Supreme profits nearly double with record growth in vape sales

Supreme, a leading manufacturer, supplier, and brand owner of fast-moving consumer products, has announced its results for the year ended 31 March 2024, highlighting exceptional performance in its Vaping and Branded Distribution divisions.

The company reported an impressive 42 per cent revenue growth and a 96 per cent increase in Adjusted EBITDA, showcasing a significant rise in profitability. Revenue rose to  £221.2m, from £155.6m last year, and Adjusted EBITDA to £38.1m, from £19.4m in 2023.

Supreme’s Branded Distribution division experienced a remarkable surge in revenue, reaching £63.5 million, up from £7.8 million in FY23. This growth was largely driven by the master distribution agreement with vape brands Elfbar and Lost Mary.

The company said the appointment as a master distributor for Elfbar and Lost Mary in the UK was achieved with minimal incremental investment in resources.

Supreme consolidated its warehousing operations at Ark, the new 167,000 sq ft principal warehouse and distribution centre, which it said will support both organic and acquisitive growth.

The company announced a final dividend of 3.2 pence per share, subject to shareholder approval, bringing the total dividends for the year to 4.7 pence per share, a 57 per cent increase on the prior year.

“Supreme has delivered an outstanding financial performance across the period, with strong revenue growth across all five of our divisions,” Sandy Chadha, chief executive, commented. “Set against a challenging backdrop, we continue to be committed to providing high-quality, high-value products to both retailers and our customers.”

Looking ahead, Supreme forecasts another profitable and highly cash-generative year for FY25, with a positive start in Q1 aligning with current market expectations.

The company expects its Vaping and Branded Distribution divisions to remain largely unaffected by the proposed future disposable vape ban by the government.

“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,” Chadha added.

He said the company remains focused on accelerating organic growth and strategic cross-selling while exploring complementary acquisition opportunities, as evidenced by the recent acquisition of Clearly Drinks Limited for £15m.

“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,” he commented.

“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.”