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Having a little breather after such a big bounce….B
Now the Chairman get involved - he follows his CEO's buys with a 50K share purchase in 3 tranches last week. Highest price paid: 103p.
All good.
Could be right rocket…. Going up nicely. B
I`m holding mine as will be back to £ 1.50 range + within a short period.
Pound beckons… nice bounce from my 71p purchase….. now what?…B
looking very good from a shareholders point of view , only have a couple off good aim shares .Frontier developments and this ,a nice uplift for both should be on the cards .
Fingers crossed
CEO opens his wallet again and buys 250k shares to add to last week's 500k.
97.5p a share paid this time. Nice.
Dunno but nearly 80% of the shares are held by sticky fingers… of which the ceo has nearly 60%…. Shows how retail can create big swings here with their 20%…..B
RNS says he now owns 57.13%
Is he looking to take this private?
Interest completely dried up ......so now the herd has moved on, hopefully a slow and gradual climb back above £1.....B
CEO made a meaningful purchase - half a million shares - yesterday.
Moneta Asset Management also raised their stake.
Hopeful.
WTF
A good day…. B
The people at Equity Development - same site as hosted the investor presentation earlier this week - have done their "research paper" revising down their fair value assessment from 245p to 190p. You may like to compare your assumptions with theirs if you have not done so already.
Interesting post, Agricore. I'll have a think about what you say and still working through the numbers myself.
*** Supreme - FY Results - Investor Presentation video - July 2022 ***
Sandy Chadha, CEO, and Suzanne Smith, CFO of Supreme plc hosted an Investor Presentation covering their Full Year results for the period to 31 March 2022.
The management team covered the financial and operational performance of each of the key categories in detail and discussed the outlook, especially the Lighting issues affecting next year's profitability forecast.
They also answered an extensive round of investor questions and took viewers through Vaping in detail - the fastest growing and largest category.
The full video is available below, divided into chapters:
0:00:03 Introduction
00:01:26 Financial & Operational highlights
00:05:59 Current Trading & Outlook
00:07:16 Lighting
00:21:00 Batteries
00:22:17 Sports Nutrition & Wellness
00:25:19 Vaping
00:35:46 Questions & Answers
Video link - https://www.equitydevelopment.co.uk/research/investor-presentation-post-fy-results-6th-july
I agree ROCKET..... I have made my first purchase.... I have some powder for another buy if it goes lower.... usually takes 3 days before this type of slide stabilises,,, fundamentally nothing wrong with this one... it makes a profit and growth is a key priority.... it will turn and I hope stabilise at £1 .... after that... who knows.....B
First punt in this one after some research on the Co. Seen a lot worse results on retail Co`s and the sell off seems harsh & overdone for a defensive Co. Looks like panic has got the sellers in stampede mode which gives a good price to enter for me.
People won't stop selling this share it seems.
Well, I'm buying. My 3rd purchase, this morning, 72.1p paid.
I've now reached my limit for this kind of share.
I like the management team, they are entrepreneurial and, as I see it, the divi reduction is to provide ammo for them to make well-priced acquisitions of distressed consumer companies.
Happy to mount the saddle and enjoy this ride!
Still waiting to buy in… could be 50s or 60s at this rate… seems friendless since the RNS…..not sure a near 50% mauling is right… could be one to buy and hold for the recovery…. With so much stock in sticky hands, it will be volatile for a while with not much volume punching above its weight and causing such destruction…..B
CONTINUED
4. SUP's management deserve a heck of a lot of credit for being candid about the situation. I think absolutely all credit to them for raising it. I would 1000% rather be invested in a company that is trustworthy and honest.
5. There was no value placed on the customer relations introduced through the Liberty acquisition. The £1.5m uplift in EBITDA and 7X valuation could actually turn out to be much more if Supreme leverage their "it's not fair" upsell/cross sell approach to these new accounts.
6. Closed system vaping. People can moan about the "disposal" nature of closed systems but Sandy while wringing his hands from an ESG point of view can also rub his hands as the margin is *COLOSSAL*. I calculate it to be 25x more profitable (£5 for 2ml vs £1 for 10ml - appreciate these are RRP but the underlying margin is going to reflect this). And it's the larger market segment according to what I've read (I've never vaped). I do also get the value of giving customers the option to move from closed to open.
GLA
One interesting fun fact: back in December 2021 when SUP was £2+ the forecast EPS for FY2022 was 11.7p/share. They actually achieved 12.4p a share.
