At IPO, we set a 50% payout ratio. That remains in place for now. But we’re open to adjusting based on circumstances, whether a major acquisition opportunity arises or, conversely, if we have surplus cash in a given year, we might consider a special dividend. Ultimately, I want to do what’s right to grow the business. As the largest shareholder, I win or lose with the same decisions as everyone else.

09/12/2021 What’s the plan behind consolidating your five Trafford Park warehouses into one?

We’re looking to consolidate our five warehouses into one large facility to gain efficiency and scale. Right now, our operations are quite fragmented, we’ve got separate warehouse and safety managers in different sites, and we’re constantly shuttling stock around inefficiently. By bringing everything under one roof, we’ll streamline management, reduce costs, and work more cohesively as a company. We’re already in discussions with consultants and expect to sign a lease or an intention to lease soon. We anticipate the move and the new facility being operational within 18 months.

There will be capital expenditure and rental commitments, but the efficiencies we gain, particularly the ability to execute more Cybex-style acquisitions, are key. Right now, we don’t have the physical capacity to properly integrate acquisitions. With a larger space, we’ll be able to buy, consolidate, and fully integrate new businesses into Supreme. That’s a big step forward.

09/12/2021 Why did you acquire the branded consumer goods division when it seems outside your core strategy?

That acquisition was made around three years ago, pre-IPO. At the time, we didn’t have a wellness category and this was a distribution business doing a 10% margin. We paid about £3.5 million, but it had £2.3 million in stock and receivables, so the actual risk was low, even if we shut it down, our exposure was under £1 million.

In hindsight, we now have stronger categories where we can manufacture and build brands ourselves, which is where we want to focus. That said, we’re exploring how to evolve the division, potentially through licensing and product extensions. Also, what’s not visible in the segment analysis is the cross-sell benefit: the acquisition opened access to new customers who now also buy lighting, batteries, and vaping products. So while headline revenue is down, the overall return, including net contribution and cross-category upsell, makes the deal justifiable. We’ve also reduced overheads, with a smaller team and no warehouse.

09/12/2021 Will you need to raise capital to fund M&A, new facilities, or growth investments?

We’ve had multiple investor conversations about this. Our M&A blueprint is well-defined and proven, Sci-MX, for example, ticked every box we outlined pre-IPO. The board is supportive of more M&A because we’ve shown we can execute and integrate efficiently, delivering value-accretive results.

That said, we’re balancing several priorities: a 50% dividend policy, a new facility (which will require major capex), and increased working capital to fuel growth. We’re currently at very low leverage, less than 0.5x EBITDA, but we’re considering increasing that closer to 1x to give us flexibility for further acquisitions. Debt would be the most likely route to fund that.

09/12/2021 Would all shareholders, including smaller ones, be included in a future capital raise?

It would ultimately be decided by the brokers. But now that we’re a public company with a full board and governance structure, decision-making is more deliberate and structured. It’s not just down to me anymore, which is a good thing for the business and protects shareholders from hasty decisions.

09/12/2021 As a major shareholder, would you support dividend retention instead of distributions? Are you under lock-up?

I’m under a two-year lock-up, but if anything, I’d like to buy more shares, I often can’t because of closed periods. The board has approved me to buy more when allowed.

On dividends, we committed to income investors at IPO that we’d pay one. Changing that now wouldn’t be fair. In hindsight, maybe we could’ve structured it differently, but we’re sticking with it for this year and next. If things change, we’ll revisit it, but only with full stakeholder alignment.

25/04/2022 Will you issue equity, or use the revolving credit facility (RCF) for acquisitions?

We’d prefer to use the cash we've already raised, we're paying fees on it, so it makes sense to deploy that first. We're actively exploring opportunities, mainly in vaping and wellness. With rising raw material costs, there will be casualties in the market, which could present attractive targets. We look for businesses we can integrate and generate synergies from, especially through overhead savings. The cash was raised for a reason, and we intend to use it prudently.

25/04/2022 Will you maintain your IPO dividend policy?

Yes, and at today’s share price, that equates to a yield of around 4.6% for next year. So it remains healthy and intact.

07/07/2022 Why did you cut the dividend, is it related to lighting or liquidity issues?

The dividend cut has nothing to do with lighting or liquidity. From IPO, investors told us we’re very strong at M&A, with a proven ability to identify targets, execute deals, and integrate businesses effectively. They’ve encouraged us to reinvest more capital into acquisitions. Our M&A pipeline is currently very active, likely due to macro conditions and increased visibility from being listed for over a year. While we have a £25 million facility (plus a £10 million accordion), we recently acquired Liberty Flights, and continued M&A activity will use up that capacity quickly. Historically, we’ve maintained a conservative debt profile, avoiding high leverage or covenant pressure. Servicing a dividend at the previous rate made less sense than reallocating capital into M&A, which delivers superior shareholder returns.

07/07/2022 What EBITDA multiples are you targeting in M&A?

