Typhoo Tea takeover: New owner brews cost-cutting turnaround after rescue deal

With the immediate future of Typhoo Tea secured after it was rescued out of administration, attention is now turning to what could next be on the cards for the historic brand.

City AM exclusively revealed late on Sunday that the troubled tea maker is to be taken over by a vapes, batteries and vitamins seller for more than £10m.

The trade and selected assets of the Bristol-based company have been acquired by Manchester-based Supreme, which is listed on the London Stock Exchange’s AIM, for £10.2m.

In a statement, Supreme said the deal includes Typhoo Tea’s stock and trade debtors with a book value of £7.5m and that it expects the integration of the business to “proceed without disruption to existing operations or customer service levels“.

The deal came after Typhoo Tea, which was founded in 1903, collapsed into administration last month in move which put more than 100 jobs at risk.

In its statement, the firm’s new owner did not specify how many jobs would be saved as part of the rescue deal.

It added that it anticipates that the brand will “operate on a capital light, outsourced manufacturing model, which the board believes can generate a gross profit margin of around 30 per cent, with a much reduced overhead base“.

Typhoo Tea braced for cost cutting

Reacting to the deal, Susannah Streeter, head of money and markets at Hargreaves Lansdown, said “it’s highly likely that Supreme will want to steam ahead and find efficiencies to cut costs and try and coax the company back to profit”.

Describing the deal as a “bargain” for Supreme, she added that “there are clearly opportunities ahead to appeal to health-conscious consumers and future Typhoo product launches look likely focus on this trend”.

Streeter said: “Kettles will be whistling in celebration at Typhoo HQ now that an historic British brand will stay on the shelves.

“The deal with Supreme had been brewing for some time, and there will be relief that the details have been poured over and the acquisition has been agreed.

“Typhoo has faced a super-tough time not just because of falling sales, but the production issues which beset the company after trespassers caused damage at its plant on Merseyside.

“For staff, there will be relief that many jobs will be saved, particularly just before Christmas.

“However, it’s highly likely that Supreme will want to steam ahead and find efficiencies to cut costs and try and coax the company back to profit.

“It’s clearly got a bargain brew for Typhoo by buying the brand out of administration.

“It has loyal custom it can build on, but also will spy new opportunities given tea’s wellness image to tie into the ambitions of its supplements and multivitamin arm.

“There are clearly opportunities ahead to appeal to health-conscious consumers and future Typhoo product launches look likely focus on this trend.”

For the year to 30 September, 2024, Typhoo Tea generated an unaudited revenue of approximately £20m and a pre-tax loss of around £4.6m.

In the year ending September 2023, the company’s revenue stood at £25.3m and it made a pre-tax loss of £37.9m.