I like your analysis.. I think you should also apply a NPV discount for inventory, not only for vintage issues but it is also almost 4 years of sales, so, at the very least, applying a 10% pa discount would dramatically lower the NPV of it.. However, I think not all investments need to be super charged, and given the defensiveness of this business and steady state nature of margins, visibility and all, it is not a bad one, quite defensive, good inventory support and well protected, high barriers to entry.. I caneasily see a 10%+ IRR, many years out..
Salon is way more ultra-premium than Armand de Brignac (LVMH). Salon can easily cost >1000€, sometimes several thousand € per bottle. They are extremely picky on quality, produced only 44 vintages in 120 years.
I like your analysis.. I think you should also apply a NPV discount for inventory, not only for vintage issues but it is also almost 4 years of sales, so, at the very least, applying a 10% pa discount would dramatically lower the NPV of it.. However, I think not all investments need to be super charged, and given the defensiveness of this business and steady state nature of margins, visibility and all, it is not a bad one, quite defensive, good inventory support and well protected, high barriers to entry.. I caneasily see a 10%+ IRR, many years out..
Salon is way more ultra-premium than Armand de Brignac (LVMH). Salon can easily cost >1000€, sometimes several thousand € per bottle. They are extremely picky on quality, produced only 44 vintages in 120 years.