It depends on the type of acquisition. For strategic assets, we’d go up to 4–5× EBITDA. For distressed or bolt-on opportunities, we aim for a payback within 18 months. Our approach is disciplined and driven by return on capital.

07/07/2022 How much debt would you be willing to take on?

We have a £25 million facility with a £10 million accordion option attached. Beyond that, we don’t intend to raise more debt unless the business grows significantly, improving the debt-to-EBITDA ratio. We’ve always maintained a conservative stance on leverage, consistent with our approach to capex and new market entry.

07/07/2022 What’s the M&A timeline, and which areas are you targeting?

The focus is primarily on vaping and wellness, with vaping as the current priority. We can’t give a specific timeline, but we’re actively engaged, between these investor calls, we’re constantly doing diligence and speaking with targets. The pipeline is more buoyant and promising than ever.

07/07/2022 Will you consider share buybacks at current price levels?

We can’t comment on that, it’s a regulatory restriction. The board would need to review and approve any such decision, and we’re often in closed periods due to active M&A discussions, which limits our ability to act even if we wanted to.

06/12/2022 Why do you consider Cymax one of your most exciting acquisitions?

We bought the Cymax brand for £1 million, and this year alone it should generate £1.5 to £2 million in gross profit. It has opened access to retailers like Tesco, Morrisons, Sainsbury’s, Costco, and Amazon, customers we didn’t have for wellness and protein. We didn’t take on any staff or overheads; we simply brought their product into Manchester and now manage and manufacture it ourselves. It’s a recognized brand with a great return. Cut Size was a similar deal, different numbers, same strategic benefit. There’s always risk in acquiring distressed businesses, but that’s reflected in the low purchase price.

06/12/2022 Can you elaborate on your financing terms and current debt facilities?

At the start of this financial year, we refinanced all borrowings into a single £25 million revolving credit facility. This replaced our prior term loan, working capital lines, and related-party loan. At March year-end, we had around £4 million in net debt, so the goal wasn’t consolidation, it was having flexible capital on tap for acquisitions. This setup avoids waiting on bank approvals during deal execution. We can repay flexibly rather than on fixed-term schedules, which is important given current interest rate trends. We’re six months into the three-year facility, with an additional £10 million accordion available, though I don’t expect we’ll draw it unless an exceptional M&A opportunity arises.

06/12/2022 Has debt increased due to anything beyond M&A activity?

No, the increase in debt is purely due to M&A, both the initial purchase prices and integration costs. There are no other contributing factors.

07/07/2023 What is the expected impact of the Elf opportunity on working capital and returns

We expect the Elf opportunity to generate £25 to £30 million in revenue this year. To support that, we plan to invest around £8 million into working capital. This will yield roughly £2 million of EBITDA on a current-year basis, and closer to £3 million on an annualized run rate. That gives us a return on capital of around 30–35%. As noted earlier, it’s still early days, but we're very optimistic. We’re going to report this distribution agreement as a separate segment from our core vaping business, it’s a different model with distinct drivers and metrics. As revenue and EBITDA expectations scale, so will the working capital investment, but that 30–35% return on capital should hold.

07/07/2023 How long will the new warehouse be sufficient, and will there be double running costs?

The warehouse became operational this Monday. We received the keys in February and will return the keys to four existing warehouses by the end of this month, so there's a four-week overlap. That’s about as short as you can make it, and we were admittedly a bit panicked. But it's already up and running, and the efficiency improvement is clear even within the first week. As with our acquisitions, our M&A and integration teams move fast. We got the keys, fitted it out, moved over £60 million of product, and were only closed for five days. The total capex was £3.5 million, and there were no significant working capital implications.

06/12/2022 Can you elaborate on your financing terms and current debt facilities?

06/12/2022 Has debt increased due to anything beyond M&A activity?

No, the increase in debt is purely due to M&A, both the initial purchase prices and integration costs. There are no other contributing factors.

29/11/2023 Why is there reluctance to conduct share buybacks, given your capital allocation focus?

We actually wouldn’t describe it as reluctance. If the company buys back shares, my own holding would go up, not down, since there would be fewer shares in circulation. Our current focus is on growing operating cash flow and investing in growth opportunities, but that doesn’t preclude buybacks in the future. EPS and ownership dynamics are fully understood.

29/11/2023 Why is there reluctance to conduct share buybacks, given your capital allocation focus?

29/11/2023 Why are you reluctant to do share buybacks despite holding nearly 57% of shares?

I already own nearly 57%, and if we do a buyback, my holding would increase to around 65%, reducing market liquidity. Even though we have the cash, it doesn’t make sense to go that route. A special dividend would make more sense if we don’t find a suitable M&A. My first preference is M&A. If that’s not right, we can return surplus cash. We’ll revisit this at year-end.

29/11/2023 What does your current M&A pipeline look like and can you share target sizes?

