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They do

Gg the problem with financial modelling based on wild assumptions is that you are often wildly wide of the mark.

Hi gg

You’ve missed out one of the two largest customers in Hone Bargains there. Also, they didn’t pay £147k to not use the invoice finance facility. You generally pay a small service charge for the facility which wouldn’t be an awful lot in the grand scheme of things. The RCF is the facility you effectively pay to not use and credit to Supreme for not having to use the RCF despite acquisitions and the elf investment. That highlights how cash generative they are.

On the subject of financial modelling. The headlines also don’t usually read like a daily star headline as your £60m cash raise did?

Again you have highlighted an unknown to you and an assumption you have made. You don’t know the payment terms for the big suppliers. I would actually disagree with you on this from experience and say that generally the big boys (supermarkets and discounter supermarkets) pay between 30-45 days. That would account for the vast majority of the customer base in terms of sales, which doesn’t cause the cashflow issue you mention, especially when you consider the bulk buying ahead of the excise duty coming into effect.

Also, the big boys generally offer between 1-5% for early settelement terms, which isn’t worth it for a company like supreme that are highly cash generative. Cash isn’t an issue.

I come back to that tabloid headline about a raise being required for £60m. Would you agree that headline was nonsense now?

*customers not suppliers

They already pay duty on imports of elf products. Additionally, the average debtor days, whilst factually correct, doesn’t take into account the different terms that suppliers have. If the largest suppliers are on 30 day terms then the cash outflow on the basis you outlined is largely negated

See - you’re far better than tabloid headlines :)

where do i begin? the vaping duty doesn’t come in for two years and you haven’t factored in any events between now and then. your initial £60m headline came down to £17m in your *** packet calculations? simply put they are fanciful projections for an event two years down the line, based on a starting point of zero cash.

perhaps a more suitable headline would have been “this is the resultant working capital requirement i think will be required in two years time, which doesn’t factor in any cash generation between now and then and is also devoid of any known vaping duty legislations as they have not yet been drafted”.

granted you would need a broadsheet to fit that headline in :)

They are fundamental, if accurate. So we are in agreement then - your headline was wildly inaccurate and misleading

I won’t go into your calculations with you, but we are both now in agreement that your headline of £60m raise required is incorrect and in actual fact no raise is required as any additional working capital required can be easily financed by existing facilities?

You could probably look at the introduction of elf/lost Mary as a good example for the initial working capital commitments that would be required (they mentioned it in an update last year). It did indeed require an initial increase in working capital, but after the first couple of months it was self financing as receipts arrived vs ongoing purchases. The excise duty should work in a similar manner. Initial increase in cash outflow (financed by the facilities they have - at year end I think they had zero debt, so instant access to £45m of funding if they wanted it. There would absolutely be no need for a raise, especially when you consider that there will likely be increased buying from customers ahead of the duty imposition which will result in increased inflows of cash around the time that the first duties will need to be paid.

The duty would be payable once despatched to the customer, not when it is manufactured. If you look at Supreme’s financials you can see it has always been and still is highly cash generative. Liquidity has never been an issue as alluded to in your assertions

Jed those two transactions are a buy and a sell. Probably QIA selling some shares

They have no support for ingenuity. That’s why they are begging Joe Public to buy in. Make no mistake this is a **** Show. Tomorrow will likely reflect that

I’m interested to hear the basis on which a company that loses hundreds of millions every year is worth more than £700m…

Moulding has always been the emperor with new clothes. Made a fortune from a company that has never made a profit and never looks like making one

Phew! I was wondering whether you had bought or not

They have probably made their money back from loaning their shares out to be shorted in the last 12 months. You only see stuff like that be revealed in a bid situation. Look at THG for reference

The RNS refers to the register or more specifically the record date, which is the day after ex dividend date. Easiest way to remember is just to think you have to be holding the shares at the close of play the day before ex dividend date

Hi Nik. Ex div is today. That’s why the share price was down at opening - it drops by the value of the dividend before any other pre-opening buys/sells go through. You would have had to be holding at close yesterday to be eligible for the dividend