Member Info for CarpeDiem1

I agree it is all about profit but SG have already said margins are down. I have just added up the total of items currently listed on SG website which are over ten thousand pounds and the total comes to 22 million (or thereabouts). I notice a few that were previously listed like the penny black block of 18 are no longer listed so perhaps this was sold or more likely part of the guernsey liquidation. Anyway I am saying that about half of SG stock is investment stock and we will continue to see write downs of this material as SG become ever more desperate to shift it.

Ringworm. A normal retail business should be turning over stock value twice a year (mine does). However SGI certainly isn't turning over �94 million a year. It is something like �30 million (on current figures) This pretty much tells me that they either have the wrong stock, or it is too expensive. If you look at their stock offers, many items are now discounted, but on the major pieces, they are vastly overpriced. Take for instance the Penny Black VR unusued pair at �90,000. This was estimated in an SG auction several years ago (2 years?) at �30,000. Presumably SG ended up buying it. So my point is how have they valued the stock? In my example is it at �90k or �30k? I think we will see continuing falls in stock levels as this repricing continues and as the business focuses more on collectors rather than investors.

Wouldn't selling some stock provide working capital? SGI need to get real on their stamp valuations and start valuing their stock at what it will sell for on the open market, not what they paid on investment buybacks or what the catalogue says. I have been moaning about their stock valuations on here for ages, but it feels that �5m will not be enough, once the existing stock value is halved.

The wave of selling has stopped. I even bought back a load at 3.80p myself. But need a bit of good news to move this higher. Lets hope for something positive in the next few weeks.

I find it strange there are first time posters on here who suddenly feel they need to comment on this rather quiet board. I am critical of the company but at least I give my reasoning. I wonder what their motivation is.

Sgi has never been worth 700 million. The shares were 400p at one stage but there were many fewer shares then.

Hi Pearls. Happy New Year to you. I accept some of what you say about the losses. The figures being released are well behind the curve in terms of savings. The current figures include the losses from Interiors (now gone) and from the disastrous Marketplace. I also see that the cost savings from staff redundancies are not fully incorporated into the figures yet, so we won't fully see what is happening for at least another 12 months. Yet I will point out a few things. No Directors have bought, even at 4p. The turnover and profitability of the new SGI business is going to be affected by the difficulty of finding new investors of stamps. The new business will only generate gross profits of £8million, with maybe net profits of £3 million. That might be enough for eventually a dividend of 1p...in 5 years time or more. Forget seeing turnover at £50 million or more. It won't happen. I have been in the trade for only 35 years and have seen first hand the decline in stamp fairs, attendances at stamp clubs etc. The stamp business now is very much focused on either eBay or very specialised items. The mass market for stamps and albums is disappearing fast so I cannot see how SG can tap into a shrinking market. Given the above and assuming SG gets through this torrid period, what worth would you put on the company? £10 million, £15 million? At 4p a share the company is already valued at 7 million. I honestly cannot see this company being worth 10p a share for a very long time.

https://www.stockopedia.com/content/small-cap-value-report-fri-29-dec-2017-sgi-final-thoughts-290378/ Basically says shares are worthless. More falls on tuesday I guess. Still, happy New Year to all.

I am having another look at the figures as per the trading update. It confirms my initial thoughts that they are not good. The update states sales for the last 6 months were £16.6 million with a gross profit of 40%. Now we know interiors are now gone so reduce that by £3.1 million. Investments will be taking a hit because of the Guernsey liquidation so I would say reduce investments from current £6.8 million to around £4 million. We now have sales of £10.7 million or £21.4 million annually. If gross profit remains at 40% that means annual £8.5 million gross profit. Now looking at the expenses there were administrative expenses of £1.8 million plus selling and distribution expenses of £7.7 million over the last 6 months. That equates to £19 million in expenses annually. Even with SG's slash and burn policy, I doubt whether the expenses can be further reduced by more than 50% from here, especially as we have been told that £10 million in savings has already been achieved. there cannot be much more to cut back on. Frankly, a stamp business with an approx annual turnover of £21million could easily be run by a team of half a dozen philatelists/experts and a support staff of 20 which should be, in my opinion, what SGI is reduced to. Ringworm, you were absolutely correct in that I sold my main holding at 5.60p. I have not bought them back however and will not do so until someone can tell me how SGI can reduce its expenses to £4 million p.a. in order to make a decent profit and start paying back their loans at £1 million per quarter which the banking agreement demands. It just isn't feasible on the current figures. The only way forward is to sell some inventory (very hard as it is very overpriced) or sell some other asset such as Baldwin's and then profit margins tank. I know Pearls feels differently but the figures don't lie.

