Member Info for CarpeDiem1

Latest advice not to mix, must mean London 2020 gone now.

On the Internet, I am finding selling still quite good.

I think with the latest US announcements and the coming UK lockdown the govt is telegraphing Stamp 2020 is a goner.

This is certainly the biggest crisis since 2008 and a once in a decade opportunity to buy bombed out stocks. Not sure SGI will actually be on my list but airlines and holiday companies will be.

According to govt the epidemic peak will be in a couple of months. If this IS the correct prediction I doubt this event will take place.

On the bright side, if you have cash, you should do very well buying blue chips in 6-8 weeks time.

It is not possible to delay the show simply because the venue is booked years in advance.
The best outcome I think is that the virus tails off by then and the show goes ahead. Inevitably it will impact footfall because many collectors are 70+
I went into town today and noticed the cafes and shops much quieter. A global recession is coming I feel.

That £15k sale knocked a million off the value of the company. Its a crazy system...

the 67,800 buy was mine. I am happy to take another punt at 2.2p just in case the figures surprise to the upside.

Futures are pointing heavily down again. Cyclicals collapsing. i am taking profits and holding cash and gold until this virus has done its course.

"Can't see the event necessarily being cancelled as it relies primarily on UK and US visitors, "
That is not necessarily true. As an international there are many collectors from around the world who put their collections up on display hoping to win a prized Grand Prix medal. Obviously this show only occurs once a decade so its cancellation would not only upset philatelists who have put years of work into their collections, but also to the dealers hoping to "retire" from this one.
I can tell you from experience there will be (or would have been) many visitors from all across Europe, Asia and Australia as well as North America.
Even if the event goes ahead, I suspect it will not be as good as hoped and we are only at the beginning of this virus pandemic.

2020 will only get pulled if there is a virus outbreak in London. Is that what you mean, Devon?

The mid-year update showed basic running costs and servicing the debt at £1.5 million for 6 months and actual profit from philatelic, publishing, coins and interiors combined at £300,000.
If they can halve the running costs and double the profit, there is a chance.

This stock must have a very substantial mark up if it is going to sell so slowly.
The real profit is going to someone other than SG who only earn a commission. But then have to negotiate to buy the remaining hugely overpriced material.
I agree with Pearls that there is no capital outlay, but this isnt a great deal.
They could have simply gone to a few firms in the "trade" and asked for stock on approval for 6 months then give back what hasn't sold and change it over.
There is more here than meets the eye...

If I am reading this correctly SGI has been loaned stock worth £1.1m from Phoenix to sell over 7 years. After 7 years any residue is negotiated as a sale to SGI. SGI earns an unstated amount of commission on sales.

I don't know what the implications of this are, but presumably SGI does not have £1m to buy stock, and a 3.30pm Friday RNS release means it ain't good.

I wonder if some news is leaking out about the figures, hence the decline.

For your information there is no Feb Stampex, but there is a May event called London 2020 International Stamp Exhibition.
I recommend all to go, if only to gauge the strength of the stamp market.

My opinion on the full year figures....I doubt they will be making a profit.

I have had a mailshot about Harmers of London (now part of Bollaffi Group) who are hoping to restart auctions in Mayfair.
This might be a headwind for SG auctions.

I cannot buy even a small amount. Negotiated trades only

Time to stick my oar in.
I do keep up with the stamp markets and I can tell you that the number of collectors is diminishing rapidly. Auction prices are firm for high quality material but poor for middle range stuff. GB collections that would have sold for £15k-£20 5 years ago are now £8-£10k. There are a number of dealers whom I know who are going to use the London 2020 show to sell their stocks down and retire. This is the reality of the business in Stamps. Coins maybe different, I don't know.

That said, SGI is a highly cash generative business, given their huge markups, which they are able to get for product. A profit margin of 50% these days when discounters and internet traders are racing to the bottom is quite impressive. We know SGI is saddled with debt, but this is ringfenced by Phoenix so it entirely possible for SGI to make modest amounts in years to come.

I disagree with Pearls in that I do not think a 300% improvement in turnover is possible, given market conditions. I cannot see SG Auctions holding a £20m auction every year like David Feldman or Corinphila, but I do think they can increase turnover by 50% over 5 years and looking forward to the end of next year when they might show a net profit.

I have been highly critical of SGI over the last 24 months, but staff levels and costs are reduced, the 399 premises secured, more collections coming into auctions and the philatelic market holding up well I have decided to take a small position. The 79,000 buy this morning was mine.
I do remain uneasy about an expensive refurbishment which will drain money and a board also frittering away cash. This firm could be taken private as a little sideline for a billionaire but these days the kudos is owning soccer clubs.

The company is still under pressure to sell stock at market prices (not SG prices).
Their latest auction is full of lots made up from their own counter stock and the stock of Murray Payne which is being offloaded.

This will feed into the stock figures in the next 12 months and my guess is the stock levels will continue falling and profitability will rise a bit. At some point in the near future they will run out of firesale stuff and the reality of debt with small stocks and declining sales will hit.

I don't think this is one for Widows and Orphans.

So, according to Earache, it's CEZ deal or No Deal.
This has a kinda familiar ring to it.