financial covenants in March 2022

What is perhaps not appreciated is the scale of Phoenix's role here. When Phoenix came in a few years ago, they paid £19.45m for 58% of the equity of SG. If they had not come in, I have no doubt SG would have collapsed, so Phoenix's involvement can only be viewed positively.
Phoenix's involvement included not only controlling the equity, but also the debt, and they became the company banker in place of RBS, and have supplied the company with liquidity since then. The point is that SG was in a very distressed state back then and COVID has not helped it recover. The overall recovery is therefore taking longer than planned when Phoenix first came in. I would say that Phoenix's total involvement in SG probably comes to around £40m plus so it is considerable.
In many ways, for shareholders, this is a positive slant as Phoenix are not going to want to walk away from such a large investment. Therefore I think it reasonable to assume the March 2022 covenant test will be irrelevant - Phoenix will merely waive it at the time, they have no choice otherwise they lose their equity.
Given the current financial position and all the various moving parts, especially Showpiece which could be a considerable earner for the company once they start issuing other items to buy fractions in; it is very much a moving picture. However, for the CEO to already state publicly that he's aiming for the company to be a sustainably cash positive business within the next six months implies to me that at that stage, they will then start addressing the debt.
Phoenix could easily deal with this right now, but they have the luxury of being the group banker and equity holder. So it is better to let the company trade through, if possible. To suddenly boost the equity value, they could waive some or all of the £16m debt pile, increase SG's shareholding in Showpiece, and so on.

[jasdan] 10/12/2021 10:53

Clock, my apologies for not responding sooner but the day job is taking up all my time lately and have not had a lot of time to look at things.
Actually I did not think the results were that bad. With Mallets being put into administration and the costs of the 1c stamp, this was never going to be a profitable first half, and reflected costs hung over from the pandemic.
What seems to me to now be happening is that Phoenix are repositioning SG to make it a more investable profitable part of the operation. Bear in mind it is a key part of the Castelnau investment portfolio as well now. This takes time and can be delayed by COVID. However there were a number of positives coming through:
a. sales are up 8% to £4.81m for the period (2020: £4.46m)
b. there was an "impressive 34% increase in Philatelic sales".
c. This has contributed to a decreased total loss for the period of £0.43m (2020: £2.22m).
d. Cash at the end of the period was £1.4m (2020: £2.5m) with an additional £1.00m remaining under the loan facility with Phoenix.
e. The market for stamps and coins remained strong, particularly so for rarer items where SG's specialists add significant value, and they continue to see a growing interest from returning and new collectors.
f. the successful relaunch of Baldwins which was frankly almost forgotten about before, and now there's a number of leading auctions due.
g. the new Showpiece initiative
h. the ongoing publicity from owning the 1c.
i. an increased focus on auctions more generally - they seem to generally be sell-outs from what I have seen so this can only be good news.
j. Mallett entering Chapter 11 in September, this is ringfenced for the group and cuts off what has been a serious draining of funds at last.
k. the continued support of Phoenix
l. "The Group's forecasts shows that it will remain within current loan facility limits for the foreseeable future."
m. counsel agrees there are good prospects of successfully defending the Guernsey claim.
n. The most important of all: "For the first time in many years, we aim to become a sustainably cash positive business within the next six months."

[creme de menthe] 10/12/2021 10:14

I was completely underwhelmed by the interims. On a positive note, philatelic sales are up which is the big profit area, but dissapointingly continuing losses, a low borrowing headroom, massive uncertainly concerning Malletts and an alarming comment that there is a risk to SGI as a going concern.

SGI is still in survival mode with substantial debts. Malletts could tip them over the edge or at least go cap in hand to the shareholders again. This is a survival stock not a recovery stock. I might be tempted if they can turn a sustainable profit next year and start paying some debt with the Chapter 11 resolved.

[clocktower] 10/12/2021 07:55

Have you no comments about the accounts jasdan?

Not what one was hoping for and not many positives to highlight, so where do we go from here.

[superiorshares] 06/12/2021 07:48

im still buying stamps and I am 100 per cent happy that I wont loose money over a ten year period.
I also buy shares , I dont have the same optimism in those.

[creme de menthe] 02/12/2021 17:42

Still no results.
I would change broker if I were you.....

[jasdan] 01/12/2021 14:01

According to my broker, SG's interim results will be out tomorrow. I guess all will be revealed then.

