Member Info for CarpeDiem1

Pearls First apologies for my name apparently being a rude word...not intentionally. One of my main points was that stock value is shrinking but debt is not falling at the same rate. This indicates that it is being sold at a much discounted level to generate income and pay off the bank debt. It is hard for me to analyse from a balance sheet exactly what discount is being applied, but it might cost SGI £30 million in stock to pay back the £17 million borrowed. Only when that happens will it be possible to put a realistic value on SGI. I do accept that there are other incomes, and expected staff savings in the pipeline, but there are also other expenses in the pipeline such as legal fees and accountancy bills for sale of Interiors, a generally declining market and so on. In summary I still do not expect SGI to turn a profit next year and the following year only a small one, so we are looking at a 24 month turnaround into actual profit. But who knows what the state of the stamp market will be by then, or what the quoted stock level of SGI will be. Those are my concerns, but glad to have this debate with you.

Ringworm, your quote: "Its great to see that BOD is not trying to mislead investors, and 10 Million NAV is net of all current liabilities and after reappraising the stock. The profit margins are good, and with almost 50M in sales this year expected, I would hope to see some bank loans being repaid and a return to profits at next interim statement." May I ask where in the report it says £50m in sales this year? I may have missed it, but I cannot think this is likely. Sales this year were £42 million but strip out the £8m from Interiors, now sold, and about £2 million from Apex, now closed down its looks to me like sales will be £32 million and that is without taking into account the declining stamp market and reduced stock levels which inevitably will impact on turnover. Sorry to throw a stinky into the debate, but I am just trying to figure where they will get an extra £18million turnover from with a much reduced Group.

Correction to previous posting I said bank debt had fallen by £8 million this year, but it has only fallen £5.4 million.

The money from the interiors division sale will give the company some liquidity going into next year, however I despair over the continuing overvaluation of the stock, which is the real sticking point in any takeover offer. I had a quick look on the SG website and did a search by value. The first 50 high priced items come to over £10 million pounds. These items are not going to appeal to collectors and they are not selling to investors either. The high value pieces are static items. The value of Philatelic rarities as quoted on the accounts is £31 million and total investment sales for 2017 was £18 million with a profit of under £1 million. Not a great return and severely hampered by the buyback investment scheme. If you look at the profits generated by Investments, Baldwin and publishing, its only £2 million. Given that the stock is not turning over that quickly it is going to take a long time to turn this around, even if they do manage to sell some stock to pay down the bank loans. If you look at the stock levels, group owned stock value has dropped by £11 million , the company has sold off various portions of the business, but bank debt has only fallen by £8 million. Profits alone will not reduce bank debt quickly and stock is not being sold off quickly enough either. There is undoubtedly value in the name, heritage and pedigree. Buy all means buy at 8p and sell at 10p, but the numbers are against SGI as a long term turnaround. I do hold shares here, but give me 10p please and I'm out.

I do agree that at 7.75p it is a tempting buy on the hope of a 24 month turnaround.

SGI still reeling from gross mismanagement over the last 5 years. The turnaround effort is admirable, but still saddled with large loans and overvalued stock. It is possible that SGI can get into a much better position in 5 years time, but only if the stamp market holds up. They have lost so many staff the company is a shadow of its former self. Also, their lease on 399 is up in 2019. This may save them considerable costs if they are able to move to Ringwood.

There is no easy answer to catalogue pricing. If SG reduces the cat price to 'realistic' levels that would, in the minds of collectors, totally devalue their collections. SG has benefitted in the past from rising catalogue values so I think reducing them suddenly would do considerable harm to the market. However any collector with a bit of sense knows you can buy straightforward stamps for a fraction of cat. I had a quick look on ebay this morning. One can buy a sound GB QV 1s green plate 4 for 99p. Cat price is £200. If you wanted a superb cds example its £50-£100. Pearls is correct that cat delays are often as a result of staff shortages. Phillip Kinns reprices a lot of the catalogues but he is extremely busy of course. Personally I use the Scott all world Classic catalogue, to 1940 which lists unmounted issues as well as hinged, something SG ought to do, but doesn't.

I'm not sure the ship is sinking but it has definitely run aground. There are aspects of SGI that are profitable such as publications, Baldwins, investments, however the company is seriously compromised by the overly generous investment buyback scheme which has resulted in today's seriously overpriced stock. Getting rid of staff is all very well, but how much money is going to unnecessary directors, accountants, money men, pen pushers and zombies who contribute little or nothing to SGI profitability. SGI will not survive in its present form and I do expect the group to be broken up. What that will leave in the way of debt is unclear, but if you knock £20 million of the current stamp inventory valuation and recalculate the NAV you will reach a truer figure of SGI's worth. Best of luck to all of you.

