Leaving the competition behind

Maiden H1 results from Supreme confirm strong progress driven by organic growth, bolt-on acquisitions, new products and new customer wins. The scaling of its manufacturing, a clear point of differentiation, is behind the margin improvement and evidence of a strong, entrepreneurial management team. The outlook remains positive and an interim dividend of 2.2p has been proposed. The company is profitable, backed by cash flow and has plenty of top line growth potential, with management delivering both strategically and operationally. 

We set our current fair value at 250p per share. We see this underpinned by peer group comparisons and separately supported by the inherent value that resides in the Group’s Vaping division, reflecting the significant amounts of cash that ‘big tobacco’ is spending on solutions, particularly those that are resonating as well with the consumer as Supreme’s offering.