I can’t give specifics due to confidentiality, but we’re actively pursuing opportunities. I’ve signed many NDAs and have numerous information memorandums on my desk. We’re serious about it.

03/07/2024 What payback period are you expecting for the Clearly Drinks acquisition

Just to be clear, we only bought Clearly Drinks a week ago, so integration is just beginning. The historic losses were largely due to high interest charges from its private equity structure, which are eliminated under our ownership. The business generated £3 million EBITDA last year, which would largely convert to net profit within Supreme's structure, excluding tax. So, it's immediately earnings-accretive

To grow earnings beyond the £3 million, we’ll leverage synergies in overheads, management structure, and licensing, as Sandy discussed earlier. There are operational efficiencies and cross-sell opportunities. It's early days, but this is the most excited I’ve seen Sandy about an acquisition since Liberty Flights.

03/07/2024 With the battery division’s low gross profit, wouldn’t it make more sense to sell it and reinvest in higher-margin M&A?

We can do both. We have more than enough cash to fund M&A without needing to sell the battery division. In fact, we could buy a Clearly-scale business every six months purely from cash flow. Also, the battery division has no attached overhead, selling it would cut directly into the bottom line. It’s foundational, keeps customers sticky, and remains strategically valuable.

03/07/2024 If Elf required £15M in working capital, how did the company manage with only a £5M overall increase?

We reallocated across the business. Since the Elf launch, we’ve tightened stock management considerably, inventory sits for days or weeks now. The original £15 million requirement has already declined. Other divisions adjusted their usage to make room on the balance sheet and in warehouse space. We've sustained this model through FY24 and are confident it’s sustainable going forward.

03/07/2024 Will stock buybacks become a permanent part of your capital allocation strategy?

We’ve made no decision yet. It’s a board-level discussion. We’re evaluating three uses for excess capital: share buybacks, M&A, and dividends. All are on the table, but no immediate plans have been finalized.

26/11/2024 How has the acquisition of FoodIQ performed since purchase?

We bought FoodIQ mainly for its assets. We paid about £300,000 for roughly £2 million worth of plant and machinery. Around half of that equipment is already installed in our facility, helping us scale and improve efficiency. The rest is in storage and will be used when we move to a new site. The deal was purely an asset acquisition to support growth capacity if our orders continue to rise.

26/11/2024 Will your existing facilities and balance sheet be sufficient to fund tax stamp machinery and related CapEx?

We have ample facilities to support the required investment, and that’s exactly why we value a strong balance sheet, it gives us flexibility during transitions like this. That said, the cost of machinery for tax stamps would be additional to the £15 million I mentioned earlier. We're a very lean CapEx spender, excluding Clearly Drinks, we typically stay under £1 million annually. Any necessary facility changes would happen over the next two years. I trust our vaping manufacturing team and Sandy’s commercial leadership to manage that spend cost-effectively, but I can’t put a precise figure on it yet.

26/11/2024 Are there specific M&A categories you're targeting?

Yes, there are areas we’d like to enter, but I’d rather not go into detail while discussions are ongoing. We're already in contact with several companies in these spaces. Broadly speaking, we're looking at owning brands and expanding our manufacturing footprint.

26/11/2024 Will you maintain a strict dividend payout ratio or smooth dividend growth

Currently, the dividend is set at 25%. It used to be 50%, which we quickly realized was too high. At 25%, we’re offering a good return to income-focused investors while retaining capital for M&A. There's no plan to change the approach unless advised otherwise, but we remain open to revisiting it if needed.

20/11/2024 How important is it for company directors to have their own capital at stake?

I think it's critical. When directors don’t have any shares, they’re not truly aligned with shareholders. They often say acquisitions are value-accretive, but the reality is those deals mainly benefit them, higher salaries, more prestige, bigger teams. Meanwhile, shareholders often see the share price fall. I’ve learned that lesson the hard way. Alignment through ownership changes decision-making entirely.

20/11/2024 How has your view on debt changed since the administration experience?

I'm extremely debt-averse now. I don’t like the idea of any debt on a business. Debt can be a tool if used responsibly, for example, to strengthen the balance sheet without diluting shareholders. But what went wrong in our case was over-leverage. Back in 2003, banks were giving up to four times EBITDA as debt, which is insane. Today it’s more like 2x, which is more reasonable. And back then, interest rates were lower, now with banks adding their margin, real borrowing rates are closer to 7%. So the risks are higher, and I think founders need to be very cautious.

20/11/2024 Did you personally benefit from the 2003 private equity deal?

My father took £16 million from the sale of our battery business, which had started expanding into lighting. He invested that into property and other ventures. I stayed on, put in some of my own money, about £500,000, and received 30% of the new business. But that 30% was of a heavily indebted entity, and I didn’t fully understand that at the time. No advisor really explained that the equity was effectively worth zero unless the debt was paid down or the business grew significantly. Those next four years were extremely challenging.

