Supreme PLC (AIM:SUP) warned that revenue and underlying earnings (EBITDA) are likely to be below last year and below previous market expectations for the current year 2023 due to a slowdown in lighting sales.
The battery and lighting distributor, which also sells e-cigarettes, also said it is slashing its dividend payout ratio from fiscal 2023 onwards, from 50% to a minimum of 25%.
In its results for the year to 31 March 2022, the company reported strong organic progress, with revenue increasing 7% to £130.8mln, with the company noting new customer momentum contributed to revenue growth of £4.1mln (10%) in vaping, and £9.0mln (132%) in sports nutrition & wellness.
Adjusted pre-tax profit increased 6% to £17.4mln and earnings before interest, tax, depreciation and amortisation (EBITDA) rose 9% to £21.1mln.
The group's largest and most profitable category, vaping, continues to perform strongly and is expected to grow by 30% in fiscal 2023, said the company.
But a "marked" slowdown in lighting sales in the past year 2022 was also compounded by customer overstocking, leading it to cut guidance for the new year, though it still expects "another solid, profitable year".
A final dividend of 3.8p per share has been declared for 2022, bringing together total dividend for the year to 6.0p.
The dividend ratio has been cut going forward as the board "believes that M&A can drive better rates of shareholder return compared to servicing its existing dividend commitments".