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Devon, I think many are watching this share from the sidelines at the moment.
Bear in mind, there are at least 1500 investors who have been buying the Showpiece items who are a ready market, presumably, for the shares....
I disagree with your analysis - if anything I increasingly expect some very large purchases to be made soon. The price is now too low.
https://amp.ft.com/content/0b4be1bc-1790-49bc-b5c6-bfff2e52e02b
(-6.45%)
I'm expecting the price to collapse from this point on.......
"My algo is pointing to this being down another - 5-6% today. There's sometimes a lag, but it's been pretty accurate up to this point. Not a recommendation."
Bang on the money again.......0.5 still my target.
Most of the Sectional catalogues are simply not profitable. The Commonwealth catalogue and Collect British Stamps are the moneymakers. SG would probably be better off not publishing catalogues but sub contracting, but it is nice to control the price level of the things you are selling, which is why SG have always kept publishing in house.
Victoria, the point is to remind everyone that SGI still issues catalogues, and that the publications dept is still relevant to them and an earnings stream - indeed it made a profit in the twelve months to 31st March 2021.
Many more catalogues are due to be issued soon - these add considerable value to collectors doing the hobby and their catalogues are sold around the world.
According to the April 2022 RNS: "After a much reduced catalogue production schedule in recent years, the Publishing division is once again regularly producing stamp catalogues. Combined with increased efficiency in this part of the business, market share gains in magazines and further progress on the digital product side, we expect to see continued improvement in performance here."
Sorry fat fingers
How will they market the Magenta? They aren't exactly setting the social media world on fire (1500 odd Instagram followers). It feels more and more like the idea was dreamed up as a way of justifying the Magenta purchase. I don't see how this helps SG in anyway. Plus it's so public they really can't be making much margin.
I've just been having a look at showpiece. I'm not confident in the concept as a business but feel this Warhol will be very telling. SG have a database of clients who are interested in stamps and coins via Baldwin's. They don't have a database of art collectors so who will they market thi
So what’s the point, Pearls, in advising us that two new catalogues have been published when they are irrelevant to the shares?
Victoria, at the 6 month mark c£700k.....on which (I believe) they lost c£70k.
What percentage of the SG business is in publishing?
Italy
Concise British
And the -40% decline in consumer confidence. That's going to be a big issue, people on fixed incomes, of pension age, will be effected and there's going to much less interest in "dead" money assets. I'm still at 0.5 target.
So far as the magenta is concerned doesn’t everything depend on there being a workable market for the pieces post purchase in which everyone has confidence? In the absence of that, the unsold pieces are dead cash.
My algo is pointing to this being down another - 5-6% today. There's sometimes a lag, but it's been pretty accurate up to this point. Not a recommendation.
The NFT market has collapsed...has no one told SGI?
https://www.independent.co.uk/tech/nft-sales-elon-musk-b2071204.html
"SGI is as exposed as most to the adverse winds that are now blowing over the market"
Just as it pegs all it's hopes to NFT's, there's become an appetite for income generating real assets and the demographic clock keeps ticking for their declining core business. The debt pile keeps growing, but it is out performing the market in one way way, it's declining in value quicker. Guess that's what the Pearlster meant by "share of the year".
I hope you followed my advice on DARK Pearls? You were hot to tip it at 420. Still a buyer now? I suprised you aren't filing your boots here...I'd wait til it get's to 0.5p
In theory SGI should be well placed to benefit from the negative 8% interest rates (BOE interest rate minus inflation rate) which eats away their debt, but it doesn't help that their debt pile keeps growing. Collectables have been useful hedges against inflation in the past but I wonder whether that will be the case this time.
SGI is as exposed as most to the adverse winds that are now blowing over the market
Another 6% today
Almost 10% drop this morning, and a spread of 30%. That's what you call a bloody nose.
Still, we've got a long way yet to go.....0.5p looks more likely every day.
