The H1 outcome was as indicated in the recent (18 October) Trading Update. Group guidance for the full year is now raised: from revenue of £195m - 205m to £210m - £220m (ED estimate was £204.2m); (adj.) EBITDA from £28m - £30m to £32m - £35m (ED estimate was £29.0m). From incremental EBITDA of c.£4.5m, c.£1.5m arises from core operations and c.£3.5m from the Elf distribution agreement, which supplies retailers including Tesco, Morrisons, One Stop and WHSmith.
A series of initiatives – branding and pod vape developments in particular – mean that the Group can demonstrate a realistic strategy for the potential changes in the vaping market. Supreme also reports completion of its supply and distribution centre (the ‘Ark’), noting its capacity to support both organic growth and potential M&A opportunities, with £35.3m of borrowing facilities available.
Following the Group’s increased FY24 guidance (revenue raised 7%, and (adj.) EBITDA by 14% -17%), we have raised our outlook to revenue of £221.2m, +8%, and (adj.) EBITDA of £33.5m, +16%. We expect a FY24 total dividend of c.£5.1m, with £1.7m paid at the Interim. Our Fair Value is raised to 225p/share.
