H1 25: margin improvement and FY25 outlook raised

For the six months to 30 September 2024, Supreme reported healthy revenue growth of +8%YoY (£113m) based on both ongoing business and the acquisition of Clearly Drinks Ltd., with (adj.) EBITDA +22%YoY at £18.5m, underpinned by gross margin improvement +299bp to 29.6%. The (adj.) EBITDA margin was 16.3%, compared to 14.5% a year earlier. The improvement in profitability underlines Supreme’s breadth of market position and depth of expertise in the distribution of a wide range of household goods. The Group notes a strong start to H2 and has issued raised FY 25 (adj.) EBITDA guidance of “at least £40 million”.

With our FY25 guidance raised from £37.0m (adj.) EBITDA to £40.0m, our FY26 outlook remains unchanged, principally reflecting the full impact of the ban on disposable vapes. Our Fair Value remains 225p/share.