Rainbow Rare Earths Phalaborwa project shaping up to be one of the lowest cost producers globally. Watch the video here.
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Using the same logic as my estimate for FY2023 and FY2024 adding in a further 2% to the 17.5% vaping growth I'd estimated for FY2024 (because my estimate of £43m Vaping revenue in FY2023H2 was actually £44.3m and I extrapolated the 35% FY2023 growth reduced by half to arrive at 17.5%)
1/ Batteries: - assuming static Y-O-Y
FY2023 Revenue £39.5m and GM of £3.9m
FY2024 Revenue £39.5m and GM of £3.9m
2/ Lighting: Suzanne spoke to a recovery of 15% growth on Pox Markets today - see: NB: replace Pox with a V (https://www.poxmarkets.co.uk/articles/new-supreme-s-bargain-brands-continue-to-drive-strong-growth-5c5d19a)
15% growth YOY is well behind the historic FY2022 (by about 30%) but I'm assuming it does not grow back this year as SUP said today it will be in FY2024 and FY2025.
FY2023 Revenue £15.4m and GM of £4.1m
FY2024 Revenue £17.7m and GM of £4.7m
3/ VAPING: based on 19.5% growth to FY2023H2's run rate.
FY2023 Revenue £76.1m and GM of £28m
FY2024 Revenue £106m and GM of £40.2m.
4/ Sports – improvements to margins were spoken of today, and the rebrand of Sci-Mx, it’s clear SUP are focused on driving growth here in FY2024. Assuming 15% growth and also a slightly higher margin (due to Whey prices reverting) - potentially this segment could be much higher in FY24, and there was a strong suggestion that an acquisition in this segment is likely too - no numbers are included here for that possibility.
FY23 Revenue £16.8m and GM of £2.6m
FY24 Revenue £20m and GM of £4m
5/ Other - YOY static.
FY23 Revenue £7.8m and GM of £0.9m
FY24 Revenue £7.8m and GM of £0.9m
6/ 6th Line – ElfBar/LostMary distribution - to be reported separately
FY23 Revenue and GM of Zero
FY24 Revenue £25m and GM of £2m
7/ Admin Costs = £18.7m. I’ve used the FY23 figure of £21.5m less the one off costs of £2.8m.
Conclusion:
My new estimate of GM (adding the above) for FY24 is £55.7m (FY23 was £39.6m GM)
And new estimate of adj. EBITDA for FY24 is £37m. (FY23 was £19.4m adj. EBITDA)
This is much higher than ED’s adj. EBITDA estimate of FY24 of £22.6m + “at least” £1m announced by Supreme today + £2m ElfBar = £26.6m. But we have seen caution in Equity Development's assessments for example in their FY2023 estimate versus today's actual, so I dare say they will catch up with new analysis closer to mine, at some point.
A £37m EBITDA would equate to a 4.5%-5% yield in FY2024 (50%-66% YOY growth in dividend) based on the 25% of net profit pay out. So in 2 years since they cut the dividend from 50% to 25% to achieve faster dividend growth they're almost back to the same dividend as FY2022!
FCF x 10 suggests a target price of 170p; EBITDA x 6 suggests a target price of 188p. Whichever metric you look at, despite a small jump today in SP this remains incredibly cheap and attractive in my view.
GLA
Just watched the v markets interview - I was very impressed with both Sandy and particularly Suzanne the CFO. Will look to add more here. Do you think this could be a take over target due to the share price not reflecting the intrinsic value here?
Dartron, if the holdings were different the Tobacco majors might snap this up - they certainly have the past track record of acquisitions - and are focused on future markets post "combustibles" as they so delicately describe ciggies.
But Sandy owns 57% so any kind of hostile takeover is impossible and thus it turns to whether he would sell. My instinct is he enjoys what he does too much to sell it at any price. Having said that his holding is worth £75m at today's prices so if he were offered £150m to sell who knows - I know what my answer would be if I were in his shoes :)
If we all got taken out at £2.20/share I'd be happy with that too.
Final dividend of 2.2p per share. This will be paid on 29 September 2023 to shareholders on the register at the close of business on 1 September 2023. The ex-dividend date will be 31 August 2023.
Have i missed something or was that an opportunity to buy in here for another 70-100%, position started.
Https://open.substack.com/pub/theoakbloke/p/shall-we-sup-or-get-smoked-out