Supreme plc (LON:SUP), a leading manufacturer, supplier, and brand owner of fast-moving consumer products, has provided an update ahead of its Annual General Meeting at 8.00 a.m. today.
At the meeting, Paul McDonald, Chairman of Supreme, will make the following statement:
“Supreme traded strongly in the year ended 31 March 2023, delivering significant growth within our vaping activities, alongside solid organic growth across our remaining categories. We have continued to build on this positive momentum in the first half of the current financial year (“H1 2024”) and are delighted to report that we remain on track to deliver our strongest financial performance as a listed company.
Supreme operates across an extensive customer network within the UK retail space, and, after broadening our already diverse product portfolio and investing in strategic brands, we remain well-positioned to further expand our UK market footprint and capitalise on opportunities within our own, private label and third-party brands.
Following record profitable growth in H1 2024, the Company now expects trading for the year ended 31 March 2024 (“FY 2024”) to be significantly ahead of market expectations1 with revenue guidance of around £195 – £205 million and Adjusted EBITDA2 guidance of approximately £28 – 30 million, an increase of £3.5 million compared to the market expectations1, with around £2 million of the incremental Adjusted EBITDA2 arising from the Elf opportunity and around £1.5 million incremental Adjusted EBITDA2 arising from the core business. In addition, the investment into working capital to support the Elf opportunity has been managed better than expected and as a result the Company now expects a stronger cash position at half year and year end than initially anticipated.
Management now anticipates the contribution of the distribution of Elf and Lost Mary brands across FY 2024, based on current legislation, will be around £4 million of Adjusted EBITDA2 from around £40 million of revenue3.
In addition, the continued expansion of our Vaping category remains a key growth driver for Supreme and we continue to attract significant demand for our vaping products from key retailers, with demand across our principal 88Vape brand particularly strong. This increased demand combined with improved margins in our Wellness and Vaping category plus further synergistic overheads savings arising from the businesses acquired in FY23 have led to an increase in the full year Adjusted EBITDA2 expectation for the core business of around £1.5 million.
As an industry leader, Supreme acknowledges the wider concerns of youth vaping and remains fully supportive of any proactive measures or changes in legislation that potentially restricts specific products, packaging, flavours or point of sale in the UK.
Operationally, we have commenced activities from our new warehousing facility which has already enhanced our distribution and storage, further supporting both our organic and acquisitive growth ambitions.
The Supreme Board remains pleased with the Group’s ongoing financial and operational strategic progress and believes we are ideally positioned to deliver on our medium to long term growth potential.”
1 Company compiled analyst consensus for the year ending 31 March 2024 prior to release of this announcement was Adjusted EBITDA of £25.6 million.
2 Adjusted EBITDA means operating profit before depreciation, amortisation, share-based payments charge, fair value movements on non-hedge accounted derivatives and exceptional items.
3 Previous guidance for the Elf opportunity was £25 – 30 million of revenue and around £2m of Adjusted EBITDA2.
