Further to its announcement of 28 November 2024, Supreme Plc (LON:SUP), a leading manufacturer, supplier, and brand owner of fast-moving consumer goods, is pleased to announce the acquisition of the trade and selected assets of Typhoo Tea Limited (Typhoo Tea), a long-established and well-known British tea brand, for a total cash consideration of £10.2 million out of administration. The deal includes Typhoo Tea’s stock and trade debtors with a book value of £7.5 million and Supreme expects the integration of the business to proceed without disruption to existing operations or customer service levels.
Established in 1903, Typhoo Tea was the first pre-packaged tea brand in the UK and has since expanded its product offering from traditional black and decaffeinated black teas to now include white and lemon instant flavours, herbal and fruit tea infusions, and a selection of coffees across a portfolio of brands including the iconic Typhoo brand but also QT, Lift, and Heath & Heather. Today, Typhoo Tea supplies all the major UK supermarkets and discounters as well as health food store, Holland & Barrett. Typhoo Tea also distributes products into both the Ministry of Defence and the NHS, alongside servicing international customers across North America, EMEA and Southeast Asia.
For the year ended 30 September 2024, Typhoo Tea generated unaudited revenue of approximately £20 million and a loss before tax of approximately £4.6 million. Under Supreme’s ownership, it is anticipated that Typhoo Tea will operate on a capital light, outsourced manufacturing model, which the Board believes can generate a gross profit margin of around 30%, with a much reduced overhead base. As with previous transactions, Supreme expects the Acquisition to be adjusted earnings-enhancing.
Strategic Rationale
· The Acquisition will further accelerate Supreme’s broader diversification strategy, bringing non-vape annualised sales to over £120 million (c. 50% of Group revenue)
· Typhoo Tea is a well-recognised UK consumer staple with 73% brand awareness and a high-quality customer list
· Typhoo Tea’s established asset-light, outsourced model will be further enhanced by Supreme’s existing vertically integrated distribution platform, which already services a number of existing customers
· The combination of Typhoo Tea’s product set, alongside Supreme’s Soft Drinks and Sports Nutrition & Wellness categories, will enable the Group to further develop sales, marketing and product innovation opportunities, including:
o Additional sales across Supreme’s established customer footprint of supermarkets, discounters, wholesalers and online retailers
o Development of additional own-label products or licences under well-recognised brands, replicating Supreme’s long-standing success in the Batteries and Lighting categories
· The Acquisition will immediately broaden Supreme’s UK retail network, adding more high street names including Holland & Barrett which could generate sales opportunities across multiple Supreme categories and product areas
Sandy Chadha, Chief Executive Officer of Supreme, commented:
“The acquisition of Typhoo Tea marks a significant step in our broader diversification strategy and brings one of the most iconic UK consumer brands into the Supreme family. I believe Typhoo Tea will thrive under our ownership, further benefitting from Supreme’s significant market reach and successful track record in creating brand loyalty, making us an ideal fit for this business.
Having established our Soft Drinks division earlier in the year, we believe the addition of Typhoo Tea and its highly complementary blend of great value and premium tea brands, creates tangible cross sell and product innovation opportunities in the near-term, alongside avenues into credible UK retailers that Supreme has been looking to partner with.
We look forward to welcoming Typhoo Tea into the Supreme family and updating shareholders on our progress over the course of the current financial year.”
