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"Phoenix own 58% of the shares and are the company's banker."
https://www.aurorainvestmenttrust.com/ the listed vehicle of Phoenix Asset Management Partners.
% of the UK portfolio investes in Phoenix SG Ltd (Stanley Gibbons)
Jan 21 5.4%
Feb 21 5.0%
March 21 4.8%
Figure for March 2020 7.1%
That suggests that by owning the "fund" rather than SGI you would have been looking at 1 year 55.63% on a much better risk diversified basis.
It's fun seeing Pearls pump away, but Pheonix/Aurora offer exposure to a portfolio of UK companies with long-term value prospects.
Note: Long Term
As of June 2020 they reported £7,6m assets which make up the investment in Stanley Gibbons plc. The remainder being provided by Phoenix Asset Management Partners (or one of it's vehicles).
You can take comfort from the dual exposure of Pheonix or you can see that a potential concerm (as I do). Not a point that would stop me investinging, but one that would make me think about the risks of being a minority shareholder. In most circumstances the market does apply a discount in those circumstance. You can see that easily in CLDN.L Where there's a "Cayzer" discount through the discount to NAV.
Without covid it's very possible that SGI may have returned to profability. That's the general view you get from reading Auror's literature. Would that have resulted in a sky rocketing shareprice, that's less clear. Pearls would have you believe so, I'm more cautious. If there was it's likely to be driven by retail, exagerated by the limited free float, and just as likely to ebb away. Institutional investor - I very much doubt they'd get past Pheonix's control.
So Aururo may be a better bet for the majority of retail investors, it's trading close to NAV (as I remember it) and offers diversification, respected management in the sector and liquidity.
Of course that wouldn't help Pearls :) If like, ArvInv, there was profits I'd be tempted to let it run and go look for somewhere else to deploy the principal. I see nothing wrong with investing in SGI for the long term. After all, it's key investor and banker are experts in doing so. If you get past how much they control it through the debt, and how much they got invested of other people's money, it's a possible recovery/turn around play. I'm remain of the view, if there was an option, I'd prefer the debt over the equity. It's gone be much stickier and I suspect what will get serviced first. Auruor might have an influence on that. As ever, one for the long term botom draw.
Pump away! LOL
LOL, you are very clearly proving my point. It's beholding to one party, you are a minority shareholder in a business dependant on goodwill.
Yes, I refuse to read the! Like you refuse to understand the "less bad" update.;)
You sound shocked at how vulnerable that makes you. Haven't you considered it before?
"the long term" finally, you're starting to understanding this could take years. Those "soft rates" again. LOL Out of the goodness of their hearts, I mean they are tripping over themselves to promote the equity aren't they? Don't we see them doing road shows, a video updates all the time....
"Owning shares is always a dynamic situation" Yeah, I'm almost blown away by how dynamic the price action is, 5 trades on a good day! God knows what it would be like without the Financial PR!
So they've turned their £19.45m ( 58% of the shares) into 58% of today's market of £13m and secured it with a £10m loan and you think that's positive, supportive and they spend all their time worrying about minority shareholders. I would think the opposite, they have written off £7m, their equity is down to £9m and they are having to defer the debt payments to stop it defaulting. If there's anything thinking on a basic level required you should be doing it. Face the facts, slow turn-around, company not making any profits, couldn't service it's debt and turnover ain't increasing in any meaningful way. To top it off; collectibles are booming everywhere else, it's just "less bad" here and there's a market wide rally they aren't participating in. Well them and HBR.
There you go, you've provided an overview, that's not open to interpretation and outlines how precarious minority shareholders interest are in the business. We thank you.
Phoenix have lost a hell of a lot on this transaction, but hey ho, they couldn't possibly take it private and secure the other 42% could they by calling in the debt and diluting you out. If they did they'd still have control of the business (and most likely the debt), what would you, as minority holders, have.....?
Devon, I don't know if you're deliberately trying to be misleading again, but your wrong.
