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Agree over done drop, there's growth here... and like said, aside from a few negative lines, there's no need for it to fall to this level.
Equity Developments
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.
Topped up this morning. Things seem to be getting hammered every time results or an update are not completely positive in every way. Overall it’s positive news today with just the odd negative comment.
Great buying opportunity today. A positive trading update with revenue and profit growth but a warning of future cost inflation (shouldn't be a surprise to the market?!!!!) has led to a sharp decline. Unwarranted in my opinion.
Spotted this share following Rosner in IC. Missed buying opportunity when stock jumped to 240p. Will loading up at these prices. Lovely
Markets in freefall? Threat of war across Europe? No funds, trusts or shares are immune from collateral damage.
Unbelievable. Drop on no news!
Any ideas? Fundamentals are solid and should be fairly recession proof. #confused
Supreme plc, a leading manufacturer, supplier and brand owner of fast-moving consumer products, conducted an Investor Presentation following publication of their Interim Results to 30 September.
Sandy Chadha, CEO, and Suzanne Smith, CFO introduced investors to the key investment highlights of their company, and provided a detailed Financial and Operational update.
They discussed each of their main product categories – Batteries, Lighting, Vaping, Sports Nutrition & Wellness – their investment in product development, increasing their premises to facilitate growth, and upcoming ad campaigns. They also answered a number of investor questions ranging from premises location to gross margins, ongoing opportunities in Vaping (including with the NHS) and recycling.
The full video recording (approximate length 69 minutes) is below:
0:37 company introduction (Sandy Chadha, CEO)
6:20 key investment highlights (Suzanne Smith, CFO)
11:44 Half Year 2022 Financial & Operational highlights
14:58 Financials
26:14 Operational update
40:51 Question & Answers
Link: https://www.equitydevelopment.co.uk/research/supreme-plc-investor-presentation-dec2021
Amazing results and solid maiden dividend, growing cash and very well run. It’s a total shock to me on a market update and these results we are not through 200p and off. I bet we are after the investors briefing tomorrow - Great well run company, ticks all the boxes for me.
Maiden H1 results from Supreme confirm strong progress driven by organic growth, bolt-on acquisitions, new products and new customer wins. The scaling of its manufacturing, a clear point of differentiation, is behind the margin improvement and evidence of a strong, entrepreneurial management team. The outlook remains positive and an interim dividend of 2.2p has been proposed. The company is profitable, backed by cash flow and has plenty of top line growth potential, with management delivering both strategically and operationally.
We set our current fair value at 250p per share. We see this underpinned by peer group comparisons and separately supported by the inherent value that resides in the Group’s Vaping division, reflecting the significant amounts of cash that ‘big tobacco’ is spending on solutions, particularly those that are resonating as well with the consumer as Supreme’s offering.
https://www.equitydevelopment.co.uk/research/leaving-the-competition-behind
Thanks for arranging that, Chacha.
From recent interviews , its clear that SCI -MX is bedding in nicely and was profitable from month 1 .So that's a big tick , hopefully the excellent CFO, will be more inclined to call it acccretive now and rise guidance for the full year. Sandy called this his 'best ever acquistion'. That's a huge statement and I'm expecting big things now its bedded down.
The 2 questions are clearly supply chain issues and the effect of Whey prices on margins.
Quite honestly, with Sandy's experience over the years, I'd expect him to have supply chain issues well under his control and whey prices have been high for a while so hopefully he can mitigate going forward.
Sandy has been very bullish on prospects and I would hope he can raise guidance next week and actually , I believe, guidance from Berenberg was conservative at just about 10% revenue increase for the current year. Time to start delivering , Sandy, and show you are well ahead of the curve !!
I'll ask a few questions at the presentation but if you can get prison contracts for vaping, you must be first in line for any NHS vaping ones. Also , lets hope Millions & Millions is getting some serious traction at the retailers.
Roll on next week.
Supreme (AIM:SUP), a leading manufacturer, supplier and brand owner of fast-moving consumer products, will be conducting an Investor Presentation webinar covering their interim results for the six months to 30 September 2021.
The presentation will be hosted by Sandy Chadha, CEO, and Suzanne Smith, CFO.
The event will take place at 11.00am on Wednesday 8th December.
The online presentation is open to all existing and potential shareholders. Questions can be submitted during the presentation to be addressed at the end.
Sign up to register here: https://www.equitydevelopment.co.uk/news-and-events/supreme-investor-presentation-dec2021
Hi there - yes indeed, you can sign up here for the event on 8th December at 11am: https://www.equitydevelopment.co.uk/news-and-events/supreme-investor-presentation-dec2021
Chacha,
Will you be doing a presentation at the interim results next week which we can listen to and ask questions ?
Thanks.
well worth a listen re: Supreme
https://capitalemployed.fm
onboard :).
That is why i just got interested, knew nothing about this company but after a bit research decided to jump omboard.
Regulator paves way for NHS e-cigarette prescriptions in England
A terrific trading update but still not much love? With an update like this I expected at least a 10% jump!
PS.
" So, if it falls any further then . . . "
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Sorry, forgot to say, as the SP is at the 50% Fibbo support level currently, it's entirely possible that this could be the floor for the SP where it is right now.
Which leaves you back with "if" - if it falls any further from here :)
Been awhile since I checked in here and what do I find? The SP locked in a vicious pullback; any longer and it’ll be a full blown retrace!
(Net profit at the annuals is a cool £1m down against last year's results; market disappointed?)
This bear downtrend is quite committed.
So where will the SP bottom out?
Guesswork now, but it’s currently (and coincidentally) at the 50% Fibonacci level if you give credence to such things.
So, if it falls any further then the next Fibbo level is in the 172 area.
And should it not be finished there, then the next level is further down at the 158’s.
Initially should the SP find the floor at the next level @ say circa 172’s then I’ll consider an initial part-tranche buy, but only if the trends turn to the upside first which means buying in the 172’s will be out of it, and I’d most probably only get bullish trend signals maybe several pence higher.
We’ll see.
Vitamins and made in the UK. As are the vaping liquids. They even manufacture their own bottles in the UK. There are very few manufacturers with as little exposure to freight prices as SUP. I honestly can’t understand the SP weakness.
Stock price has gone down a bit on no news. Wonder if the the supply chain issues have hit the company.
All quiet on here. Must be in before the herd ;-)