20/11/2024 Why did Supreme acquire a drinks business, and how does it fit your model?

It’s the same core strategy: we already sell to thousands of retailers, and drinks, like batteries, are stocked almost everywhere. We bought a manufacturing business, which gives us the lowest cost base. It also allows us to launch and license brands internally. Functional and energy drinks are still high-growth categories, and they balance the portfolio well, especially with categories like vaping under increased regulatory scrutiny. The business we acquired is over 100 years old, with strong private label and contract manufacturing relationships. What excites me most are the new brands we’ll be launching next year, they’re genuinely mind-blowing.

20/11/2024 Are you shifting away from vaping as a core focus at Supreme?

We’re not moving away, we’re diversifying alongside it. Vaping is still two-thirds of our V segment and incredibly sticky. Customers are brand-loyal and the repeat rate is high. If regulatory pressure increases, we may find acquisition targets in vaping at very low multiples, three to four times EBITDA, and those businesses will be high-retention assets. For example, Liberty Flights, which we acquired two years ago, is still performing well with modest overhead and steady growth. We're just making sure we have a balanced portfolio beyond vaping.

20/11/2024 How has the market reacted to the vape tax announcement?

Positively. Our share price rose 10–11% on the day. The tax comes into effect in two years, and in that time, we’ll generate over £60 million in cash. We're already well capitalized, so by then we could have £100 million+ in firepower for acquisitions. Removing the uncertainty has been a net positive, it’s like a company guiding low and then beating expectations. The budget wasn’t as harsh as many feared.

28/11/2024 How has the acquisition of Food IQ gone?

We mainly bought the assets, about £300,000 for roughly £2 million worth of kit. Much of the machinery is already in use in our current facility, improving its size and efficiency. The remainder is in storage, earmarked for deployment once we move to our new site. This was really a strategic asset purchase aimed at supporting future growth if our order book continues to expand.

28/11/2024 Will the £15 million estimate also cover machinery investment for tax stamps?

No, that’s separate. The £15 million refers to working capital only. As for capex, we’re a very lean business, historically spending less than £1 million annually, excluding drinks. Any facility changes needed for tax stamp compliance will be phased in over the next two years. I trust our vaping manufacturing team and Sand’s commercials to execute that as cost-effectively as possible, but I can’t put a number on it today without guessing.

28/11/2024 Is there anything else to note regarding working capital impacts from vape duty and VAT?

No additional figures at this point. I mentioned £15 million earlier, but the final number depends on multiple factors: demand levels, the deferment scheme structure, whether we and our customers get bonded warehouse status, and other unknowns. What I can say with confidence is that whatever the final requirement is, we’re financially positioned to handle it.

28/11/2024 Do you plan to manufacture 88 Nics in-house?

Yes, we’re bringing that in-house. We’ve invested in machinery to manufacture for third parties as well, and production in Manchester should begin around April next year. While we’re currently disappointed with nicotine pouch sales, they’re growing off a small base, and that growth rate could change the picture significantly by next year.

28/11/2024 Will you maintain a fixed dividend payout ratio, or consider smoothing dividend growth?

Currently, we have a 25% payout ratio. It started at 50%, which we realized early on was too high, so we adjusted. The 25% level seems to strike the right balance, rewarding income investors while retaining capital for M&A. There’s no immediate plan to switch to a flat amount or a smoothed trajectory unless shareholders specifically request it.

05/06/2025 What return metrics matter most to you in M&A, and why not use debt to reduce equity?

I prefer not to use equity unless absolutely necessary because our valuation is currently low, making equity expensive. As for debt, I’m not against it, I’d take on £20–50 million without hesitation for the right deal, over a 1–1.5 year period. Beyond that, it starts to constrain the business. On returns, we assess strategic fit first: does the business align with our portfolio, will customers buy it, and can we scale it through our distribution? Then we look at payback, if it's under three to five years, great. But I’d never do a deal that could jeopardize the rest of Supreme. That’s the red line.

05/06/2025 TYU was once the UK’s largest white label tea producer, can you reclaim that space?

Absolutely. The companies we’ve acquired in tea and drinks had pulled away from low-margin manufacturing, but I see it differently. By scaling volume, even at lower margins, the cash contribution increases. So we’re doing the opposite: we want to grow our own label production. We’ll start with our own brand, then move into supermarket and private-label contracts. Our current plant is at 30–40% capacity and already profitable. Scaling that up would generate even more cash. We’d gladly take on additional private-label business when the time is right.

01/07/2025 Was the £1.2 million ransom payment to Typhoo suppliers anticipated pre-acquisition?

Sandy Chadha: When you buy a business in three days, there’s limited time to uncover every liability. That said, even with hindsight, I’d have paid double. So no, we didn’t anticipate it, but the overall deal was still worth it.

01/07/2025 Was the £1.2 million ransom payment to Typhoo suppliers anticipated pre-acquisition?

