Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Very good, thanks for the link.
They come across well - transparent and 'on it'.
I bought in a fortnight ago and after watching the presentation I'm glad I did.
Fully agree.
No reason why this shouldn’t keep growing and growing.
SUP has been on my watch list for while and although FMCG doesn't feel the obvious sector to be in at the moment, yesterday's dip and last week's IC recommendation was enough t to persuade me to watch this video. These are two impressive, entrepreneurial individuals who I am inclined to believe have a bring future ahead. Definitely recommend checking it out. This was enough to tip me towards opening a small position.
#SUP - if you missed the live event, check out the full video recording here of Supreme plc's investor presentation following their recent Trading Update.
Sandy Chadha (CEO) and Suzanne Smith (CFO) examined the growth picture for Vaping and the impact of inflation and raw material cost increases across the business especially in Wellness & Sports Nutrition. They also dipped into their outlook for FY23 as well as considering likely area for future acquisition opportunities.
There was a detailed Question & Answer too that you can watch in full here: https://www.equitydevelopment.co.uk/research/supreme-plc-investor-presentation-post-trading-update
https://www.telegraph.co.uk/business/2022/04/24/britain-decides-big-tobacco-should-help-kick-habit/
Yep Smellyben, all on track and BoD very forward looking in terms of expansion and focusing on acquisitions as well as pushing current business. As was thought by most here that the inflation problems will not only affect SUP, but the entire sector... and as far as BoD is concerned the business impact is minimal. Quite impressed with the presentation, and i'm sure the Equity will have it on their Youtube channel soon.
Anyone catch the update ?
RNS is out regarding
thank you
#SUP - save the date! 22nd April Investor Presentation post recent Trading Update
Supreme (AIM:SUP), a leading manufacturer, supplier and brand owner of fast-moving consumer products, will be conducting an Investor Presentation webinar following the recent publication of their Trading Update for the 12 months ended 31 March 2022.
The presentation will be hosted by Sandy Chadha, CEO, and Suzanne Smith, CFO.
The event will take place at 12.00pm on Friday 22nd April.
The online presentation is open to all existing and potential shareholders. Questions can be submitted during the presentation to be addressed at the end.
Register here: https://www.equitydevelopment.co.uk/news-and-events/supreme-investor-presentation-22april22
*rather than
Think you're missing the point, concentrate on the underlying facts of the business and RNS rather who's put it forward. It's not a Blasé statement/post.
So, an unnamed investment manager for an unnamed private investment company? Hmm, ok thank you.
Anyway, I've stuck just a little bit in here. Let's see how it goes. I think there's value at the current price but that's not to say in these febrile times it won't fall further!
Private Investment Company, outlining the facts under a stringent inflation environment where the company have taken steps to overcome. The business model overall is very profitable and tbh I've no problem holding here for a while as I see common sense will prevail.
But who is this investment manager on Linkedin, anybody know?
I just bought 20K shares at 155. First time I have owned this share.
Now. It is not very often that we will revisit information about a shareholding where we have interests, but in the case of Supreme Plc #SUP, which I noted yesterday their trading update yesterday, we will do so.
The share price dropped around 16% yesterday and not sits around 157p this morning. Smaller investors in this business appear to have misread the long term prognosis. Thankfully, this has presented an opportunity that we had no choice but to exploit yesterday and we added significantly to our investments here.
A wise Investor once said that the Stock Market is a device for the transfer of money from the impatient to the patient.
Firstly, analysts at Equity Development reminded investors that the update indicates FY22 performance in line with their forecasts and revenue estimate of £130.0m is revised to £130.4m.
They remain fundamentally positive for growth prospects in Supreme’s leading Vape division where they expect the contribution to gross earnings to have risen from 45.1% in FY20 to just under 60% by FY24, propelling an increase in total (pre-forex) gross margin from 28.0% to 30.5% over the period. Importantly, their fair value remains with our own view point from 230p (Equity Development) to 250p being our 2024 view point.
The whole focus of a shorter term view seems to anchor around the 46 per cent spike in the cost of whey protein concentrate in the 12 months to end January 2022, and general cost inflation (transport and wages).
