Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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There's a real chance that the company may report a small profit for the full year, and the chance for it should be even bigger in the interim results in November... Then the market will have to re-rate the price here even if it doesn't want to.
On what metric? There's no earnings, and unlikely to be for the future, so it comes down to goodwill, and assets, presumably the assets are security for the debt.... that can't be serviced, they are in default, in fact they are having to increase debt levels, so it comes down to good will and value in, what appears to be a diminished, and from a shareholders perspective tarnished, name. Hence once the support from speculators has cleared and if they keep selling over the next few day, sensibly 0.5p is on the books.
Nevertheless the current market cap is ludicrous for a business that includes Stanley Gibbons, Baldwins, Murray Payne, etc.
Pearls......I certainly consider my comments fair otherwise I would not have made them.
Overheads....look at the top "execs"., marketing , etc.....sure they got rid of a lot of staff...but there are still issues...they have also recruited since cuts..
You are right SG is known internationally for the catalogues, ....not for dealing or auctions....
Before Phoenix.....well... they may have at least had some staff who knew about the philatelic business!!
SG will never be strong in auctions....they cannot compete....they have nice hard working staff in auctions but there is no gravitas there...and the catalogues are a disaster...I would guess designed by "marketing people"
Trade shows and exhibitions.....these are in a crash dive that is likely non recoverable...as I have said the dynamics are changing.
You ask who is "top of the stamp trade"....SG are in the dealing arena...but there are many others .....and as for auctions....well...Spink, Corinphila, Grosvenor, Argyll Etkin, Cavendish.....others are creeping up....Harmers....Corbitts, etc .
I have been involved in stamps for almost 50 years ...I have good relationships with most auctioneers and traders, including SG, for whom I have a particular fondness but they lost the way some time a go.
Its sad....but the reality has to be recognised.
Pearls....you are going into melt down. Please stay away from naked flames and falling knives....!
Lol Buy more , you've changed your tunes some much over the last few day.
0.5p....see you there and I'll pick some up myself.
Hamilton, do you consider your comments are fair? On what basis do you consider their overheads are not under control? They have got rid of a lot of staff. International Goodwill / brand recognition - cannot agree with you. Their catalogues are the only ones in the public libraries, equally for the English speaking world, their catalogues are the main ones bought, especially for [ex] Commonwealth / UK collectors.
Absolutely agree that the old management [prior to Phoenix's involvement] were not good enough but the current management are all new since then.
Where SG are not strong enough currently is in auctions but that is being firmly addressed and the reopening of trade shows and exhibitions must help.
If SG are not currently top of the stamp trade in the UK, who is?
Devon, in answer to your query - yes - I am still happy to buy more. I accept it looks like a falling knife, but I have seen the shares rally fast as well over the years, it has not always been downwards. I think the recent update did not deserve this response, at some stage it will dawn on investors that this is a bargain. Clearly those who were holding hoping for a dividend are now disappointed, but in the real world, was anyone holding this stock for dividends? I do not think so.
For me, the real issue is what happens next March with the debt level. Pretty clearly Phoenix have a lot of skin in the game on this one, I cannot see them not coming to the table to do a deal. They now need to do a deal that re-establishes value to the equity - after all they do own 58% of it!
Shredding, have to agree with you on this. Both the Stanley Gibbons brand and the Baldwins brand are well known in their respective areas, they do have value. Also of value is the Royal Warrant - again - what company in this field holds one other than SG? Then there are the other businesses in the group - how can they all now be worth so little?
Devon, I can't agree with you about the fractional ownership not being a success. They have only put two items on sale, one which was very expensive, the other much cheaper. Frankly, both looked to me like experimental offerings in an unknown market. The coin sold out rapidly but it was a small offering. The stamp is clearly selling slower now, but sales react well to publicity and I do not think it was their aim necessarily to sell out straight away. Instead I think they intend to sell a further tranch of the fractions in say half a year's time - there is no hurry after all. It looks to me like the biggest error if there is one in all this, was allowing SG to only have a 20% holding of Showpiece. Since so far it is only SG's items being sold fractionally via Showpiece, I would have hoped for their shareholding to have been over half.
But you will also note that "goodwill" hasn't stopped the business going bust on at least 2 previous occasions and being on life support now. How much that goodwill is worth is debatable, for my money ,a couple of million as I've indicated. I see very little value beyond goodwill at the moment. Lots of promises, but as we know they aren't worth much in the cold light of day. Invariably, it could go bust again if Phoenix come under more pressure. That's why I comment on the DTY and Castelnau IPO. For clarity, I have a small position in DTY's corporate debt. I think our are right about the timescale bing five years, my worry is that in 5 years if they don't make any success of the fractional issues, they haven't so far, their core client base will be that much older.
Oh dear.....its not good.....I am surprised that SG is still struggling on.
Some say..."overheads under control and at a bare minimum"...They are not...
"International goodwill"...it does not exist....the "brand recognition" has been in decline for a decade plus...
Sadly SG has lacked astute philatelic leadership for years...it continues to do so.
SG will never regain the "top of the game" position again....
In combination with the above is the ever changing dynamic of the philatelic collecting world.
You invariably seem to show no idea of the goodwill internationally of the Stanley Gibbons brand.
To me, the current share price is one which the market has fixed to establish a good 2-way trade in the shares again.
