Profit soars at Supreme thanks to growing demand for disposable vapes

Vape-maker Supreme has lauded an “outstanding” financial performance that saw profitability at the AIM-listed firm almost double in the space of a year despite a “challenging” backdrop, prompting it to announce a bumper dividend.

The AIM-listed firm, which, as well as distributing e-cigarette brands 88Vape and Elfbar in the UK, also imports batteries, grew its revenue by 42 per cent from £155.6m to £221m in the year ended March 2024, while its adjusted earnings before interest, tax, deprecation and amortisation (EBITDA) jumped 96 per cent to £38.1m, driven largely by its Elfbar and Lost Mary (another vape brand) distribution agreement.

Meanwhile, profit at the firm soared. Profit before tax and adjusted profit before tax more than doubled from £14.4m to £30.1m and from £15.2 to £30.7m, respectively, over what the firm referred to as a “highly cash generative period”.

Consequently, the firm will recommend a final dividend of 3.2 per cent per share at its annual general meeting in September, taking its total dividends for the year to 4.7 pence per share, a 57 per cent increase on that of last year.

Sandy Chadha, Supreme’s CEO, said: “Supreme has delivered an outstanding financial performance across the Period, with strong revenue growth across all five of our divisions.

“Set against a challenging backdrop, we continue to be committed to providing high-quality, high-value products to both retailers and our customers.

“Operationally and financially, we are in an excellent position to expand organically and, as we’ve successfully demonstrated in the past (and post-period end with the Clearly Drinks acquisition), we continue to evaluate complementary acquisitions.”

In March, Supreme’s share price collapsed by 21 per cent from 133p to 102p in the space of a few days, after Parliament voted to ban disposable vapes.

It has since more than recovered, and is now changing hands for 177p.

Chadha claimed not to be concerned about the move to Bill to ban disposable vapes, which did not have time to be ratified before the dissolution of Parliament for the General Election, saying: “Looking at our vaping business, we are fully committed to doing what we can to support the eradication of underage vaping so that the industry can get back to its core objective: helping adult smokers find an affordable, sustainable, and safer alternative to smoking.

“I am not concerned that the Government’s vaping proposals will have any long-term impact on Supreme as a responsible manufacturer and distributor with resources and experience to adapt to potential new market dynamics.”

Last week, the firm announced a £15m acquisition of soft drink firm Clearly Drinks, the owner of Perfectly Clear, Northumbria Spring and Revolution waves.