Longer term, we think of the investment case around Supreme’s vaping brand, 88vape, the market leader in the UK with a 30 per cent market share, this delivered 10 per cent sales growth in the latest financial year to account for a third of group revenue and an estimated 53 per cent of gross profit and is set to continue rising.
The performance was buoyed by new listings in Sainsbury’s and Morrisons, as well as ongoing organic growth across other discount retailers. The directors are guiding investors to expect the double-digit growth for this category to continue.
Also, no attention was paid to the batteries and lighting divisions.
Supreme sells globally-recognised brands such as Duracell, Energizer and Panasonic, and supplies lighting products exclusively under the Energizer, Eveready and JCB licences across 45 countries. Combined these two segments account for a third of group gross profit. This requirement is not going away any time soon and demand will increase through certain segments.
Missing factors in short term investors minds are that adjusted pre-tax profit and earnings per share (EPS) will still both increase 8 per cent to £19.3mn and 13.5p, respectively, thus underpinning forecasts of a 7.3p a share pay-out.
For us, the shares are rated on a forward PE ratio of 11.6, PEG of 0.3 and offer a prospective dividend yield of 4.6 per cent. The £8.4mn cost of the dividend is covered more than two times by £17.9mn (15.5p a share) of estimated free cash flow.
"Mild profit warning" is the phrase used by one analyst today. But also ends with a thumbs up (Paul Scott).
Here's the line in the trading update that triggered today's fall:
" . . . However, this performance will be tempered by commodity price inflation within Sports Nutrition & Wellness and the increases in the overhead base relating to wage and transport costs . . . "
Thing is, there isn't a company in any country, anywhere in the world today, that isn't facing that challenge, hence the 'mild profit warning'.
However, the pullback in the SP is anything but mild and is the full monty reaction to a traditional profit warning RNS.
Should the SP drop into the 140's, which I think could be the case, that would take it right back to the lowest SP ever - when SUP was floated back in early '21.
So will take the first bite if 140's float up on the screen. Why only a first bite and not go all-in?
1) The SP launched into a sustained retrace almost upon enterinmg 2022 by falling from mid-January consistently - and still hasn't ceased retracing. If this big drop today (which mirrors a traditional profit warning reaction by the market) then that means the SP could become moribund for a full year - if it now behaves as other profit warning-hit stocks behave.
2) What if it goes even lower than the 140's?
By buying only a first tranche that leaves room to top-up on any deeper pullbacks from here on.
At this price the dividend jumps from the 3% divi area to a well over 4% dividend and adds a whole new positive to the buying case.
Limited numbers in the update because the full reveal isn't until July, later this year.
However, I also have the revenue figure that market guidance is looking for and that is £130m for the full year and in this update we were advised to expect:
"The Company expects to report revenue in excess of £130 million"
- Quote: "In EXCESS" !
That'll do :)
No mention of net profit but market guidance is/was looking for £ 13.7m
So a fair chance of achieving that seeing as revenue is expected to be "in excess" of previous guidance. A pity the market didn't pick up on THAT line instead.
Over 70% of shares in sticky hands, and the CEO Sandy Chadha alone holds over 50%. Wouldn't be surprised to see more director purchases come through taking advantage of this fall in sp.
Worth calling out 92% excellent versus 63% excellent:
https://uk.trustpilot.com/review/sealions.com
https://uk.trustpilot.com/review/www.hollandandbarrett.com
Pay triple and get the 2nd one for a penny!
I'm not sure they are allowed to discuss their research notes Nkhatt. But they do give you the answer in their note: "We have revised EBITDA outlook from £21.5m to £21.2m to reflect the impact of commodity price inflation in the Sports Nutrition & Wellness segment" (just over a 1% reduction of a growing forecast future profit..... Hmmm yeah that's a good reason the shares should cost 20% less today - NOT!!)