It's interesting how little trading there is in advance of the results, this is a feature of SG over the years - clearly internally very few persons must know what is about to be issued.....

Let's hope it is good news for shareholders at last, and that we have some good optimistic news for a change. It would be about time.

Recently I have noticed a different approach at SG, and I think there is now proper work taking place to make the case for SG being an investment grade proposition again - i.e. there are management attempts to show that this company is worth investing in. As to when the share price reacts is a mute point, let's hope it rises sharply soon.

[twixy] 01/12/2021 11:35

Your third paragraph- what utter drivel.

[magpie52] 01/12/2021 11:05

They've sold 143 fractions since 23 November, as there's 29688 available just now. So that's about 18 per day, and the rate is decreasing. But at this rate they'll sell them all in about 4 1/2 years. It will be interesting to see what happens when the sales portal is open.

No wonder the interim report is delayed....

[ternian] 01/12/2021 09:37

Showpiece/SG/Phoenix botched this big time.

Firstly, the philatelic market is not interested in investments. Indeed Victoria Lajer recently commented that the uptake by their own existing clients was minimal. Big red flag. The 1980's is one of the major reason due to the great stamp bust, and SG continual failure at trying to turn stamps into investments.

Secondly, the NFT/Token/Crypto market has no idea about the philatelic market. They think any stamp is worth gazillions, not understanding its the crypto backed NFTs that are driving the demand.

Saying that, Crypto Stamps issued by postal authorities are breaking the barrier. The first Swiss Crypto Stamp had such huge demand, their website crashed. UAE also just released their first Crypto Stamp and was sold out immediately.

Meanwhile, SG gets excited with 1 person buy a share. lol

[ijamlon] 30/11/2021 06:51

As someone who has bought both the stock and the stamp fractions, I have to admit they have fluffed the Magenta project. It was not a bad idea but should have been executed differently and better. Not quite sure how the secondary market for the fractions is going to work when so few have been sold in the primary one. I don't necessarily agree that stamp collecting and investing are unmixable. Different types of owners happily coexist in coins, books, art, cars etc etc. The biggest error was not to go the NFT route, but maybe the management team just aren't up to it.

[ternian] 29/11/2021 21:20

SG have stated they will most likely sell the 1c Magenta in 10-20 years. Bwahaha - the company will likely be wound up by then. SG also waffles on about it hasn't appealed to their stamp collecting database at all - the biggest red flag ever. Meanwhile, after 3 weeks, Showpiece has only sold a whopping 14% of all shares. Another investment flop and the reason why anyone who tries to tie investing and stamps together should be avoided.

[jasdan] 28/11/2021 13:41

At least everyone’s got more time to collect stamps now

[superiorshares] 28/11/2021 13:37

Looking like the Usual .. Late results - dire results .

Plus a forgotten about Pandemic that`s RAGING !

[jasdan] 26/11/2021 11:29

No RNS today from the looks of things. If I was them I'd wait for more fraction sales and issue the update in early December. There's no actual requirement to issue an RNS in November, clearly if the delay gets too long, then that is different, but many companies are late in reporting their results.

[magpie52] 26/11/2021 11:05

To be fair, they're not doing very much worse than other shares, today

[deniro33] 26/11/2021 04:31

The City's taking a dim view of this share is nothing unusual... Perhaps a better luck next year then...

[creme de menthe] 25/11/2021 23:37

Interims were due today according to SG website. The delay is obviously hitting the share price. The City takes a dim view of unannounced delays. I expect the figures, when released, will be woeful.

[deniro33] 25/11/2021 16:46

At least *

[deniro33] 25/11/2021 16:45

And I don’t expect them to be too bad at all because it just may have also a negative effect on the Stamp pieces buying … at last to a degree.

[deniro33] 25/11/2021 16:21

Tomorrow as per Morningstar…..

[jasdan] 25/11/2021 15:01

Does anyone know when the half yearly results are due to be out? I thought they were due in late November?

[ternian] 24/11/2021 06:13

Foot-traffic doesn't equal sales. The £75 vouchers are all lost profit for a struggling company. Either way, two people per day are buying these fractions...so it will be a good 3-6 years before they sell them all. lol

Jasdan is still in lala land - they haven't sold 59,000 fractions. SG did not buy 39,200...