Think about it on a basic level. Phoenix have paid £19.45m for 58% of the shares, and they have written down the old RBS bank debt to £10m [costing them another £7.1m], meanwhile they have replaced the old RBS facility with their own funds and provided a new facility to SG at soft rates. What part of this makes you possibly think they are going to or likely to call in the debt? That would be a complete waste of £19.45m!!! Which is more than the debt owed to them by SG : £10m???
Yes, all other shareholders here are in a minority situation, but it is hardly the worst position - Phoenix are a highly supportive majority shareholder in it for the long term, something they have reiterated repeatedly.
I see you still refuse to read the 2017 and 2018 RNSs' - if you won't understand why the company is in this position, how can you lecture on whether or not it is far / near etc in its recovery? You have no idea.
Also, I'm surprised you keep on repeating my supposed aim to exit. Wrong again. I have no intention of exiting. This stock is going to fly in due course, and I'd be poorly advised to sell now, just because you don't understand the situation.
Owning shares is always a dynamic situation, but owning them without understanding the reason a share is in its current position is pointless, yet you persist in arguing about it.
Again, please read the relevant RNS statements so you can at last understand where SG now is.
LOL so in fact the only thing that keeps the business going is the good will of it's major shareholder and banker. It wasn't able to meet it's debt obligation after all.
Sounds a very strong position for minority shareholders to find themselves in....
You mean it doesn't matter that the company has unmet obligation and only survives on good will?
So they are going to put that behind the interest of minority shareholder?
You sound like you've just realised the share price doesn't matter to the major shareholder and how precarious your position is as minority shareholder is. Precarious indeed. If you think you rank the same as the majority shareholder and senior debt holder, then you really don't understand corporate finance. Talk of debit holders v shareholder, well for minority shareholder is very much to the point. You only matter whilst they find having some free float and a list advantageous. If they call in the debt, they they'll still control the business, you'll just best diluted out of existence.
I don't need to go back to 2017 & 2018. It's all very apparent from the December 2020 update. The infamous "less bad" RNS.
That's why time may be pressing for you, and your desire to exit, but for them there's less rush, after all, they got the debt that can be serviced for years down the road without any need for appreciation of the equity. They can take the next 3-5 years working their cash out through debt capital repatriation.
You sound spooked! Maybe because your missing out on the general market rally. Well, the advice would be, do as the other poster "I was pretty bullish on the company but have gone cold" (the one you seem to think was bullish) and remove your capital. Alternatively accept this is a turn around and could take a few years to get out of the weeds.
"Soft banking facility" LOL how naive can an investor be. They are bank rolling this as a charity thing for minority shareholders...... obviously :) hahaha
I should add as a postnote that CW and AC are now both at Mothercare [MTC] where they have just pulled off a similar life changing deal for those shareholders. That share price is beginning to rally, admittedly MTC is a bit higher profile than SG, but it was again a very good deal for shareholders, and the benefit of that deal is starting to come through.
So far, there has been no benefit to SG shareholders of the deal CW and AC hammered out, but once the company starts to show how transformed it is financially the shares will start rising, and if you get in now, it is at the bottom of this process. Phoenix got in at 2.5p a share for their 58%.
It is this key point that Devon ignores or is simply unaware of. Talk of debt holders and creditors vs shareholders etc is pointless here. Phoenix own 58% of the shares and are the company's banker. They took over the £10m debt, and charge the company a basic interest charge on it whilst providing SG with an ongoing banking style facility at very soft rates. They even managed to get hold of the old Guernsey stock at bargain levels and bear in mind this is really quality stuff. It is available to SG to sell as an ongoing turnover.
So, we have a company with access to quality stock at cheap prices, a soft banking facility and supportive main shareholder. Over the last year, the debt did not increase - what does that tell you in the middle of the COVID nightmare? Clearly once trading starts improving properly a profit will start coming through and there will be the prospect of a dividend payment again. It is just a matter of time before the market does start catching up.