But it's the future estimations to which we now turn. My calculations differ slightly:
I get to a 37% increase of GP for Vaping forecast for FY2023 (£26.7 vs £19.5).
Vaping becomes 75% of total GP. There's a 30% organic increase forecast and a 7% GP contribution (£1.5m) from Liberty Flights.
Lighting: GP forecasts are £4m and £6m. I am still chewing over the 20 times the life and 5 times the cost logically suggests revenue should drop by around 75%. I therefore am sceptical about the GP figure for FY2023 and FY2024. But if it's overstated I would estimate a £3.5m and £5m GP forecast as being more realistic. The drop in sales due to LED lifetime, is partially offset by higher market share in the coming 2 years.
Batteries static at FY23 and FY24 of £3.8m. No reason to think that will change up or down. I think someone asked about any risk of LED batteries lasting a lot longer on the call today. Either that or Hannah got confused. Or I misheard. Has anyone heard of these LED batteries?!
Household again is the same as forecast.
Wellness. One question which has occurred to me following today's call is the extent to which the price of whey was emphasised. Forgive me if I've got this wrong but you only find whey in Keto shakes and protein mixes. The Wellness category is far, far wider than whey. So that has made me question why the forecast drop in profits. The 130% yoy was stupendous (although not altogether surprising). I do wonder why this hasn't been forecast more optimistically going forwards? I guess other ingredients have gone up too for vitamins etc..... but surely these costs can be passed on? I mean if SUP sell a year's supply of Vitamin X for £6 instead of £5 then sales won't fall off a cliff? I say this rhetorically as there is a wide variation of prices and packet sizes. I have noticed quite a lot of aggressive promotional pricing however. I bought several bags of Keto Shakes for £2 each I think which now seems an incredible bargain given the price rises. Was Sealions a bit naive in some of its pricing?
Other thoughts:
1. The capacity increase due to the Liberty acquisition enables SUP to scale the Vaping business so we could see surprises to the upside if some of the predicted migration of smokers to vaping does occur.
2. Wellness - a profitless exercise? I still think this could surprise to the upside. People still value wellness even in a recession. There's lots of opportunity for trading down from Holland & Barrett, and Millions in all the Pound shops is perfectly placed.
3. There's no value placed on SUP's proven capability to obtain value from M&A. This is a fairly rare gift.
4. SUP's management deserve a heck of a lot of credit for being candid about the situation. I think absolutely all credit to them for raising it. I would 1000% rather be invested in a co
Hi, thanks for this and to Rooba for the comments on the other thread. I though the call was reassuring and the explanation on lighting plausible and the vaping stuff is still exciting as a growth prospect. I also wouldn't be surprised to see some director buys.
I'm still working through all the numbers, but what I reckon so far is:
Before the RNS, we knew what 2022 was going to be and the RNS just confirms that. Before the RNS, the SP was, let's say, 125p - which takes account of all the macro problems etc etc. Given that the 2022 numbers are basically the same before and after the RNS it doesn't help valuation of the SP drop, instead I compare 2023E using Equity Development's numbers. EPS before was 13.3 and is now 9.3: using before SP of 125 and after SP of, say, 80 that gives PE of 9.4 before and 8.6 after. If you look at it in terms of 2023 div yield, 5.84% becomes 5.87%; earnings yield goes from 10.64 to 11.625 and div cover from 1.82 to 1.97. So it has got cheaper on these measures, but not by a lot. The div numbers from ED also seem to include the final div from 2022 in 2023, which isn't very helpful, as that keeps the payout ratio at 50% for FY23, but we know it's going to 25% - hence 2024 is a div of 2.6p with EPS of 11.7. So based on all this, my impression so far is that the drop is basically about right (assuming that the SP before the drop was about right). However, I'd love to be told that there is something in the RNS that I've missed that puts a better gloss on things because I have a position in this already and would obviously like a SP rise from here!
If you smoke 20 a day, switching to vape will save you in the region of £4k a year. As the cost of living bites further, I'm guessing more people will be switching. Not a smoker myself, but I would switch if I did. Oh & also the improvements in health of vape over smoke is another consideration.
TDinvestor, some of the things that enticed me:
- 6%+ divi
- healthy cash position
- revenue exceeds market cap
- revenue grew whilst SP reduced 50%+ over past year
- PE ration 9:1
- EV to EBITDA 6.41
- Company track record and comms
- Analyst forecast 207p
The risk-reward looks good here in what has been and currently still is a terrible market for small caps