Stanley Gibbons Share Discussion Threads

[penpont] 21/5/2004 12:04

Reviewed in company results section of IC today wiht some comment on possible special divi payment:

21 May 2004

STANLEY GIBBONS (SGI)
The rapid rise in Stanley Gibbons' (SG) share price over the past 12 months recognises not only its much-improved trading performance, but also its hidden assets and cash-generation. On the back of a small rise in sales, 2003 profits benefited from a £378,000 drop in administration expenses, while the retail value of its stamp and autograph stock is probably four times the end-2003 book value (around £4m).

When SG demerged from Flying Flowers (now Flying Brands) in late 2000, it inherited a stake in a US internet flower business with a book value of £223,000. That business went public on Nasdaq last December and the current value of SG's stake is more than £2m - it can be sold next month. So, with bank balances rising, what is SG going to do with its cash?

One option is to buy in large UK and British Empire stamp collections - SG's speciality - which many other stamp dealers cannot afford. It also needs to increase its number of clients, which seems stuck around the 100,000 mark. One way to do that is to emphasise the non-equity capital growth attractions of stamp portfolios. Another way - in the medium term, at least - is to set up agency agreements in, for example, India (SG already employs the leading Indian States stamp expert) and China (for Hong Kong stamps). The other options are a share buy-back or dividends.

The dividend route is not easy because SG is technically Jersey-registered and direct dividend payouts would, at the moment, incur a 20 per cent Jersey tax. So SG has set up an intermediate company in Guernsey (with a nil-dividend tax regime) to pay dividends to the Jersey company, which can then pay them gross to UK shareholders - because of a double taxation agreement between Jersey and Guernsey. Broker Seymour Pierce forecasts 2004 sales of £9.5m, profits of £1.86m and a 1.5p dividend.

[don carter] 19/5/2004 13:59

CT:
Agreed. Well, the retracement from the March high of 89p was 23 pence, so results and cashback meeting expectations could well mean a next new high of 112p. According to some retracement gurus....
Don

[clocktower] 19/5/2004 13:32

The bounce is overdue..question is how high this time.

[xdavid] 19/5/2004 11:35

I wondered what that 300,000 trade was last week... been waiting for an announcement since.

So MSSL disposed of 200,000 on Thursday 8th April and aquired 300,000 on Friday 14th May, 5 weeks later... Price was around the same on both days looking at the charts...

Aaah, the mysteries of the markets...

[popgun] 19/5/2004 11:23

19.5.04 -- The Company was informed yesterday that on 14 May 2004 Morgan Stanley Securities Limited (MSSL) acquired an interest in Stanley Gibbons Ordinary shares that resulted in MSSL increasing its holding to 1,080,000 shares, representing approximately 4.43 per cent. of the issued share capital of the Company.

[sundance 13] 17/5/2004 14:11

Hi xdavid,

Well I'm hoping to be back in by the middle of June, so hopefully I won't miss out on any of the juicy momentum drivers, but will miss out on the short term pain over the next few weeks. My strategy at present is portfolio protection which unfortunately means shelving some of the quality stocks like SGI, as well as the more speculative ones. I now only hold 3 shares (FWY, HNR and PMO), two of which you'll note are oil shares, reflecting my bearish view on the markets, but bullish view on E&P stocks.

Yes the strategy is risky, however on balance I think the probability of SGI being lower in 3 weeks time is far greater than it being higher. My sub 50p target price is not set in stone, I will make a judgement call a few weeks from now based on how the markets are looking, so may settle for a higher price than this.

Cheers

Dan

[xdavid] 17/5/2004 13:43

I hear what you say sundance. I actually sold my Litho Supplies (LTS) this morning for same reason - It's a good medium term stock but it could slide quite a bit until it's earnings recover. Your strategy may be right in general market terms!

However, I see SGI as having too many short term momentum drivers for me to risk being out of it. Interims are due 30th July and if they go according to pattern, will be better than forecast. Meanwhile, will there be any announcements prior to the 6 week close period? Trading in PRVD could take place as early as 14th June, which just happens to be 7 weeks before results... coincidence? Plus, the current level is perfect for share buybacks (even I wouldn't complain at these levels).

