Supreme booms from vaping sales but shifts tactics as crackdown looms

Manchester-based consumer goods distributor Supreme saw its annual revenues soar 42% to £221.2 million (FY23: £155.6 million), and pre-tax profits hit £30.1m, a 100% increase.

The stock market listed business, which has enjoyed a boom in its vaping products division, with revenues up £6.7 million to £82.8 million, and its own-brand disposable vapes reported sales of £13.7 million. 

Last week Supreme indicated it was buying Clearly Drinks from NorthEdge private equity.

Sandy Chadha, Chief Executive Officer of Supreme, said the business is “supportive” of government plans to curb underage vaping and has introduced plain packaging, the discontinuation of brightly coloured disposables, the simplification of flavour names, and ensuring the Group only trades with retailers which enforce robust age verification. 

“We believe that vaping should be a smoking cessation tool, and that adults looking to quit smoking should be supported in a cost-effective way. We have also considered the environmental impact of vapes and have rolled out vape disposal units across the entire estate of our largest customer, B&M Retail, with the goal of encouraging more responsible disposal of single-use devices.”

Announcing its annual results to the stock market this morning (2 July 2024) Chadha said the business is highly cash generative and has moved bought back £1million of its own shares and will pay final dividend of 3.2 pence per share, resulting in 4.7 pence per share in aggregate for the year, a 57% increase on FY23.

Sandy Chadha added: “Supreme has delivered an outstanding financial performance across the Period, with strong revenue growth across all five of our divisions.

“Set against a challenging backdrop, we continue to be committed to providing high-quality, high-value products to both retailers and our customers.

“Looking at our vaping business, we are fully committed to doing what we can to support the eradication of underage vaping so that the industry can get back to its core objective: helping adult smokers find an affordable, sustainable, and safer alternative to smoking. I am not concerned that the Government’s vaping proposals will have any long-term impact on Supreme as a responsible manufacturer and distributor with resources and experience to adapt to potential new market dynamics. Operationally and financially, we are in an excellent position to expand organically and, as we’ve successfully demonstrated in the past (and post-period end with the Clearly Drinks acquisition), we continue to evaluate complementary acquisitions.

“We’ve made a very positive start to the current financial year, and I look forward to updating all our stakeholders later this year on our continued progress.”