Supreme Share Discussion Threads

[basem1] 11/12/2024 09:46

Been going on for a few days now

[basem1] 11/12/2024 09:46

Has anyone any idea what these mid price chunky trades are ? You would think buys as sells would be causing the shareprice to fall.

[edmonda] 04/12/2024 09:18

Acquisition of Typhoo Tea for £10.2m - new note accessible here:

Supreme PLC has acquired the trade and selected assets of Typhoo Tea out of administration for a total cash consideration of £10.2m, including Typhoo’s stock and trade debtors with a book value of £7.5m.

For the year to 30th September 2024 Typhoo generated revenue of c.£20.0m, and a pre-tax loss of c.£4.6m. Supreme estimates that the acquisition will boost the annualised contribution from non-vape revenue to c.50% of total, and with full integration into Supreme’s cap-ex-light out-sourced manufacturing and distribution model, should contribute a 30% gross margin, which is in line with the Group’s recent Interim 29.6% margin. In August 2023 Typhoo had suffered from what it called “a group of organised trespassers” at its Merseyside factory which caused extensive damage and loss of stock resulting in £24.1m of exceptional costs. Typhoo entered administration on 28th November; Supreme has acted quickly to assess and act upon the opportunity created for its operations.

Supreme recently reported H1 25 results (ED report, ‘H1 25: margin improvement and FY25 outlook raised’) with revenue +8%YoY and a 22%YoY increase in (adj.) EBITDA reflecting cost control and gross margin improvement. As further details of the acquisition of Typhoo Tea emerge we will update our earnings outlook accordingly.

[actscap] 02/12/2024 16:25

I have to say this is a v exciting acquisition. Takes revenues to 50 50 split. And has a lot of untapped potential. Hope Sandy can stabilise and integrate as smoothly as past acquisitions

[actscap] 02/12/2024 16:20

Thanks appreciated

[boonboon] 02/12/2024 15:48

Vox markets 3.50m in.I think the previous owner was an Indian conglomerate who own tea plantations, so probably didn't want to license the brand in India. We could potentially do that. The Indian tea market is massive.

[actscap] 02/12/2024 15:31

Was this on the sky news interview? I didn't spot this in the vox market update?

[scubadiverr] 02/12/2024 15:08

Some say Sandy can sell snow to Eskimos. Can he sell tea back to India? ...Then maybe China

[boonboon] 02/12/2024 14:56

Sandy also said he had enquiries about licensing in India. That's potentially a massive market.

[boonboon] 02/12/2024 14:47

I think some of the other acquired brands might have some good potential heath and Heather looks like a good buy in the premium sectorhttps://www.hollandandbarrett.com/shop/brands/heath-heather/

[dr biotech] 02/12/2024 11:43

Sandy on sky news (11:35) Says it’s only 23 people, bought it on rationale rather than sentiment though he remembers the ads. Thinks it’ll be a good mix, but accepts that the brand needs some love. Only has 2% share. Thinks iced tea may be a new product

[robbnw] 02/12/2024 10:52

Tea might be in decline as a drink in UK but still huge following and what a superb brand especially with the , say plus 45 years olds . Good buy . Sandy knows well what he is doing

[ggplyr] 02/12/2024 10:27

@dr biotech, trade and asset purchase only. No liabilities for redundancies.

[joe say] 02/12/2024 10:23

Coffee futures hit record highs for the last 50 years

You may well find people like tea more than you think as a result

[dr biotech] 02/12/2024 10:16

Think we have to trust Sandy on this one. He's one of the reasons I hold here - and will know more about it than us (and has more skin in the game). If there are going to be large scale layoffs (and that looks likely) I can't imagine we will be in the hook for them - that would be in the upfront cost.

However Tea drinking is in a decline as coffee is largely taking over. But hopefully this flirt with liquidation will raise the brand awareness a bit and hopefully revive the brand a bit. Getting out the "only get an oooh with tpyhoo" may ring a few bells with us old people

[boonboon] 02/12/2024 09:50

If mostly blue-chip retailers I expect payment wouldn't be an issue as it will be legally required.Possibly some issues with smaller or overseas creditors.

[adamb1978] 02/12/2024 09:46

nfs - that happens in share deals of ongoing operating businesses. This was bought out of administration so wouldnt be the case here

[nfs] 02/12/2024 09:38

Normally in business acquisitions you adjust the price for any level of working capital (for an ongoing business) outside the norm on acquisition dayI assume the deal here was to buy the desired assets and then value the rest of what was boughtSo hopefully they can get the ongoing 'run rate' wc down over time

[adamb1978] 02/12/2024 09:37

Its an acquisition out of administration so the process aimed to raise as much cash as poss which would their be passed back to creditors.

Stock is stock so will have value. There's probably some risk around the receivables though if there's an ongoing relationship with those parties probably not too much.

[ggplyr] 02/12/2024 09:15

Re tax, they aren't buying the company, so there is no option for tax jiggery pokery.

Re Effectively £2.7m, I understand how you got there, but i disagree. I'm not sure what it is exactly, but i think its somewhere in bewteen 2.7 and 10.2m

Look at it as a separate entity, does the typhoo tea need to have 7.5m of stock and receivables to continue? If so the investment is 10.2m
Does it need any further investment in working capital or can it unwind some of this (hold less stock, collect payment sooner)

Supreme has not taken on the trade payables, if it did the purchase price would be lower to offset this, so I can't quite figure out where the working capital ends up.
Its a bit too early in the day to get my head round this one. I'll give it more thought.

[boonboon] 02/12/2024 08:51

And drinks. Just looked at their website and they sell quite a lot.

[texaspete2] 02/12/2024 08:46

Good video interview with Supreme on Vox Markets this morning. Sandy has had several international enquiries re Typhoo already. https://www.youtube.com/watch?v=1hNKCvphTeg

[boonboon] 02/12/2024 08:38

With regards to tax I'm not sure if they can offset tax due to losses in previous years. Not sure if that applies when buying out of administration.

[boonboon] 02/12/2024 08:30

Agreed about the vapes. Also potentially an opportunity to discuss vitamins and supplements.

[boonboon] 02/12/2024 08:29

Then you have cross sell opportunities as well. Effectively £2.7m with a lot less overheads makes it relatively low risk with potentially big opportunities.