Supreme Share Discussion Threads

[cestnous] 29/1/2024 15:25

They will easily be able to afford the buyback from the pre ban sale spike in disposables. I continue to be impressed with the commercial acumen of the board of directors.

[adamb1978] 29/1/2024 14:56

I assume they were planning to put out an announcement this week but then felt the need to hurry it out today given the news.

£9m EBITDA at risk isn't a lot if more than half will come back as they suggest. Means its at most 10% of their EBITDA at risk

[danb45] 29/1/2024 14:50

that's some swing !

[johndoe23] 29/1/2024 14:50

Sneaky update, but good...

[hericsaba] 29/1/2024 14:50

Wow, great turnaround news...

[adamb1978] 29/1/2024 11:03

A close around 100p would put the price in line with the early Oct 2022 low and then Sept 2023 low. Will be nice to settle not below that. There's a clear upwards sloping channel on the chart going back to the Oct 2022 point

[adamb1978] 29/1/2024 10:33

Markets love good news, and can accept bad news. Worse is uncertainty as it creates a buyer's strike

[actscap] 29/1/2024 10:29

I see BATS has bounced off the news. Uptick in combustibles expected? Or just all the bad news now out in the open and it was all priced in?

[adamb1978] 29/1/2024 10:20

Yes. Even taking hugely conservative forecasts about the impact of this, the PE is very low. Its actually good that this is done and out in the open now rather than having the risk lingering

[owenski] 29/1/2024 10:16

So, essentially, a year and a half before any actual penalty is enacted.

[babbler] 29/1/2024 10:12

Health Secretary Victoria Atkins told the BBC she was confident the new bill would pass Parliament by the time of the general election - expected to be this year - with it coming into force in early 2025.Once the timing is confirmed, retailers will be given six months to implement it.

[actscap] 29/1/2024 09:37

Great update thanks. SUP may dampen any hit through increased volumes of higher margin products and a renewed focus to crack down on illegal sellers.

[topvest] 29/1/2024 09:36

Bit of an odd share price reaction this morning as I would have expected an increase. Disposable vape sales will go through the roof in the short-term, particularly as the ban date gets closer. The only business really impacted is the Elf Bar distribution deal which is lower quality revenue anyway. Presumably Elf will switch to another product.

[actscap] 29/1/2024 09:34

Good to take a conservative view - even at 50% reduction in single use vaping sales, SUP is insanely undervalued.

[actscap] 29/1/2024 09:30

I managed to get a good block at 93

[adamb1978] 29/1/2024 08:52

Thanks for that article blue. I like the line "In the event of a ban on disposables, Supreme expects that most of its current consumers would shift to one of these alternative forms of vaping."..

so my 50% assumption above is probably badly wrong

[adamb1978] 29/1/2024 08:44

Thanks Babbler. So maximum exposure to gross profit, using their segmental margins, is:

1) £8m @ 40% margin = £3.2m
2) £26m @ 11% margin = £2.9m

So total of £6.1m if:
- all goes to zero and those customers don't move to other vaping products
- SUP takes zero actions on the opex to offset

Those two assumptions look daft, so lets say that:
- half the customers move to other products....very conservative!
- there's £500k in offsetting cost cuts taken

Means you have a £2.5m impact on PBT, which knocks out about 20% of EPS, so possibly just over 6p EPS in H1, or 12p annualised.

Share price in the 90s therefore means a PE of 8x based on very conservative assumptions.

Adam

[blue377] 29/1/2024 08:43

Supreme were ready for this, it should hardly make a difference for them, or they could gain a bigger percentage of the market.

[babbler] 29/1/2024 08:36

The Vaping division delivered an outstanding performance in H1 2024, generating revenues of GBP42.1 million (H1 2023: GBP31.8 million), a significant increase of 32%. This includes revenue for owned-brand disposable vapes of GBP8.0 million (H1 2023: GBP3.9 million). Please note, the revenue for third-party disposable vapes (ElfBar and Lost Mary) is reported separately in our Branded Distribution category and totalled GBP26.4 million for the Period (H1 2023: GBPnil).Vaping gross profit as a percentage of sales increased from 38% to 41% owing to further synergistic gains from manufacturing expansion and the addition of the brands acquired in FY 2023.

[adamb1978] 29/1/2024 08:26

Does anyone know what portion of SUP's vaping revenues come from single use?

[cestnous] 29/1/2024 08:18

Stupidly huge overreaction. I won’t be selling

[basem1] 29/1/2024 08:12

Impossible to buy down here NT only

[basem1] 29/1/2024 08:07

No point in selling now just hang in there

[actscap] 29/1/2024 08:05

Huge overreaction in my opinion. Supreme listed with no single use vape option. It's only recently they entered in that space. Market has significantly over reacted. There is a consistent demand for vaping products that won't fall away, at least not in the proportions the market has priced in (which looks to be m assuming absolutely no replacement products are purchased)