Supreme has issued a Trading Update for FY23 performance (year to 31 March) which it expects to be ahead of market expectations, and again in FY24 to slightly exceed the current market outlook. We have revised up our FY23 revenue outlook by 8.5% and, for FY24, by 7.6%.
At the Interim we raised our outlook on the basis of strong results (ED report 29th November 2022 H1 23 results buoyed by strong performance from Vaping): FY23 revenue by 7% to £138.3m, and FY23 EBITDA (adj.) by 6% to £18.5m. The subsequent Trading Update added evidence of continuing positive momentum (ED report 10th January 2023 Positive trading update – strong busiest quarter). On the basis of the strength of trading Supreme now reports, we again raise our outlook: FY23 revenue, in line with the trading update, by 8.5% to £150.0m and (adj.) EBITDA by 5.2% to £22.6m. For FY24 we have raised our revenue outlook by 7.6% to £162.0m and (adj.) EBITDA from £22.2m to £22.6m. There is evident margin dilution to 13.9% from our prior 14.7% estimate; this principally reflects the surge in Vaping revenue such that FY23(E) already exceeds our prior FY24 estimate.
Our Fair Value remains 190p/share – a price indicative of a FY24 EV/EBITDA of 9.4x
