Nothing on here is investment advice. Do your own due dilligence.
Supreme plc Update
Since I have been getting some messages about the potential ban of single-use vapes in the UK, I thought I would write some clarification about the potential impact of a ban on Supreme plc.
Unfortunately, in the annual report, there is no differentiation between single-use vapes and reusable vapes / liquids. In the last earnings call, Supreme CEO and majority owner Sandy Chadha provided some more detail about the vaping segment. For the FY ended March 2023, Supreme achieved a total of GBP 76m in the vaping segment. Thereof, only 14m are from single-use vapes, which are mostly sourced in Asia and then distributed in the UK. The revenues from single-use vapes are significantly lower-margin than the sale of liquids for reusable vapes. The liquids are produced by Supreme in the UK in their own production facility. They own the leading brand in the UK called “88Vape”. These revenues are significantly higher-margin.
On top of that, the use of reusable vapes is actually encouraged by UK regulators in an attempt to get people to shift away from traditional tobacco-based cigarettes. They are even handing out 1m reusable vapes to smokers for free (Source: BBC, https://www.bbc.com/news/uk-65235343).
Datalab Tehnologije
Datalab received a takeover offer from the group surrounding the CEO at a valuation of EUR 11 per share. This translates to ~24m MC / 22m EV. I expected FY23 revenues of ~32m and EBITDA of ~6.6m (20% growth yoy) implying multiples of 0.7x EV/Revenues and 3.3x EV/EBITDA. This for a leading ERP software provider in Slovenia + Balcans. The acquirers are true value investors.. will continue to hold my shares for now.
SUTL Enterprise
Increased my position again.
SUTL reported their financials for the first half of 2023. Revenues grew 9% yoy and net profit by 26%. Really solid results given that their new marina on Nirup Island is not yet in the numbers. We should see some really nice growth in the second half of 2023 and in 2024.
SUTL also announced they created a new subsidiary in Australia. Maybe we will see them acquire a new marina in Australia soon.
Bravura Solutions
Bought a small position. Bravura is a leading provider of software for wealth management and transfer agency solutions based in Australia. The largest shareholders are Damien Leonard, Mark Leonard’s son, and Strikwerda, the founding family of TSS and one of the large shareholders of Topicus/CSI. Bravura has a history of overspending dramatically on fancy offices and prestige stuff and mismanaging professional services projects. My hope is that with board representation and the new CEO coming in, they will apply elements of the Constellation Software playbook and turn Bravura into a really profitable vertical market software company.
EROAD
Increased my position a bit. No news.
PSI Software
Rebought a small position in PSI after the ~30% drop. They are a leading supplier of software for all things energy (grid, energy management etc). CEO changed, still think this is one of the most attractive publicly-listed software take over targets in Germany.
Seachange International
Sold out of the position after the delisting announcement. Nice -50% return. I should really pay more attention to management/owner history. Apparently, the Singer family has a long history of f*cking over minority microcap investors.
Petrotal
Sold my the last shares of my last commodity investment at roughly breakeven. I still think it is cheap but I just don’t feel comfortable with my skills in judging commodity prices.
Dividends
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Current portfolio overview:
Supreme plc 20,7%
Sygnity SA 15,0%
SUTL Enterprise 14%
Neurosoft Software Production 7,5%
RCS MediaGroup 7,3%
NZME 6,8%
Datalab Tehnologije 5,7%
CHAPTERS Group (formerly: Mediqon Group) 4,5%
itim Group plc 3,4%
Bravura Solutions 3,1%
Onlineformapro SA 2,5%
EROAD 2,4%
4Mass SA 2,1%
iEnergizer (delisted) 1,6%
MobilityOne 1,2%
Flexion Mobile 1,1%
PSI Software 1,1%