01/07/2025 Is Supreme planning investments in other categories, and what ROI do you target?

Sandy Chadha: We target a two- to three-year payback, which is a strong return profile. Yes, we’re actively looking, there are three or four live offers out. Not all will close, but we're pursuing them seriously.

02/07/2025 Was the £1.2M supplier payment anticipated when acquiring Typhoo?

When you buy a business in three days, it’s hard to know every detail in advance. But knowing what I know now, I’d have paid double. Fair value becomes clearer in hindsight.

02/07/2025 Is Supreme investing in other categories, and what is your ROI target?

Yes, we are looking into new segments. Our ideal ROI is a full payback in 2–3 years. For exceptionally strong businesses, 5–6 years may be acceptable. We currently have three or four offers out, nothing confirmed, but we’re actively exploring M&A opportunities.

Competitive Advantage

23/07/2021 How does Supreme compare to competitors across categories

We don’t have a direct, single competitor. In batteries, lighting, and vaping there are many players, but few operate at our price point or scale. In vaping, we’ve seen cases where cheaper alternatives failed to outperform our 88Vape product, even when sold side-by-side in discounters. We’re well established in those retail channels. In sports nutrition, it’s a fragmented space, mostly focused on the premium end, our positioning is different.

09/12/2021 Why do you describe the acquisition of Sci-MX as your best ever?

Sci-MX was a brand we admired even before entering sports nutrition, it was aspirational for us. Being able to acquire it was a major milestone. It’s a heritage brand that triggered widespread recognition, with other brand owners reaching out post-deal.

It also unlocked major retail accounts like Tesco, Sainsbury’s, and Morrisons. Previously, we didn’t have direct access to them, and now we do. That access alone adds huge value, enabling us to push other Supreme products through those channels. The payback should be fast, though the timing wasn’t ideal, rising whey prices have squeezed margins. But perhaps that’s also why the deal became available. Despite short-term pricing headwinds, Sci-MX is a top-tier brand in its category, and we believe it was a strategic and high-potential acquisition.

25/04/2022 How confident are you in disrupting Holland & Barrett?

Sea Lions only launched around June or July last year and has already delivered strong organic sales without any marketing spend. We’re about to launch a pet vitamins range and will begin testing marketing strategies then. We’re excited about vitamins long-term. We have a small budget and it will take time, but in these online businesses you often see a few years of slow build followed by rapid growth. We’re confident that’s ahead of us.

25/04/2022 Would pricing vitamins higher make customers view them as better quality?

It’s possible, but that goes against our value proposition. The Sea Lions brand was built to disrupt with an entry-level price, £5 for a six- or twelve-month supply. That’s our unique selling point. Raising prices would dilute that. We heard the same skepticism when we launched 88Vape at £1, but seven years later it's clear value works. In fact, 70% of surveyed consumers said they’d choose 88Vape at £1 even if a competitor sold for 85p. Sea Lions will also grow over time, organically and patiently. There’s no shortcut.

07/07/2022 Are your lighting licensing agreements secure?

Yes, all our lighting licenses are secure. Most were renewed last year and are typically five-year terms. This is our third or fourth renewal cycle with some of them. One new license was supposed to launch but has been delayed due to customer overstock, not any issue with the agreement itself. We’re also adding another license in the same category, which further strengthens the portfolio.

07/07/2022 Is the direct-to-consumer model more appealing for your vaping brand?

Yes, it’s increasingly appealing. Sea Lion, our D2C brand, has already collected thousands of positive Trustpilot reviews. It's growing steadily, and while it's a slower build, we expect it to grow week by week, month by month. We have full confidence in its long-term success.

06/12/2022 Wouldn’t raising prices improve your brand perception, given that very low prices may suggest lower quality?

We're seen as a budget or entry-level brand, for instance, we sell Atma products for £1 and have 1.2 million regular users monthly. These customers continue to buy from us every week, so satisfaction is clearly there. I don’t think raising prices just to improve brand image is the right move. We can elevate brand perception through product quality, ensuring zero defects, and maintaining trust. I personally read every single product complaint in the company. Our focus is on consistent quality and value, not artificially inflating prices to seem more premium.

07/07/2023 What revenue and margin profile do you expect from Super Dragon?

Super Dragon is a private label, so while we can't disclose details due to NDAs, I can say that its margin profile is essentially identical to our existing manufacturing operations. It's one of the few competitors at the 10mL discount tier, so manufacturing and process alignment was strong. We acquired the business on April 1st, shut its operation within seven days, and integrated it fully within a week. We've developed a very effective blueprint for executing these integrations quickly.

07/07/2023 Have you explored launching white label or affiliate programs with fitness influencers?

We're not doing traditional white label, but we’re launching two new initiatives , Cymax and Sea Lions , which are detailed incentive marketing programs running over the next six months. They're starting soon, include celebrity involvement, and are fully built into this year’s budget. We're excited about it.

