Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
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Supreme PLC (AIM: SUP), a heavyweight in the fast-moving consumer goods arena, has triumphantly announced a stellar trading update for the fiscal year ending 31 March 2024. This sets the stage for a highly anticipated audited financial results reveal scheduled for 2 July 2024.
Supreme has reported an eye-popping performance for FY24, doubling its Adjusted EBITDA to a minimum of £38 million from the previous year’s £19.4 million and propelling revenues from £155.6 million in FY23 to around £225 million. This notable ascent in profitability is complemented by Supreme’s ability to conclude the fiscal year debt-free while generating unprecedented cash levels.
https://smallcompanychampion.substack.com/p/surpeme-plc-fb3
Yep - It’s bigger now on every front than when the SP was 240p a couple of years back. The 220p rating makes complete sense. What doesn’t make sense is how the SP can below 200p
In a Trading Update for the twelve months to 31 March 2024 Supreme expects to report revenue of c.£225m, and (adj.) EBITDA of at least £38.0m, in line with market expectations, which had been revised upwards during the course of the year and represents almost double the FY23 level. The Group closed the year debt free.
Our outlook highlights the extent to which Supreme has expanded, through both acquisition and organic growth during the period. From 2020 to 2024E the Group will have grown sales by 144%; Vaping +3.9x and all other Business Categories outside Vaping (Batteries, Lighting, Sports Nutrition & Wellness and Branded Distribution) +31%. Notwithstanding the impressive growth track record to date, the Group remains committed to complementary acquisition opportunities.
On the same basis, FY20-FY24E revenue will have grown at a 25% CAGR (FY20-FY25E, 20% CAGR) and (adj.) EBITDA at a 24% CAGR (FY20-FY25E, 15.1% CAGR).
The update shows the scale of Supreme’s growth in recent years with FY24 backed by organic revenue and profit growth across all divisions. Comparison of our FY25E outlook with a group of (18) companies representative of each of Supreme’s core Business Categories highlights the Group’s relative discount on a FY25E EV/(adj.) EBITDA 4.2x multiple compared to an overall average of 11.0x. Our Fair Value remains 225p/share, indicative of 7.5x FY25 EV/EBITDA.
Link to report: https://www.equitydevelopment.co.uk/research/trading-update-highlights-scale-of-growth
U can fit a bus through that spread.
People are converting to vaping as it’s more pleasurable, doesn’t make your wallpaper go brown, better for your health than combustibles. Vaping will overtake combustibles within a few years, enormous market potential that Supreme are just scratching the surface off. Their other divisions are generating record revenue also as published. I topped up after the panic at 101p and see no reason why we won’t be back over 200p again soon. After all SUP is now generating way more revenue & profit than anytime in its history. We also have wise use of excess cash to do share buy backs. Supremely run company.
Quite rigjt!
Tax on beer and ciggies is fundamentally designed to raise revenue not kill sales which lead to decreased rax revenues. If that's what the Government did want (to limit use) they would ban it altogether. We know the NHS is keen on vaping as it is less costly than health problems with traditional combustible tabacco products
I don’t think the vape tax will make that much difference.
Not a smoker (or vaper) but prices of cigs go up a lot every year and people still buy them…
He taxed Tobacco.
I saw this deep in the red today with the vape tax, but so far its calm.
Vape Tax announcement today by Jeremy Hunt, finger crossed it is very low.
Monty i completely get the idea of 240p if the disposables were not banned, however as my research has shown to me, almost everyone who was smoking disposables last year has stopped, the attraction was the unique lost mary flavors and the huge growth. £225m rev minus disposables £75m retaining 15% gives me £161m rev £22.5m ebitda £14.8m net pe 8 100p 12 152p. I think the market is saying 135p is about right for this as it stands. Im n ot sure why the broker is making such a hash of the buybacks, simply defend the 100p area with all the funds, not buying back then seeing a 20% drop, looks a bit frantic to me.
Point being vaping is replacing combustibles regardless of tax for adults etc. Check out BATS and IMB’s updates it’s all vaping so big tobacco is becoming big vaping
Clarity on the damage will be hard, as long term prospect is getting worse in the vaping industry.