I've managed to top up at £1.56 just now. What the market hasn't appreciated here is cost inflation driving costs up and also wages up supports Supreme putting prices up to absorb those costs.... in other words the net impact on Supreme could be negligible beyond the "shoe leather" effect on managing the changing prices as well as any delays in passing on prices (e.g. any prices negotiated with customers for X period of time) i.e. the 1%
Supreme's products are more at the "value" (and defensive) end of the market so if anything any slow down (dare I even say the word recession) could drive much higher sales.... I'm a regular Sealions customer and have been impressed by their marketing and efficient customer service. The same vitamins are for sale at 4 or 5 times the price at Rip Off and Bear Hat! And it just gets better and better. Supreme's main "wellness" competitor is owned by a Russian Billionaire. https://www.theguardian.com/business/2017/jun/26/holland-barrett-sold-russian-billionaire-mikhail-fridman
Hello, what is your basis for reducing EBITDA estimates by 8% in 2023 and 6% in 2024? The trading update provided by the company is pretty limited
New research note - full link to report here: https://www.equitydevelopment.co.uk/research/trading-update-growth-propelled-by-vaping
In a Trading Update for the year to 31 March 2022, Supreme PLC reports that it expects revenue of above £130.0m and EBITDA (adjusted) of no less than £21.0m based on strong organic growth in its core segments, augmented by strategic acquisitions. The Group expects continued profitable growth in FY23 driven by demand for its Vaping division products, partially offset by commodity price inflation impacting Sports Nutrition & Wellness division.
• The update indicates FY22 performance in line with our forecasts; our revenue estimate of £130.0m is revised to £130.4m. We have revised EBITDA outlook from £21.5m to £21.2m to reflect the impact of commodity price inflation in the Sports Nutrition & Wellness segment (12.1% of FY22 estimated revenue). Vaping remains the mainstay of performance, where Supreme expects to report 10%YoY growth in FY22 (33.4% of ED estimated revenue: 52.8% of ED estimated gross contribution) backed by the addition of Sainsbury’s and Morrisons to its customer base. The Group highlights 2%YoY growth in the Batteries division (26.4% of FY22E revenue) and +5%YoY in Lighting (20.9% of FY22E revenue) with gross margin improvement.
• For FY23 Supreme highlights “double digit” growth prospects in its Vaping division. Despite FY22 growth in Sports Nutrition & Wellness revenue of over 130%YoY(E), profitability in this division was impacted by a combination of the increased price of whey and additional wage and transportation costs.
Changes to estimates and medium-term outlook
• We remain fundamentally positive for growth prospects in Supreme’s leading Vape division where we expect the contribution to gross earnings to have risen from 45.1% in FY20 to just under 60% by FY24, propelling an increase in total (pre-forex) gross margin from 28.0% to 30.5% over the period.
• Our positive outlook for Vaping offsets near-term pressure on the Sports Nutrition & Wellness segment so that our revenue outlook to FY24 is unchanged. Our FY23 EBITDA (adj.) outlook is £22.0m from £24.0m, an 8.2% reduction, and in FY24 6.6% lower, taking a conservative view on the medium-term trends in energy and commodity prices which have already impacted a broad range of sectors. Taking these factors into account we adjust our fair value to 230p/share.
ACQUISITIONS DRIVING SUPREME GROWTH
Insider Media - Manchester
Manchester-based manufacturer, supplier and brand owner Supreme expects another year of profitable growth as it eyes up further acquisitions.
The company said it remains "fully focused" on driving organic growth, closely balanced with strategic acquisitions, after agreeing a new £25m RFC facility with HSBC in March 2022.
In a trading update for the 12 months ended 31 March 2022, the business noted that it anticipated revenues in excess of £130m compared to £122m in 2021.
It expects to report an adjusted EBITDA of no less than £21m for the year compared to £19.3m in the prior period.
The business said it "performed strongly" throughout FY22, driving organic growth across its core categories. It also said it completed two strategic acquisitions financed by free cash and established product traction with UK grocery customers.
Looking ahead, the group expects increasing levels of cash generation, predominantly driven by Supreme's strong Vaping sales footprint.
However, it said this performance will be tempered by commodity price inflation within sports nutrition and wellness and the increases in the overhead base relating to wage and transport costs.
"Management has already taken steps to mitigate the external factors, including buying forward whey, and will also be continually reviewing potential price increases and ongoing manufacturing and distribution rationalisation," it added in a statement on the London Stock Exchange.
"The board remains confident that the group will continue to deliver both organic and acquisition led growth this financial year and beyond."
Supreme will publish its financial results for the year ended 31 March 2022 in July 2022.
Actually reading the RNS again... I REALLY cannot see the reason befitting a drop of this ... few days and it'll be recovered, IF not by todays end.