While it’s not quite a white label setup, we are looking at opportunities where our products appear on third-party sites. The only near-white-label initiative is one where our products are rebranded with different packaging and sold on another site, though it's still clearly ours. We’re not offering full third-party private label manufacturing at this stage.

07/07/2023 What white label opportunities might exist with supermarkets going forward?

We're in the final two for a major bid with a well-known supermarket for their private-label lighting business, which is a significant opportunity. Selling more to existing customers is much easier than acquiring new ones, and we see potential for selected white label arrangements with supermarkets.

There are definitely ways we can expand within those existing relationships. It’s a smart route to increase volume without the same customer acquisition costs.

29/11/2023 Is Elf taking the same proactive steps on packaging and flavors as Supreme with 88 Vape?

Yes, they’re working on it. For example, they’re rolling out recycling bins in thousands of retailers, some jointly with us. They’ve become more vocal and are definitely active in trying to prevent underage vaping. Their stance is aligned with broader industry efforts, including ours.

29/11/2023 Is Elf taking the same proactive steps on packaging and flavors as Supreme with 88 Vape?

26/11/2024 Are the Elf Bar and Lost Mary agreements up for renewal?

There are no formal contracts; they’re ongoing supply relationships, just like we have with Duracell or Energizer. As long as the customers want to keep buying from us, the business continues. We maintain 99% stock availability for major supermarkets and deliver excellent service, which makes us a reliable partner.

20/11/2024 How did you break into the lighting category?

We knew we needed a credible brand to make lighting work, not just a private label. I was literally wearing an Eveready t-shirt at a retreat when a friend commented on its nostalgic value. That sparked the idea. I contacted the Energizer sales director, who I had a good relationship with, and pitched taking the Eveready brand into lighting. He liked it. I pushed hard, and within two to three weeks we had the license signed. Three months later we launched a full lighting range to 600 customers. It was a huge success. We also brought in David Neelan to lead lighting, he knew bulbs well but not sourcing. I told him not to worry about that part, we’d handle it.

20/11/2024 What’s your view on branding in categories like energy drinks or water?

Some of the most successful brands make no logical sense at first glance. Take Liquid Death, it's just water in a black can that looks like beer. Or Red Bull, which is tiny, expensive, and frankly tastes awful. But it's still wildly profitable. If I pitched a board with an idea like Liquid Death, naming a drink 'Death' and selling it in a beer can, they’d laugh me out of the room. But now it’s a billion-pound brand. People assume logic wins, but in branding, sometimes the outlandish stuff works best.

20/11/2024 What made vaping an attractive category for Supreme to enter?

We looked at several criteria: is it an emerging market? Will our customers eventually buy it? Is there fragmentation and no dominant player? Can we manufacture it? Can we apply a brand? Is there price disruption potential? Vaping ticked all those boxes. It reminded me of batteries, sold almost everywhere, no clear leader, and a chance to disrupt on price. Markets with dozens of small players and big tobacco sitting quietly in the background are ideal for us.

28/11/2024 You mentioned non-vaping revenue could reach 60%, can you elaborate?

Right now, non-vaping revenue is about £100 million of our £204 million turnover. With the acquisitions we’re targeting and growth in areas like drinks, we believe non-vaping could exceed 50% within 3–4 years. But I want vaping to keep growing too, the aim is for non-vaping to grow even faster. It’s tough, and the team is working hard on this diversification. When tax comes in, consolidation will follow, and that gives us room to increase margins, similar to what tobacco companies experience when excise goes up. In fact, we recently raised the 88 VAPE price and may do so again, not because we need to, but to support future investment.

05/06/2025 Who are you competing with for acquisitions, and how do you source deals so quickly?

The competition varies by industry. With TYU T, we were up against the incumbent management team backed by private equity, but we closed the deal in three days. With Syx, it was broadly marketed across the wellness sector. Our strategy is to move fast, make fair cash offers, and complete deals quickly, often before others finish first-round bids. For Syx, we received the IM, submitted our offer the same day, got accepted in three days, and closed in three weeks. Across 17 deals, few took more than three months. Speed, certainty, and cash drive our edge.

01/07/2025 What did you do about the quality concerns linked to Typhoo’s reduced number of tea suppliers?

Sandy Chadha: One of the reasons Typhoo struggled was that they limited sourcing to just three gardens, chosen not only for ethical standards but for enhanced certifications around women’s rights. That drove prices up unsustainably. We’ve retained ethical accreditations like Rainforest Alliance and the Ethical Tea Partnership, but aligned our sourcing with what our competitors do. This let us open up to more gardens, lower input costs, and potentially hit the 30% gross margin we discussed earlier.

01/07/2025 What did you do about the quality concerns linked to Typhoo’s reduced number of tea suppliers?

02/07/2025 Is the 30% gross margin target for Typhoo tea still realistic now that you're manufacturing in-house?

