Supreme PLC (AIM:SUP), a major distributor of disposable vapes, batteries and lightbulbs, lifted its interim dividend 88% and said it expects full-year profit to be “significantly ahead” of its previous guidance after increasing 179% in the first half of the year.
Shares jumped 14.14% higher to 125.55p in early deals.
Group sales of £105.1 million in the six months to 30 September were up 63% on the same period a year ago, with the vaping division growing 32% to £42.1 million, of which own-brand disposable vapes made up £8.0 million (up from £3.9 million a year ago).
Another £26.4 million was contributed by just three or four months from the deal to distribute the popular ElfBar and Lost Mary disposable vaping brands, signed in June with China’s iMiracle Technologies.
Supreme, which already hiked its 2024 profit guidance in July and September, said it now expects revenue of around £210-225 million and underlying profit (EBITDA) of roughly £32-35 million, up from the £28-30 million guidance in September.
Around £1.5 million of the incremental adjusted EBITDA is from the core business and around £3.0 million from the ElfBar distribution deal.
Chief executive Sandy Chadha said the record revenue and profit growth was undoubtedly driven by the vaping arm, helped by “solid sales momentum” across the remainder of the business, including 21% sales growth for lightbulbs and 17% for sports nutrition & wellness products.
The company said it is increasing vaping production capacity 25% at its Manchester-based manufacturing site to accommodate three vaping businesses it acquired in the previous financial year and support further growth.
Chadha added: “In light of our growing presence across the UK vaping sector, we remain highly vigilant to the growing problem of underage vaping and welcome any preventative measures that prevent the supply of vape products to underage individuals whilst acknowledging the important role that the vape industry will continue to play in delivering the UK government's 'Achieving Smoke-free 2030' initiative.”
Supreme flagged that it is carrying out measures such as “reducing the use of colour” in the branding for its 88vape packaging, using “age-appropriate naming conventions” to describe flavours and selling “only to retailers and e-tailers who commit to having robust age verification controls in place”.
A government consultation on possible new UK e-cigarette regulations ends next Wednesday, 6 December.