"so let us imagine for a moment that the annual turnover therefore does grow to say £16m or more by April next year."
But you were forecasting £20m by the end of last year......please get a bit more serious.
"company cannot be generating positive amounts of cash / be profitable? This was not clear from the update. "
I think you've answered your own question.
"Given their overheads have been cut to the bone"
And then increased by the expanding debt burden, what do you think would be better in a people driven business? People or debt......
"Devon, you are bang on the money as you say", yet you won't be able to see 0.5p coming down the tracks if we have a few more days of savage dumping will you?
Now your turn! Are you brave enough to buy more when you appear to be willing to encourage other to do so....I doubt it, liquidity problem again LOL ?
It is what the RNS didn't say which was bothersome.
Increased turnover, yes, but not surprising given almost no footfall last year.
No mention of profitability, rising costs (all salaries and bills are up substantially), or how interest charges are impacting on the business.
Also this is a debt ridden business at a time when rates are rising.
Will the next loan be at 7% or 8% or even more?
Devon has pointed out it is the lender making money here.
Another day, another drop- fine with me... Just ask yourself if you wanna hold it all the way- and that's it. 2 years ago I sold out for some reason at a loss (obviously) at the lowest offer... Not long after it went up. I bought in back. This shall not happen to me again here.
Devon, you are bang on the money as you say, but the RNS says that the company is recovering. The recent RNS hardly indicates that it is still a declining business and the main parts of it - stamps and coins are both seeing increasing turnover. Looking at the CEO's comments, there is a clear intention to grow the business faster and more aggressively, so let us imagine for a moment that the annual turnover therefore does grow to say £16m or more by April next year. Given their overheads have been cut to the bone, and the legacy stuff is now basically out of the way, this could be possible.
Is it your view that as long as the debt carries on increasing, that the company cannot be generating positive amounts of cash / be profitable? This was not clear from the update. Please advise your views.
Also, how do you see turnover growing in the next year or two?
1.85p BANG ON THE MONEY! ;)
If we get another few days of this, hold out for 0.5p then go long for 5 years.
......I just bet Pearls still ISN'T adding any more ! Time for a top up Pearls? Lost your nerve or still think you can't because of liquidity? LOL
On a serious, last figures showed an increase in losses, the trade update showed more additional debt and there's no sign of earnings growth. Frankly, I think the business is only worth a couple of million. Being in the debt would be much better as we now know it's compounding at 5% per year...unlike the earnings per share.
Let's be generous and let's say it worth about £3m for the equity cap.
This is becoming shocking. Cannot believe these daily falls. Was the update that bad? It read well to me, I re-read it this morning and still do not see why the share price should have been so hammered.
Perhaps it is traders playing around with the shares, but the current price seems unbelievable.
Nice little rally across the market today.
DTY looks a bit sick down 4.17% and Castelnau is at a low point since the float.
Phoenix running out of steam? If they catch a cold, then, as I've said before, SGI gets double pneumonia with sepsis, but we can rely on Pearls to call it hay fever LOL
Ah, but Pearls, you didn't believe we'd go sub 2p either did you, so no it's not a "mischievous price", it's what I expect if we break 1.8p. Which is still one the tables.
Still to highly priced for me around this price, maybe see where we are March '23. In the interim, it's got to be dirt cheap, which it isn't at this moment, for me to consider it a buy given the inherent risks I've out lined over the last 3 years. Just think of all that money you would have saved if you'd just be willing to take some advice LOL
No need for congratulations. ;)
Devon, I cannot say congratulations but here we are below 2p which seems ridiculous to me. The shares will not fall to 0.5p - I guess that is just a mischievous price from you.
I wonder if the Board expected the price to fall like this - I genuinely felt the update was very positive? Yesterday's fall arose following a large sale who's publication was delayed until late in the trading day. It looks like something similar is happening today. It makes you wonder if the price is being manipulated........
Good points, Pearls and important too… I guess we’ll know more in August. -That’s when the results are due, I take it./ Devonplay, I must admit now that the share price may fall further, however ridiculous it is. - Yes, that’s because sometimes the market simply sends the prices to insane levels… £8Milion Cap? I don’t buy that trick.
Devon, you have called it correctly so far.
It looks like the addition of more debt has spooked some investors. Is this debt really going to be for investment and growth or is it merely keeping the sinking ship above water?
On the matter of increased revenue, presumably the money collected from the sale of fractions is added to the balance sheet. If this is the case the figures are obviously going to look better.
Sub 2p now, so 1.8 looks close, if that's breached I have it down next at 0.5p.
I'd consider taking a position c 0.5 and look for an exit in 5 years time.
As I see it, the trading update was definitely positive, but there are two issues that no comment was made on:
A. Is the company trading as a sustainably cash positive business yet? This aim was stated as being THE AIM back in December.
B. Like others on here I note the increasing debt, up another £1.3m, with the debt facility itself being repayable in March 2023. Will this deadline be waived by Phoenix or rolled over into another facility or extended for a further five years? Most companies sort out their banking facilities a year in advance of deadline dates, yet there’s no mention here of what’s going to happen. As pointed out earlier it is basically providing the company with working capital for a year. Yet if the company is becoming sustainably cash positive, then why does it need to increase its debt?