Absolutely. Once we’re fully scaled and manufacturing all the black tea internally, we expect to hit at least 30% gross margin. Why couldn’t the previous owners do it? That’s true across many areas of our business, we’re leaner, more efficient, and more focused. We wouldn’t make the commitment if we didn’t believe we could deliver. We’re confident we’ll achieve 30% now that production is internal

02/07/2025 What actions did you take to fix Typhoo's taste issues after supplier consolidation?

The previous owners limited sourcing to just three gardens focused on extreme ethical credentials, including women’s rights, which pushed prices to unsustainable levels. We’ve maintained strong standards, Rainforest Alliance and Ethical Tea Partnership certifications, but aligned with what competitors are doing. That allowed us to reopen the supply chain to a wider set of gardens at better prices, which directly supports our 30% margin target.

Operations

23/07/2021 Are shipping cost increases causing supply delays and margin pressure?

Yes, shipping has been difficult across the board. Fortunately, we’ve just renewed a 12-month contract, so we’re somewhat protected. The bigger issue is delays, containers booked for four weeks out are getting pushed another two, sometimes more. That impacts our lighting category especially, as many of our customers buy FOB and struggle to collect on time. Margins, however, should hold up because of our contract, unless we’re forced to air freight, which we’re avoiding. Overall, we’ve done well to insulate the business and spread risk across five distinct categories, so one area’s disruption doesn’t affect the entire operation.

23/07/2021 How is manufacturing and logistics evolving within the vaping category?

Last year, we air-freighted a lot of product because demand was so high. We manufacture the liquid in the UK, ship it to China for encapsulation, then bring it back. The first half of the year was air-freight heavy; in the second half, we moved to sea freight, which helped margins. Now, we’ve started manufacturing capsules in the UK, 20% is already local, which removes the need to send liquid abroad. We’ve partnered with a firm in the northwest and plan to transition the full capsule process from China to the UK within 12 months.

25/04/2022 Can you explain why overheads are higher than pre-IPO guidance?

There are three main reasons. First, general inflation, transport, wages, utilities, just like every other business. Second, IPO-related investments we didn't have full visibility on pre-IPO. Third, we’ve made conscious changes in advertising and marketing, particularly in sports nutrition and wellness, where brand visibility matters more than ever. This wasn’t a year to cut back, it’s strategically smart to invest in brand presence now. So yes, part of the overhead is inflation, and part is planned investment. But it’s not about losing financial discipline. We’re still running the business tightly, just adapting where it makes sense.

25/04/2022 Are rising labor and energy costs a reason to bring more manufacturing in-house?

Inflation is everywhere, and while electricity matters, it won’t materially shift our economics. Labor is more significant, and we've always said that if labor costs to manufacture locally are under 10% of the product cost, and there's demand, then UK manufacturing makes sense. We're always looking at those opportunities.

25/04/2022 How much of your cost of goods is freight, and have surcharges increased?

All our UK freight is handled by third parties. Yes, there have been surcharges, and we’re addressing that by reviewing our minimum order value, from £200 to £250. It’s one of many small steps we’re taking to offset cost increases across the board.

25/04/2022 Why is there a rise in stock build and receivables, and a drop in payables for FY22 vs FY21?

The higher debtors are due to a strong finish to the year and have largely unwound in April. As for stock, we made a deliberate investment to get ahead of raw material inflation. Where we couldn’t lock in prices contractually, we physically bought inventory early to delay future price increases. It’s a purposeful hedge against rising costs.

07/07/2022 Will you change your FOB approach with lighting customers?

No, the FOB model works well for both sides. It's lean, little overhead or handling on our side, and suits the customer. The only real adjustment will be recalibrating customer stock levels, but the structure itself doesn’t need to change.

07/07/2022 What’s the status of the new, larger premises?

Progress is slow. Given the recent profit warning, expanding facilities isn’t a top priority. The slowdown in lighting frees up space, reducing urgency. We’re still reviewing options cautiously, focused on securing the right site in the right location under the right financial terms, but there are no commitments or imminent plans.

07/07/2022 What gross margins do you expect after bringing manufacturing in-house?

Vaping manufacturing is already in-house, with current margins in the mid-40% range. The main variable is the growing share of disposables, which are lower margin as they’re sourced from China. If disposables grow significantly, they could dilute the overall vaping margin. For sports nutrition, margins are currently compressed due to high whey and raw material costs. Over time, as we scale and bring more production in-house, and as whey prices normalize, we expect margin recovery. The trajectory is upward, but timing depends on macro trends.

06/12/2022 Are your formulations made in China or produced locally?

Some of our liquids and disposables are made in China, but everything is based on our own recipes and formulations, which we own. We sometimes send out liquid products for manufacturing, including some of the ones we use in prisons, but the intellectual property is ours.

06/12/2022 Has the flavor core business relocated to Trafford Park?

Yes, it has.

06/12/2022 Do any legacy lease costs remain from the Trafford Park sites?