Are you sure SGI owns the freehold of 399 Strand? I could not see mention of it in 2016 accounts, perhaps you can say how much asset value SGI attributed to it?

The next trading statement is likely to show increased profitability but with lower sales again. SG have been shedding staff and merging departments in a huge turnaround effort, however it is difficult to see how they can manage to increase sales with many fewer staff in a (generally) declining stamp business. The question is whether one should buy into this 'recovery' even though the stamp business is shrinking. Short term I would say yes. If you can buy for 9p now and sell for 11p or 12p in 6 months thats a good trade, however as a long term investor there is a danger that there will be further cash calls in the future, and that is the reason I won't be investing at this time.

I remain sceptical whether there is a turnaround. There is certainly a lot of cost cutting with the Apex division being closed down and the staff being made redundant. I also hear Baldwins may be sold off separately although I am not 100% about this information at present. I get the feeling that all of this merely services debt and keeps the banks happy rather than being used for investment in the business. As I indicated in previous postings, SGI will not survive in its present form and I strongly doubt there is a buyer in waiting at this share price let alone 20p. Still, by all means have a punt. Investors love takeover rumours so a canny trader can make money here.

"Notwithstanding the turnaround in Baldwin's, overall Group trading remains subdued; in particular sales of rare philatelic collectibles to high net worth clients are slower than expected." Selling off the loss making businesses is a plan, but the core stock inventory is still too large and too expensive. I expect further hefty write downs of this stock in the future which will impact hugely on the asset value. Are the remaining "core" businesses making a profit? I hope they are but I have my doubts.

I have been looking at the results and I am not really convinced SGI is a worthwhile buy at the moment. My calculation for NAV taken from the figures is £45m net assets divided by 179m shares gives 25p NAV. However in the results the stamp stock is valued at £40m and what is the real price? Maybe £20m? Lets recalculate NAV from a new figure of £25m assets having taken into account our stamp stock reduction. We come to 14p NAV, or indeed slightly more than the current share price. Why do I say the the stamp stock is worth less than the quoted figure? Well I think this paragraph of management guff says it all. "Philatelic sales are £0.8m lower than the restated figures for 2015, largely reflecting the more difficult market conditions. The trend is largely consistent across all of our retail and auction business with the GB division being the most impacted but the underlying demand remains strong." I cannot see how underlying demand remains strong when "Philatelic sales are .... lower....across all of our retail and auction business". In fact about 20% lower. And this trend is continuing as I can testify (being in the trade). I could not find any provision for buy backs for the investment scheme in the figures either. I wonder what the liability there is too? Perhaps SGI should dump the philatelic divisions and just become a coin dealer called Baldwin-Noble. Ah well.

I'm happy to let this one go.

These results are exceptionally poor, with reduced profits in every department. I respect the management embarking on a massive cost cutting and retrenchment strategy, nevertheless this write off cancels out 10 years of profits and frankly in a somewhat stagnant philatelic/collectibles market this may not be the end of it. I am particularly concerned whether sufficient funds have been put aside for the investment buyback scheme (or pyramid scheme as I prefer to call it). How much was put into this scheme between 2005-2013, does anybody know what the full liabilities are?

The market pricing in a possible US interest rate rise in September thus strengthening the dollar. Stronger dollar is bad for commods.

Its seems as if the mm's dropped the price to release some shares from holders with stop losses set at just under 10p, which have now been sold. I did suggest we could see a drop to under 10p, There does seem to be more concerted buying so will be interested to see if this trend continues this week. If it does that might be a hint that the results are not too dreadful... Hope springs eternal.

It is tempting to cash in but gold is in a sweet spot just now with negative bond yields, low interest rates and capital flowing into the stock market. Having bought a large tranche at 25p.... I do not want to sell up too early and miss another 50 or 100 points. I can see gold reaching close to its high or even surpassing it.

The lower exchange rate is undoubtedly helping SG sell some of its stock overhang. I am not surprised at the increased level of inquiries from overseas clients this week. I can also say that several good overseas clients of mine have suddenly made inquiries this week in my business after an absence of several years. On the subject of delayed report. This is not usually a good sign, although anecdotally I have not heard anything which contradicts their statement. We will have to wait but this uncertainty is feeding through into the share price so I can see the possibility of sub 10p soon, if only for a short while.

Slowbutsure I just tried it no problems. I didn't have to log in and could browse 2000 coins without problems. Sounds like some sort of popup on your computer. Get adblocker mate.