Supreme Share Discussion Threads

[masurenguy] 07/7/2022 15:35

RE #574. Thanks for your concern but you don't have to worry. This is not a major holding for me and I'm averaged in here at just over 100p. About 27% down at the moment but comfortable to hold since this has a strong balance sheet, growing vaping sales and has been very oversold and will recover.

[nw99] 07/7/2022 12:20

Buying opportunity soon

[dougmachin] 07/7/2022 11:22

MONETA increased their holding on 30 June.
A top-up from 25 April. Talk about timing!

But MONETA were seemingly impressed with the overall growth story, which should resume, which is why this week's overselling is an opportunity IMO.

MGT did mess-up, but to be fair COVID curve-balls come in many forms.
Point is, I think there's a reasonable explanation here.

[sharw] 07/7/2022 11:08

Although the RNS regarding Moneta Asset Management appeared after results the trade was before - 30/6 - so don't read too much into that.

[smithless] 07/7/2022 10:29

Picked a few up today as it has entered silly territory. Company made cardinal sin of messing up so shortly after float

[john09] 07/7/2022 09:49

Lost your shirt Massageguy ?

[masurenguy] 07/7/2022 09:41

I note that Moneta Asset Management has just increased its position by 27%, from 4.1% to 5.2%, so they obviously believe that this has been grossly oversold.

[dougmachin] 07/7/2022 09:27

Not one of my biggest holdings by far and I sold half at 240p too.
But this drop is truly astonishing!
About 5% of all shares traded in 3 days, maybe 4% buys and 1% sells.
So balance of 3% sells (or less).
But a 50% drop in share price ..! Truly over done IMO.

[topvest] 06/7/2022 17:57

Thanks for your post. I haven’t had a chance to hear the presentation yet. This appears to be on a similar trajectory to UPGS post float. Both are excellent companies. Long term there is big potential here. Short term it’s ugly in share price terms. I can see this going a tad lower. I will not be selling though. I may well add some more once any large institutional shareholders have stopped selling and the share price flattens off. Long term this business is a winner. Nothing grows straight line though - there are bumps in the road. Trouble is it’s now be revalued from growth to value. It will be revalued back to growth in a couple of years, but most people don’t have the patience to wait.

[dougmachin] 06/7/2022 15:48

Equity Development.

[sharw] 06/7/2022 15:29

dougmachin - there are two forecasters giving research notes - Equity Development and one of those who doesn't like soiling its hands with PIs. I hoped yours was the latter but it turned out that your obscured url was just the E. D. one as given by edmonda post 544, so it would be more helpful if you said which it was.

www.equitydevelopment.co.uk/research/fy22-results-in-line-fy23-emphasis-on-vaping

[dougmachin] 06/7/2022 14:45

Research note:

hXXps://tinyurl.com/ewp96eu4

[dougmachin] 06/7/2022 14:40

So next year, revenues are the same as this year (expected).
And back to growth for 2023-24 and beyond.

Factor in:

- Whey prices normalizing.
- Lighting back to usual demand (lighting is actually experiencing a -20% across the board due to people being energy efficient and also COVID lockdowns has resulted in people doing all the replacing they need to do for the foreseeable !!)
- Vaping on the up and up (they're even in the running for the NHS Vaping contract, I think).
- Cross selling.
- Keeping the cash (dividend 25%+ vs 50%) for acquisitions.
- Lots of big name customers in their portfolio, which are full of opportunities.
- A MGT team that could be thought of as 'stuffed-up' (hindsight) but actually have just fallen foul of another COVID knock-on-effect.

SP is a steal when it settles, IMO. Folk don't want to wait for 12 months. They want up-ticks now. Buy now and wait. Hare and the tortoise. Great value of 2-3 years and also for the long term. In 20 years, the dividend here will be great for my pension lifestyle!