They have got rid of loss making areas, removed the investment liabilities which were amounting to £4m a year, slashed staff levels, however the 'cost' for doing this has been a significantly reduced inventory level, net assets down to £15m which is about 8p a share if my maths is correct. The market giving it the thumbs down at the moment.

On first read through it doesn't look too good. Slow trading and asset sale or fundraising next year.

The reason SGI are at 5p is quite simple. They have taken on a further £6.5m debt and a hit on their reputation in order to be rid of future investment liabilities. Presumably the bank will acquiesce and allow SGI to owe £23.5 million but that is one of the things the update may tell us. Furthermore, it is extremely likely investment trading will have taken a big hit which then leaves a problem of how to monetize extremely overpriced investment pieces, without slashing the price too much. I will leave speculation as to the value of the stock until the update, but I am sure it will not have gone up. General philately and auctions are trading quite well, but SGI are still saddled with an enormous debt and what I really want to know is how they are going to pay that off with a much reduced turnover. Maybe the update can shed some light, but I still think the bulb will be very dim.

If you bought at 3p and sold at 5.75, that's a pretty good trade if you are a small investor. I did buy more at the 3p level and have sold those now. I just think it has to be a pretty good trading statement to sustain a near 100% rise especially as there are so many questions as to the implications of recent events and I can see further stock writedowns ahead. I do think SG will survive now but see a long road to recovery ahead and don't thing the forthcoming statement will be as positive as some folks on here think. I am still a holder though so happy to be proved wrong.

General trading news seems very positive but SG will have to work hard to reduce the large stock overhang of very expensive investment pieces. I have just received an email stating all stamps now on a 25% discount. A good starting point but a 50% discount would be needed to shift some items. I can see stock writedowns in the offing and we will have to see how that bears out in the new figures. Happy xmas to all.

Appreciate all the things you mention about Gernsey, however what is unquantifiable is the hit to SG reputation and credibility, especially as investments was a large part of the turnover and profits and how this is reflected in sales of other areas of the group. We won't know for 6 months at least hence my attempt to warn of caution at least as far as general trading is concerned. My comment about the 399 premises is that the lease on the building expires in 2019 hence they will have to look around as I think the landlords want to redevelop the whole site. Please correct me if I have been misinformed.

Hi Pearls. I know you have presented an optimistic outlook, but I can't see 15p in the immediate future. I will take a guess that the update will show continuing slow trading. I am told they are already discounting all catalogues. Overstocked maybe? I also think there will be quite a big hit from the administration of Guernsey if not in these figures certainly the next ones. Of course I am happy with recent rises but the turnaround will be long and slow. There is àlso the issue of losing the prestigious offices in the Strand next year. And how are they going to attract ordinary collectors who can buy elsewhere at half catalogue price or less. I was also informed that they only get a percentage commission for all sales at Baldwins. Is that true? Why don't they have buyers out there scouring the country for saleable collections? SG must have the biggest collector database in the country and they are not using it...

A blatant and cynical attempt by the Board to keep the price down. Not surprised by this boards activities, they have no interest in stamps or collecting, just want to make as much as poss by as close as insider trading as they can get within the law of course.

clear U shape forming over the last month, looks like heading back to 7p as Pearls said. I don't think we should get too carried away however. A slow trading update might bring us back down with a bump.

Well let's hope so. It may well be those that bought at 3p have a very happy New Year. There is a very stong liklihood of SG surviving in my opinion. 4p is still cheap if anybody is considering taking a position. A leaner but profitable version of SG could be worth 20p a share but it is likely to jump to 7p 8p on the back of a good trading statement.

I don't think there will be much to influence the sp between now and the next update. There might be a few punters willing to take a position in the hope of a reasonable update. However any serious move in the sp will come from better trading figures.