2 good posts again from you, Paerls. What is it else to say. I have amassed some reasonable amount of shares so unless it goes lower, much lover, probably I will not buy more; instead - funds permitted- I’ll be interested to buy some fractions in Showpiece. Both for the Shares and Showpiece investors I can see only the upside. But time will tell as in every kind of investment. But I can’t help thinking that the market is doing every effort to nail this share down to every next bottom. But if that’s really the case, it’ll end up in even more spectacular returns!
The other issue I forgot to mention is the aspect of the 1c magenta. Will this now appear as an asset on SGI's accounts? If so, this alone will make an enormous difference to their asset base and in turn should reflect onto the equity position.
We won't know where in the Phoenix operation they are putting the 1c until the oncoming results, but since the stamp is very much identified with SGI, I would expect it to be part of our accounts. That will make a material difference to things.
You should look at the ten year graph on this share to really see how it has had an unbelievably wild time on the stock market. Frankly, you will then realise that anything is possible going forward......
We all know the business has been through a nightmare, was loss making, and critically depends on Phoenix for its banking / loan position.
But things are changing now, and I do not believe it is loss making any longer. This is partly due to the revenues from Showpiece rolling in, but also that trade / auctions etc are all picking up and 'normalising'. In addition a number of new catalogues are due to imminently hit the shelves updating a range of out of date material. Turnover appears to be growing nicely, helped as well by the growing internet offering.
As regards the debt, the better question might perhaps be: what level of funds has Phoenix sunk into SGI and could it get this back currently? We have discussed this at length on here, but initially they bought a 58% equity stake for £19.45m and then wiped off £7m of old RBS bank debt, replacing the old banking facility with a new Phoenix one on kinder terms. I think the current level of debt is around the £16m level, but there are other inter-company debts etc. The point is that suppose the total cost to Phoenix has been around £40m, then no, there is no way either that they can get the money back in the near term, or that there is any point at all in calling in the debt - it cannot be paid off and they will also obviously have to wipe off their large equity stake - completely pointless.
Therefore what has to happen here is that proof of the company's growth and stability has to emerge via oncoming trading updates - the next one is in early July / late June. Once the shares appreciate enough, I would guess they will hold a rights issue to pay down the debt. This won't happen until the shares properly recover somewhere into double figures, but if Phoenix were to waive some or all of the debt, it is the same position actually - the share price will rocket, meaning Phoenix's holding becomes a lot more valuable. Currently it is underwater - they bought in at 2.5p a few years ago. As Devon says, this is a bottom drawer situation that is not going to suddenly radically improve tomorrow, but will improve over time. It is time, most importantly, that Phoenix are now providing, allowing the business to effectively trade out of its past problems.
Eventually, when things are much rosier and the share price is unrecognisable compared to today's levels, I expect Gary Channon will sell the company to someone like Sotheby's or a big US auction site but that is some time off.
Just a question now of having patience and waiting it out.
Incidentally, stamps and coins are normally good assets to hold to counter inflationary risks - this again may be a positive period for the group as a result.
Have been following this thread for a while and enjoy hearing what everyone else on here has to say, so thank you all. I agree with Pearls that SGI has possible significant upside. However, I also believe that the share price still has a long way to fall before eventually recovering:
1) The business is currently loss-making, and this full year will be the same. The RNS mentions that turnover will be about £12m. Although I assume this figure excludes sales of fractions via Showpiece, and although profitability on turnover has improved, £12m turnover is simply too small for the group to be trading profitably for the year, even discounting the loss of close to £1.5m for the first six months. Ultimately, it is the PE that counts.
2) You must remember that SGI is essentially going to go bankrupt unless Phoenix cancels the debt. This is certainly a possibility, but we simply don't know. Having watched a lot of interviews with Gary Channon, he makes a big deal about Phoenix always making sure it gets its money back in a worst-case scenario. Unless the company can get back to profitability, Gary and the team may well lose faith in the company and call it quits. The fact that they hold the debt means they can and will get their money back should the company fold, and everyone else will be left without anything.