All-in-all, I have seen how quick SGI can move up (honest, it doesn't just go down!) so prefer to sit with it "in the bank".

[sundance 13] 17/5/2004 13:10

Sold my stake today. Nothing specifically wrong with SGI, but think this market slide is set to continue for some time yet, with small caps as usual leading the way lower.

Will look to buy back in at sub 50p. Good luck to those of you that hold.

[xdavid] 17/5/2004 13:10

mmm... Advfn's intraday chart (I cannot get streaming prices) shows a 25,000 buy which prompted me to buy (5000). This is followed by a 50,000 buy. However, Comdirect are not showing the 25,000 ? But they are showing a 7,500 buy at 12.10 which Advfn do not show...

These things confuse me...

I noticed that AIM stocks in general seem to be taking a pounding on practically no trades. SGI was marked down the first 5% after less than £20K worth of trades. Buyers market!

[xdavid] 17/5/2004 12:50

Well, I couldn't resist it any longer. Just bought another 5000 (squeezed in between the two big buys ! SGI now a rediculously large proportion of my portfolio.

I never thought I would see such opportunities.

[nurdin] 17/5/2004 12:49

Just the state of the market...looking to buy loads!

[tinker] 17/5/2004 12:48

Why the big drop today. There doesn't seem to be any news.

[nurdin] 17/5/2004 12:37

In these uncertain times what better investment than stamps? Stamp Index must be risisng by the day :o)

[ukhawk] 12/5/2004 22:24

Shuisky, that's exactly what SGI have stated they will do. I think they're too far down the road now to hang on to PRVD shares for a possible further increase.

[shuisky] 12/5/2004 09:05

nurdin, Why not let SGI sell up, return the cash to investors, and then, if we we want to purchase PRVD with the proceeds than we will!

I'd rather SGI focus on growing their business.

[nurdin] 11/5/2004 21:12

Thanks cottoner....thats atleast 550k customers on their database.Imagine what it would do to PRVDs revenue and earnings growth if all those customers also started buying fresh fruits and vegetables on line from them!I think SGI should hold on to the shares until they hit $30...

[nurdin] 11/5/2004 11:39

Interesting trades going through...Directors buying? Wouldnt surprise me..

[ukhawk] 07/5/2004 23:01

PRVD closed tonight up 15% on the day !

[hectorp] 07/5/2004 18:59

Fascinating stock this, pity for me I missed the earlier rise.
The power of stamps ! - Last night it was reavealsed the Queens Art collection is worth at least £30 M - but her dad ( Bertie - George VI) STAMP collection in THIRTY volumes!
is worth at least £120 M !
Who said stamps are inferior to works of art.
Gibbons is a money making machine in a niche growth market, a special one..
these are going in my pension. Whether in a couple of weeks or a little later I've not decided yet.

[kael] 07/5/2004 17:05

Well been away for a few days, nothing much changed here on SGI. PRVD up 10% which is good :)

With regards to SGI's shareholding - I expect there is a buyer already and I wouldnt expect a sizeable discount at all... Only a month and a bit to wait.

[xdavid] 07/5/2004 15:30

I reckon SGI are too shrewd to just dump on the market. Either they will already have a corporate purchaser or they will just hold on until one appears. They have no reason to be in any rush to sell. All of us "loyal shareholders" will just have to wait...

Either way though, it would be naive to expect the top price for such a large holding. There is bound to be a sizeable discount to the buyer.

[clocktower] 07/5/2004 14:12

Trouble is with PRVD stake is that the market knows that SGI wants to unload the stake. this in itself seems have possibley helped sewnd the share on the downward path of late. As we get near to the June date it could sink more imo.

[smow1] 07/5/2004 08:14

Looking good for June then and the PRVD sell off. SGI should get a large sum of money for their initial investment which they can return to the loyal shareholders in the form of a one off dividend.

Assume since PRVD are doing so well that SGI will also be trading well as the world collectables market seems to be very hot now that places like China are snapping up items like stamps. There are only so many to go around so scarcity will raise prices and hence profits fast.

[ukhawk] 06/5/2004 12:41

SGI investment in PRVD is currently worth about £2.2m, or roughly 9p per share. The lock-in period ends 14 june, so there should be some news shortly after that on the pay-out.