REG - Supreme PLC - Year End Trading Update

SupremeAnnouncement

12/04/2022 07:00

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RNS Number : 0363I  Supreme PLC  12 April 2022

12 April 2022

 

Supreme plc

 

("Supreme," the "Company" or the "Group")

 

Year End Trading Update

 

Supreme (AIM:SUP), a leading manufacturer, supplier, and brand owner of
fast-moving consumer products, provides a trading update for the twelve months
ended 31 March 2022.

Supreme performed strongly throughout FY22, driving organic growth across its
core categories, completing two strategic acquisitions financed by free cash
and establishing product traction with leading UK grocery customers.

The Company expects to report revenue in excess of £130 million (2021: £122
million) and Adjusted EBITDA(1) of no less than £21 million for the year
(2021: £19.3 million).

The Vaping division is expected to report 10% revenue growth owing to new
listings with Sainsbury's and Morrisons as well as continuing growth across
all of its discount retail customers. This result will be enhanced by
increases to its gross margin profile driven by further manufacturing gains.
With increasing levels of government support for vaping, the Group expects the
double-digit revenue growth for this category to continue.

The Batteries and Lighting divisions have continued to show their defensive
characteristics and are expected to report growth in revenue of around 2% and
5%, respectively, and higher rates of gross margin as a percentage of sales
when compared to 2021, highlighting the Group's buying power and increasing
breadth of distribution.

The Sports Nutrition & Wellness division has continued to demonstrate its
potential with excess of 100% revenue growth. However, raw material price
inflation, particularly recently in relation to whey powder, has impacted
profitability.

Outlook

Looking at FY23, the Group is expecting to deliver another year of profitable
growth and increasing levels of cash generation, predominantly driven by
Supreme's strong Vaping sales footprint. However, this performance will be
tempered by commodity price inflation within Sports Nutrition & Wellness
and the increases in the overhead base relating to wage and transport costs.
Management has already taken steps to mitigate the external factors, including
buying forward whey, and will also be continually reviewing potential price
increases and ongoing manufacturing and distribution rationalisation.

The Group remains fully focused on driving organic growth, closely balanced
with strategic acquisitions, having agreed a new £25 million RCF facility
with HSBC in March 2022.

 

The Board remains confident that the Group will continue to deliver both
organic and acquisition led growth this financial year and beyond.

 

The Group will publish its financial results for the year ended 31 March 2022
in July 2022.

 

 

Enquiries:

 

 Supreme plc                                                           via Vigo Consulting

 Sandy Chadha, Chief Executive Officer

 Suzanne Smith, Chief Finance Officer

 Grant Thornton UK LLP (Nominated Adviser)                             +44 (0)20 7383 5100

 Philip Secrett / Samantha Harrison / Harrison Clarke / Daphne Zhang

 Berenberg (Broker)                                                    +44 (0)20 3207 7800

 Chris Bowman / Mark Whitmore / Mara Grasso

 Vigo Consulting (Financial Public Relations)                          +44 (0)20 7390 0230

 Jeremy Garcia / Kendall Hill

 supreme@vigoconsulting.com

 

The information contained within this announcement is deemed to constitute
inside information as stipulated under the Market Abuse Regulation (EU) No.
596/2014 which is part of UK law by virtue of the European Union (withdrawal)
Act 2018. Upon the publication of this announcement, this inside information
is now considered to be in the public domain.

About Supreme

 

Supreme supplies products across five key categories; batteries, lighting,
vaping, sports nutrition & wellness, and branded household consumer goods.
The Company's capabilities span from product development and manufacturing
through to its extensive retail distribution network and direct to consumer
capabilities. This vertically integrated platform provides an excellent route
to market for well-known brands and products.

 

The Group has over 3,300 active business accounts with retail customers who
manage over 10,000 branded retail outlets. Customers include B&M, Home
Bargains, Poundland, The Range, Sports Direct, Londis, SPAR, Costcutter, Asda,
Halfords, Iceland and HM Prison & Probation Service.

 

In addition to distributing globally-recognised brands such as Duracell,
Energizer and Panasonic, and supplying lighting products exclusively under the
Energizer, Eveready and JCB licences across 45 countries, Supreme has also
developed brands in-house, most notably 88Vape and has a growing footprint in
Sports Nutrition and Wellness.

 

https://investors.supreme.co.uk/ (https://investors.supreme.co.uk/)

 

(1) Adjusted EBITDA means operating profit before depreciation, amortisation,
share-based payments charge, fair value movements on non-hedge accounted
derivatives and exceptional items (including IPO-related costs).

 

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