Supreme PLC (AIM:SUP), the vaping and brand distributor, is cashing in on the vaping boom and expects to report record half-year sales for the first six months of 2023, a trading update revealed.
Revenues for the six months to 30 September 2023 are expected to be more than £100 million, up from £67.6 million in 2022, with underlying earnings forecast to grow year-on-year from £8.1 million to £15 million.
Having already upgraded full-year guidance last month to between £195-£200 million in sales and up to £30 million in underlying earnings, the AIM-listed manufacturer said the revenues from distributing Elf vapes exceeded guidance of £40 million and accounted for close to half of total sales in the first half.
However, following promises from the UK government to clamp down on the disposable vape industry, especially to protect younger people, Supreme is making changes to its products.
These changes, which the company has called for the whole industry to adopt, include:
- Plain packaging for its 88vape disposable range
- Age appropriate flavours
- Discontinuation of bright coloured disposables
- Suitable locations in stores
- Trade with retailers who use "robust" age verification
- Introduce vape disposal bins in stores
- Start working with the government and other vape brands
No indication was provided whether the alterations would be applied to the Elf brand.
Sandy Chadha, chief executive officer of Supreme, commented: "I would like to go on record to pledge my support to the initiatives currently being recommended to the government by the Vaping Industry Association who argue that licensing the sale of vaping products (similar to alcohol) will directly address the problem such that only reputable and responsible retailers should be permitted to sell vapes in the first place with substantial fines for those that are found to be selling vapes to children."
Shares in Supreme are up more than 1% on Wednesday, having opened at 108p.