Supreme Share Discussion Threads

[spectoacc] 29/11/2022 12:32

Agreed, disappointing reaction, but it's a cash machine & can see no reason to fold.

[actscap] 29/11/2022 10:38

Bit surprised by market reaction. One of the most detailed and open segmental updates I've seen from a UK company in some time

[edmonda] 29/11/2022 07:56

"H1'23 results buoyed by strong performance from Vaping" (new research)

For the six months to 30 September, Supreme reported revenue growth of 6%YoY to £64.6m, EBITDA (adj.) of £8.1m, -19%YoY and PBT (adj.) of £5.8m, -31%YoY. Revenue was underpinned by 47%YoY growth in the Vaping division, with, notably, 31%YoY organic growth. Interim revenue was 5% ahead of our outlook and EBITDA (adj.) 4% below. The Group notes that trading in the Lighting division, which had negatively impacted the FY23 outlook, is now recovering; Supreme notes that improved overall revenue momentum indicates that full year Group performance should be ahead of prior market expectations.

Interim operating cashflow was £4.9m (H1 22, £4.2m), with (adj.) net debt of £14.6m and cash of £5.4m (FY22, £3.9m). Reflecting a policy of 25% net profit pay-out, the Board has proposed an Interim dividend of 0.8p/share (payable: 13.01.2023). We have raised our FY23 revenue outlook by 7% from £129.5m to £138.3m, based principally on strong organic growth in Vaping, and raised our FY23 EBITDA (adj.) outlook from by 6% to £18.5m. For FY24, we have raised our revenue forecast by 6% from £142.2m to £150.5m. However, given continued uncertainties for the impact of inflation on consumer demand, input costs and pricing, we have maintained our FY24 EBITDA outlook at £22.2m. Our estimates indicate a FY24 EV/EBITDA of 5.6x.

Our Fair Value remains 190p/share.

Link to full note & audio summary (free and accessible):

[spectoacc] 29/11/2022 07:51

Very happy with that. Makes you wonder why we needed a p/w earlier in the year.

[actscap] 29/11/2022 07:46

Wow. V good set of results landing today

[masurenguy] 29/11/2022 07:31

Unaudited Results for the Half Year Ended 30 September 2022

Outstanding trading performance from Vaping category underpins growth aspirations. Trading for the year ended 31 March 2023 now expected to be ahead of market expectations

[danb45] 17/11/2022 16:21

I was introduced to Battle Bites protein bars a few months ago by the owner of the local fitness shop who said they were by far his favourite. So I bought some and he was right - awesome product, better then grenade bars IMO, I then subscribed at Amazon for a box a month. So I was pleasantly surprised when I learnt that Supreme sell them (I had no idea) they have a good knack of acquiring businesses with great products, just like T-Juice.

[danb45] 16/11/2022 15:45

Yeah it's an interesting one... are they buying illegally online or at physical shops ?

[dr biotech] 16/11/2022 15:24

You are right. Thought it was 16. Guess they are mostly doing it illegally.

[danb45] 16/11/2022 14:52

I believe the age limit is already 18

[spectoacc] 15/11/2022 12:09

Have to agree, all the kids are vapers - something will have to give eventually.

On the plus side - moving to cigarettes requires a second mortgage.

[dr biotech] 15/11/2022 11:54

FWIW my 17 year old son says he's in the minority at his school that doesn't vape. I know its not as harmful as smoking but I think its a stepping stone for some in that direction (as well as being a useful aid in the other direction). Having had some family members dies of smoking related diseases I'm an avid non smoker and despite being a holder here I'd like to see the age limit raised to 18.

Decent recovery from the lows. Lets hope the other parts for the business can recover in due course as the management predicted.

[petersingh550] 15/11/2022 08:56

I think the disposables are a completely
Different user … younger mobile I pretty sure it’s complimentary or 88vape Would not of added it

[actscap] 14/11/2022 21:27

The new website for 88vape is excellent - layout and function and content is all brilliant.However, I noticed that it is now promoting elf bars....I'm unsure what to make of this. Clearly some cross sell opportunity. But are disposals v. E liquids sufficiently distinct markets to facilitate a major competitor brand?