[sebass] 06/7/2022 14:34

thanks dougmachin

[dougmachin] 06/7/2022 14:31

Yep, they were obviously mortified with the lighting issue.
I would watch it. Fall massively overdone IMO.
Will buy some more, just waiting for the falling to stop.
Gave a clear explanation of the lighting issue. Basically it's the FOB transfer of large orders direct from China to customers. In large containers.
Highly lucrative.
But 1 customer said in the past 2 weeks, they weren't going to order for Christmas.
So Supreme did a check of all their major FOB customers and they all said the same thing. No order needed in July.
For May and June, the FOB orders were as expected.
Overstocking has been taking place for the past 2-3 COVID years. And now it's all come out in the wash.
Difficult to see as they don't ever see those actual orders. They are just large and direct from China to customer.
What was great to know is that Supreme have the sole licenses for several great lighting brands outside of the US.
Giving a 13 million revenue fall in 2022-23.
BUT Vaping going great guns to make up that 13 million for next year.

[sebass] 06/7/2022 14:17

I missed the presentation was anyone able to tune in?

[ali47fish] 06/7/2022 13:40

flagged or not flagged biotech

[dr biotech] 06/7/2022 09:42

If anyone is curious why my posts are highlighted above, it’s because Buywell has +1 them. He has so far +1 about 16 of my posts, he is a sad obsessive that doesn’t understand what honesty or integrity is. He has often gone back years through my posts to troll me


I’ll wait on the sidelines here for a while, may watch the presentation. Question to ask would be “if you have good visibility that lighting sales will recover, why was the weakness flagged up in the recent trading update”

[dougmachin] 06/7/2022 08:57

Quite often drops further the day after a 'cliff-dive'.

Looking to take a chunk more today / soon.

See how the presentation sounds in a couple of hours.

[masurenguy] 06/7/2022 08:25

Berenberg backs Supreme over long term

Distributor Supreme (SUP) has been knocked by its weak outlook for next year but Berenberg says the investment case is unchanged over the longer term. Analyst Owen Shirley retained his ‘buy’ recommendation but reduced the target price from 230p to 170p on the group, which owns, licences, and distributes consumer brands. The shares slumped 32% to close at 86p on Tuesday after a ‘soft’ 2023 outlook ‘overshadowed’ strong 2022 results.

"[The 2022 financial year] was largely as expected and highlighted several positive developments, in our view: namely strong progress in the business’s fast-growing vaping division, alongside the successful integration of bolt-on acquisitions. Disappointingly, there has been an unexpected drop in demand in Supreme’s lightly division – 20% of revenue and gross profit – in recent weeks due to overstocking in the retail channel; this has been compounded by softening consumer demand."

Shirley said he believe the stock remains a ‘buy’ and the ‘longer-term investment case is unchanged’.

[gopher] 05/7/2022 15:33

Thanks Cornishman33I should read not quickly scan these announcements. Certainly up the ante on the future as not the best time to make that announcement. We have say 2.5p for 2023, this is not something I like to see from a newly quoted company.

[dougmachin] 05/7/2022 15:14

"Accordingly, the Board proposes to revise its dividend policy from a pay-out ratio of 50% of net profits to a minimum of 25% in respect of FY23 onwards."

When I retire, which is looking to be later rather than sooner, after the last 12 months market movements... I think I am going to appreciate that SUP are re-investing their cash.

So, I'm fine with a minimum of 25%... build the company up I think.

[cornishman33] 05/7/2022 14:33

gopher in the statement the Co say they will reduce the divi to 25% of profits from the current 50%, so it will almost certainly be lower.

[gopher] 05/7/2022 14:10

Agree dougmachin as now supported by a 6p dividend which does not look under threat.

Lack of track record as a listed company does count against them so need a decent outlook statement to see any meaningful share price recovery imo

[dougmachin] 05/7/2022 13:13

Yep, not so good, but a further 30% discount is quite tempting to top-up.

This will recover.

It might take 18 months, but one to lock away now with potentially a few more added, depending on the Q&A tomorrow.

Very interested to see what the team has to say at the presentation, especially on the topic of WTF did the lighting news spring up from since the TU !!