It is worldwide, 1st taxes then flavor ban. Big Tobacco will win, it is not a question of ifs but when.
I spoke with the manager of my local vape shop and he was telling me Scotland will ban disposables by 2026 and taxes will come by 2030 in UK. Both news now a reality...Discussions was 8 days ago.
I agree, the downward sentiment is persistant, with measures to curtail ads,
https://news.sky.com/story/vape-ads-on-social-media-need-to-stop-as-regulator-announces-crackdown-13083389
However, when all this passes and there is some clarity on the damage, this share should bounce back. Will have to wait till annual results to understand how much revenue and profit is lost and the plans to recover and growth.
Yes will load up more when it drops below £1.
So much risk around tax and the perceived hatred of vaping - That is what is holding this share back IMO.
I am a fan and have worked with them a few years ago so really do believe in the company - They are my largest single stock holding by far!
Load up on cheap shares I guess - I can see this drifting back to under £1 in the run up to the budget with the Vape tax fear...
The company consistently delivers and share holder and investor friendly (Not like THG). It now generates better top and bottom lines than when it was 240p per share and is doing share buy backs as well. I have respect for Sandy and BOD but find it really to hard to understand how SUP is languishing at 115p only half what it was even though it’s exceeding on all metrics especially EPS when next results are out. Sunak & Hunt needs to add some value to our country and open the UK markets to foreign investors that don’t have a UK address to sort this out or we will continue to trade on the lowest P/E’s in the Western world
This is bad news, nobody expected a tax now. Anything between £1 to £2 per 10ml liquid can happen.
Not expected this to be implemented... I don't think the industry was expecting this as well.. Sandy did say it is not expcted with NHS distributing milliions of vaps on one hand and taxing them on the other...
https://www.thetimes.co.uk/article/jeremy-hunt-cut-national-insurance-income-tax-inheritance-stamp-duty-k9tx63rfq
I think where I am going wrong is that this isn't a direct investment such as an acquisition, it's just buying ELFBar stock which will be sold down to generate that gross profit.
So yeah, I think I'm definitely wrong with the below calculation.
Thanks!
Joker - Thanks for clarifying the gross profit thing, let me go through where I got all this from:
The £16m is from this timestamp, 23:40: https://youtu.be/c2Kq5hBN64Q?t=1420
It says £16.4m for ELFBar only for H1 24, it seems it's not just stock that the investment was for.
Judging from what the CFO said, it seems like this is one time thing, ELFBar is projected to produce £6m in Adjusted EBITDA1 for the next FY.
It seems like supreme has net profits around 61% of the Adjusted EBITDA1 metric
Converting this bs ebitda metric to net profit = £3.6m of net profit in the next FY from ELFBar.
The ban on disposables comes in on 2025.
So let's say they have 2 years of profit before they get banned and a surge in profit just before the ban.
Current: £3m~ profit (what they have already received from ELFbar)
Year 1: £3.6m profit (as stated above)
Year 2: £5m profit
Terminal: £0 due to it being banned
So that's a Net Present Value of £7.46m with a 10% discount rate.
£16m investment for a return of £7.46m is obviously value destruction. The above seem to be optimistic projections too for ELFBar.
What am I missing here? Any possible way I look at it means that a £16m investment for this little cash flow over a small amount of years is terrible for Supreme. Obviously it's great for ELFBar as they need to pump out as much $$ as possible before getting banned.
Lemonade - the £2.4m gross profit you refer to is not a full year - that was at H1 when Elf products had only been sold for a few months. Also, where have you got the £16m working capital investment figure from? Look at the total stockholding at the end of H1 of £30m - you really think half of the stockholding would be Elf? An initial investment into Elf stock would have been made of nowhere near that amount and then ongoing revenues from that fund further stock purchases
And that's £2.8m of gross profit, not net, so much worse in reality.
Especially when it will generate only 2 years of cash flow before being banned
A £16m investment to get a return of £2.8m isn't a good return.
Interesting. Why do you think disposables have higher margins given their anatomy? What gross yield are you looking for from the Ark acquisition? 17.5% currently but you're right that could drop. Lets say it drops by 20% that's still a 7% running yield.