Devon - please read the 2017 and 2018 RNSs I refer to before responding further.
The point is that recovery actually began once the February 2018 deal was signed off. However, because of COVID this was delayed, but just look again at the recent trading update: despite very few auctions and no exhibitions, SG experienced a better second half to the first half of 2020! I'd say that was a result, it is just not apparent how much of a result. The main thing is to get the company back to trading in the black again. That should be coming on later on in 2021, the auction a few weeks ago was a sell out, the next auctions look equally good, and SG is now clearly refocusing on India which is a red hot area for collectors. These will definitely be good auctions, added to which the shop has just opened and that should add to things. The shop was completely upgraded last year, obviously planned before COVID blew up, so we have not been able to see the benefit of the upgrading so far, but it should become obvious as it is basically now a Mecca for stamp and coin collectors with auction rooms, meeting rooms, a small museum area, the showrooms and so on. The point is that recovery is now taking place and as costs have been cut right back to the bone and legacy issues dealt with some time ago, the move back into the black should be sharply apparent in October's update [when they update for the first half of 2021's trading]. Things will improve even more once the exhibitions and shows start again - these were big earners for SG.
The problem now is that the company is so small that it is under the radar of practically all analysts, so it is reliant on small investors getting more aware and buying in, but since not many updates are issued, this is taking a while.
However, there can be very few shares that collapse from 382p to 3p and are still trading a few years later, fortunately here, Phoenix are both main shareholder and banker, so there is major support.
SG is one of the oldest companies trading on the stock market - it's been trading since 1856, and has the benefit of the Royal Warrant as they are Philatelists to the Queen. It's a long history marred in the last decade when they attempted to boost turnover by offering investments in blocks of investment grade stamps via their subsidiary in Guernsey. These investments were offered with buy back guarantees which obliged SG to buy back the stamps at pre-arranged levels to back the investments. In 2010-12 the market initially welcomed this initiative, and the shares rapidly rose from around 15p to a high of £3.82 by March 2014. By 2015 it was getting hard for SG to honour its side of the deal, and by 2016 it became apparent that SG had essentially got itself into the position of having very large liabilities for these buy back guarantees. The shares began collapsing, and by mid 2016 were under 10p. Urgent medicine was called for, and specialist merchant bankers were brought in to assist. In November 2017 SG Guernsey was put into administration and ring fenced from the rest of the group, thereby saving the overall company from collapse. Bear in mind by then the liabilities were roughly £60m.
In Feb 2018 Clive Whiley [CW] and Andrew Cook [AC] pulled off a further master deal, and got Phoenix UK Fund Ltd to invest into SG. At that time, RBS were the bankers and debt was over £17m aside from the buy back guarantees, so things were getting desperate. What CW and AC negotiated was that Phoenix would invest £19.45m for a 58% share of SG, debt would we wiped down to £10m and RBS would be replaced by Phoenix who would then offer soft banking facilities to SG.
This was a transformational deal for SG, and for shareholders. At the time, SG's trading was affected by the Guernsey situation which took a while to unwind, plus it had to sell off various unprofitable parts of the operation. That took a while to go through as it was frankly a bit of basketcase at the time. However, practically all the legacy issues were resolved / dealt with by late 2019 / early December, then COVID hit. This was extremely unfortunate as SG expected to go back into the black by late 2020, but this has now been obviously delayed.
Devon, when you comment about a mid to long term recovery you refer to that being from today. But that is really misleading and you should read up on the RNSs from 2017 /18.
LOL. This should be funny.
I see that you feel the need Devon, to come on here with negative comments to whoever posts anything even mildly positive. Is this warranted? Perhaps you should learn more about SG before you lecture others.
You appear to be badly behind the curve on this one I note, and your comment: 'mid to long term recovery' for SG is misleading. I note from previous posts you have not been aware of the history of SG and the recapitalisation of the company that arose a few years ago.
Basically, for you and other commentators on here, a brief history lesson: see next posting.