Friday, August 10, 2012


Good morning! Outsourcing company Staffline (STAF) announces an acquisition of a Nottingham-based temping ageny for drivers. No details given on how much they are paying, so presume it's not material.

Stamp collectors Stanley Gibbons (SGI) puts out an OK set of interims, with sales down 2% and profits up 8% to 1.8m (sorry, using an old laptop this morning which has no GBP sign on the keyboard!). Strikingly, online sales are up 90%. EPS up 11% and interim divi up 10% to 2.75p. Balance sheet is strong, with lots of stock, as you would expect. Confident for H2 outlook - looks to be an H2 weighting to trading, so full year forecast is for 19p EPS, that puts them on a PER of 11.3 and a yield of 3% with shares at 215p.

Looks reasonable value, but who on earth still collects stamps these days? Surely it's a business that is likely to fade away over time? Sure they have an other collectibles division, but stamps are still their main business. It's not for me, as I really can't see a future that would be anything other than decline. Or at least the shares are likely to have that perception, meaning a rise in the PER is doubtful, and earnings are only rising at a fairly pedestrian pace.

Flybe (FLYB) puts out a trading update which seems to be a cunningly worded profits warning, but avoids actually mentioning the word profit! Revenue guidance is guided down, and lots of detailed KPIs are given, apart from the only one that matters - profit! They talk about cautious outlook, etc. It does however say that they expect to remain EBITDA positive. I don't like the sector, and hardly ever invest in airlines - too many moving parts, and a propensity for frequent profits warnings.

Titan International announces a recommended share offer for Titan Europe (TSW), which looks opportunistic & lowball to me (I don't hold the shares, but friends do). No real premium at 128p, and it's in shares, not cash! Will be interesting to see how this one plays out.

Software for car dealers, Incadea (INCA) puts out a trading statement that talks about contracts with BMW in India, Russia, VW in China, and other business in China. Not bad, for a 39m mkt cap company. A  big jump in profit is forecast by brokers for this year, which will take the high historic PER of 45 down to about 10. Looks potentially interesting, although I'd want to find out how much of the revenue & profits are recurring?

Interesting as a general point, that Incadea listed on AIM in May this year, and they state that their AIM listing has raised their profile and "has assisted in winning new business". Worth pointing that out to companies that are tempted to de-List - i.e. they can leverage their listing for sales & marketing purposes.

Massively indebted UK Coal (UKC) has announced an interesting restruturing arrangement where its pension fund takes over 75% of its property assets. I don't know the company, and it all looks rather involved, so I shan't comment on it other than to flag it up.

OK that's it, opening bell will ring in 1 minute, FTSE futures are down 12. Have a good day & enjoy the weekend!


  1. I had a look at Stanley Gibbons a while back and while they looked really good value I was concerned that the amount of stock they were holding was falling. There must be a finite amount of valuable stamps and if the amount they are holding is falling surely, eventually, this must hit their profits.

  2. Hi QG,
    I've spoken to a couple of friends about Stanley Gibbons today, and apparently they make their money from a small number of very wealthy collectors. A bit like antiques, the prices have gone very high in recent years as the nouveau riche from emerging market countries out-bid each other.
    Am not convinced that will last forever - could be a bubble that could burst, who knows?
    Cheers, Paul.

  3. OT, but if you could get some of the tickers into the blog entry title (?delete '2012- Morning report'?) then it would look more interesting on Twitter and the previos reporstd thids week would also be more likely to be clicked on in the Left Hand Side box....

  4. Sara, That's a great idea! I agree with you completely, and will try that out next week - give me a prod if I forget!
    Thanks for the suggestion! :-)
    Cheers, Paul.

  5. I always thought that UK Coal have pretty okay future considering that sooner or later, coal itself will be priced higher and thus more profitable. There is always that element of sustainability. Providing coal's emissions are locked up or removed in such a way that it would not affect the atmosphere, then really, it is an excellent resource to use and there are still considerable amount of coal left in this country. But alas, this is not to be I guess.



  6. Hi Paul,

    Stanley Gibbons are trying to build up stamps as an "alternative investment". I've no idea how successful this has been but it doesn't just rely on collectors.

    Regards David

    (note this is a 2010 article)

    "But today Gibbons, which has been through a series of management changes, is telling a very different story. Its website claims that stamps are "Safer than houses, more valuable than gold". It says that rare stamp values have risen 11% per annum over the last 40 years. Stamps are described as a "safe haven investment"."

  7. Bubble territory IMO. .No asset.out-performs forever!