Supreme PLC on Wednesday said its annual profit decreased, but its revenue surged, and it struck a distribution deal with two large vaping brands.
Supreme is a Manchester-based firm that manufactures and distributes battery, lighting and vaping products. Its shares were up 12% at 117.20 pence on Wednesday morning in London.
The company said its pretax profit in the year ended March 31 decreased 12% to £14.4 million from £16.3 million. Adjusted earnings before interest, tax, depreciation and amortisation decreased by 7.9% to £19.4 million from £21.1 million.
Supreme said this was due to customer overstocking causing an ‘overall disappointing performance’ in its Lighting division, with its gross profit there falling to £4.1 million from £9.0 million.
Conversely, Supreme said revenue increased by 19% in financial 2023 to £155.6 million from £130.8 million, half driven by earnings-enhancing acquisitions and half from ‘strong organic growth’. Its vaping division gave a ‘record performance’ with revenue increasing by 75% to £76.1 million from £43.6 million.
Supreme proposed a final dividend of 2.2p per share down from 3.8p the previous year. This brought its total payout to 3.0p per share, down from 6.0p.
Also on Wednesday, Supreme announced that in June it was selected as ‘master distributor’ for UK vaping brands ElfBar and Lost Mary. It will supply their products to various large UK retailers including Morrisons, Tesco PLC and WH Smith PLC’s Travel business.
‘We are delighted to have secured such a sizeable distribution appointment which will allow our business to fully leverage its unique technical, regulatory, compliance and quality assurance capabilities within the vaping sector. We have seen a hugely positive response from both established and new retailers who view Supreme as an ideal partner to supply these products across the UK,’ commented Chief Executive Officer Sandy Chadha.
Supreme expects the deal to generate between £25 million and £30 million in revenue and around £12 million in incremental adjusted Ebitda for the current year.
Going forward, Supreme said it has ‘made a very solid start’ to financial 2024, and expects trading to be ‘significantly ahead’ of current consensus with adjusted Ebitda ahead of expectations by at least £1 million.
‘Our commitment to providing highly affordable but competitively priced products sits at the heart of our business and our diverse client base continues to provide a stable platform for growth,’ Chadha said.
‘As we look to the future, we remain committed to expanding our product set, both organically and via acquisition, which in turn creates greater opportunities to cross sell and forge ever closer bonds with our customers.’
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