[robbnw] 09/11/2022 11:21

Should be . All i know is any business led by Sandy Chadha will be very successful . He knows his business for sure

[actscap] 02/11/2022 19:54

Interesting write up re. BATShttps://www.thetimes.co.uk/article/cigarette-maker-goes-up-in-smoke-after-downgrade-j2ljptsxcThere shouldn't be much read across from the dip in BATS as the drop is purely driven by revised expectations of financing costs. More impactful is the expansion and increased footfall from extra Poundland customers. Both news stories are likely very trivial to Supreme share price performance.

[actscap] 02/11/2022 08:43

https://www.retailtimes.co.uk/poundland-steps-up-drive-to-revamp-stores-and-widen-ranges/Reassuring that one of Supreme's key customers is expanding their reach.

[dr biotech] 24/10/2022 11:11

At least there has been no further deterioration which is the key thing. Perhaps this marks the bottom?

[edmonda] 24/10/2022 07:41

Resilient and generating cash (new note from Equity Development:

In a Trading Update for the six months to 30 September, Supreme reports that Group performance remains in line with market expectations for the full year, reiterating the positive message of the 15th September AGM.

In particular, the Vaping division, which we estimate to comprise 46% of FY23 revenue and 71% of FY23 gross profit, is reported to have continued on a strong growth trajectory, with organic growth boosted by the acquisition of Liberty Flights, and latterly, Cuts Ice Ltd., and Flavour Core Ltd.

Notwithstanding the headwinds buffeting the UK political and economic outlook, this is a positive Trading Update. Supreme occupies a market niche which emphasises value for money in its product lines whilst representing a positive alternative to the threats to health represented by cigarette smoking - as backed by the government’s Smokefree 2030 initiative.

Based on our outlook, Supreme currently trades on a FY23E EV/EBITDA of 4.6x and offers a yield of 6.4%. We include a valuation update based on sector-specific peers in the Distribution, Consumer Staples and Tobacco markets cross-referenced against the relevant divisional contributions to Supreme’s gross profits. Our Fair Value remains 190p/share.

[masurenguy] 24/10/2022 07:37

Notice of Results & Investor Presentation

Supreme (AIM:SUP), provides a trading update for the six months ended 30 September 2022. The Board is pleased with the Group's performance across the period, with trading in line with expectations for the year ended 31 March 2023. The Group's Vaping division, a significant profit driver for the Group, has continued its strong growth trajectory across the period, driven by a combination of both organic and recent acquisitive momentum. As previously flagged, the Lighting category slowed down during the period in line with the slow down across the market. The early indications of recovery evidenced in retail sales across September and October reaffirm the temporary nature of this slow down. The remainder of the Group remains profitable, resilient and highly cash generative.

The Board remains positive about the Group's future growth prospects, with Supreme focusing on delivering organic growth whilst fully integrating its recent Vaping acquisitions. Supreme has both the strong operational foundations and a clearly defined growth strategy in place to further increase its retail footprint across the Group's leading categories and continue to capitalise on the fast-growing transition from tobacco to vaping.

Notice of Results & Investor Presentation

Supreme will report its interim results for the six months to 30 September 2022 on 29 November 2022.

[actscap] 20/10/2022 21:01

Possible read across from Luceco....In their recent trading update they stated that "Our estimate of the total impact of cost inflation emerging from the pandemic has reduced materially in recent weeks as key cost drivers such as sea container and currency rates have moved rapidly in our favour. At current prices, this would lead to a reduction in our annual cost base between 2022 and 2024 once existing inventory has been sold through and current hedging arrangements mature."This suggests cost inflation pressures are easing.

[actscap] 20/10/2022 20:53

Is anyone else a little concerned about the rise in popularity of the Elf Bars?88vape has always targeted a more mature (i.e., adult) audience, but I'm wondering if some young adults might switch? A quick Google trends search on elf bars shows just how popular they have become in the last 18 months. I guess the flip side is that 88vape has a long standing presence and their new disposables are not too dissimilar (see mojo bar from liberty flights and 88vape bars).

[robbnw] 07/10/2022 22:30

I'm wrong I have around 49 000

[robbnw] 07/10/2022 09:50

I bought another 5000 yesterday . Now have about 35000 This price they are a steal imho