The Trafford Park facility is less than a quarter mile away, so from a practical standpoint, the transition is smooth. On a cash basis, for our primary sites, there’s minimal overlap, we're handing back keys almost immediately after moving into Arc. Fit-out will take about eight weeks, and the first 12 months of Arc are rent-free. For smaller sites where we had overflow space, there will be some double rent. We're actively looking at subleasing those to minimize exposure. Importantly, any double rent will be adjusted out for reporting purposes and won’t distort our overhead base.

06/12/2022 Do any legacy lease costs remain from the Trafford Park sites?

29/11/2023 Can you elaborate on efficiency gains from the new warehouse and quantify them?

We haven’t quantified those gains yet. We might revisit that at year-end once we have more data. We moved into the new facility in July, so it’s still early. What we do know is we’ve consolidated warehouse operations, reduced the number of physical sites, and are processing more orders, especially after integrating Liberty Flights and Super Dragon. Importantly, we’ve done all that without significantly increasing headcount, which clearly indicates higher efficiency.

29/11/2023 Can you elaborate on efficiency gains from the new warehouse and quantify them?

29/11/2023 Do you have any volume KPIs across divisions? Let’s start with vaping.

We don’t measure vaping by volume externally, it’s more sales value focused. But in manufacturing, we track volume daily: number of bottles filled, pouches produced, vitamins potted, etc. That data is shared with management each morning. Volume measurement is very rigorous in manufacturing, less so in distribution.

29/11/2023 Why were most vitamin products sold out recently on your website?

That was a temporary stock issue. We're waiting for replenishment from SE lines. There was a rush before Black Friday, but we expect to have much better availability in the next couple of weeks.

03/07/2024 Are there integration challenges since Clearly Drinks can’t be manufactured at ARC?

Correct, Clearly’s manufacturing can’t be moved to ARC. But other efficiencies are possible. The buying teams are collaborating on packaging procurement, and we’re identifying multiple integration angles. The manufacturing staff are critical and will remain in place, but we’ll gain synergies through warehousing and distribution.

For example, they currently pay third parties for storage, whereas we’ll use our own distribution centre (DC Arc) at no cost. Synergies will flow both ways, they’re ahead of us in ESG, accreditations, and manufacturing efficiency, so we’ll learn from each other. The integration is about mutual reinforcement, not just centralisation.

03/07/2024 How many hours a day do Clearly’s bottling and canning lines run, and how much can output increase without capex?

Currently, they run at about 40% capacity. Without any capex, we can increase that significantly. That figure doesn’t include the pilot lines, if we deploy five, each doing 4,000 cans/hour, we’re talking 20,000 cans/hour of additional capacity.

The site is already capable of running three shifts a day (24/7), though they don’t operate at that level now. The infrastructure is in place; it’s just a matter of scaling up when needed. With approximately £1 million in spend, we believe we can reach 50–60% capacity.

03/07/2024 Are you manufacturing nicotine pouches in-house or sourcing them under own label?

We’ve launched our own brand, 88 Nick. Right now, we’re sourcing from a third-party manufacturer in Europe, but if it’s successful, we’ll bring production to the UK. At retail, they sell for £6.50, but our customers can offer them for £2–£2.50, so we’re positioned well on pricing versus competitors.

03/07/2024 Has the Food IQ acquisition been integrated into ARC?

No, it’s being integrated into Traer, not ARC. We paid around £1.75 million for it, and it includes over £1 million in equipment we badly need. It doesn’t make sense to operate two separate sites long term, so we’ll consolidate into one in due course.

26/11/2024 Do you plan to bring 88 Nics manufacturing in-house?

Yes, we’re bringing manufacturing in-house and also exploring third-party manufacturing opportunities. While we're not fully satisfied with current nicotine pouch sales, growth has been strong from a small base. We’ve already invested in machinery to produce them in Manchester, and we expect production to begin by April next year.

20/11/2024 How did Supreme transition from a small family shop to a major battery distributor?

We were struggling financially at first and considered shutting down. Then I found a trade show at the NEC in Birmingham and decided to exhibit just to offload some stock. Someone gave us a batch of Duracell batteries on clearance, about £34,000 worth. We displayed a few on our stand, and suddenly everyone only wanted the batteries. That’s when I realized the opportunity: Duracell was a massive brand in supermarkets but unavailable in convenience stores and independent shops

I called Duracell repeatedly, wrote letters, but as a tiny operation with no real office, I wasn’t taken seriously. So I explored Europe and discovered batteries were cheaper in Germany due to the Deutsche Mark and brand pricing differences, Varta was number one there, and Duracell number two. I literally went through the Yellow Pages, found a supplier near Munich, flew out with a £10,000 bank draft, and bought stock. I brought it back, sold it quickly, reinvested, and kept repeating the cycle.

The key insight was that batteries were universally needed, sold in every kind of retail environment: hardware, petrol stations, toy stores, you name it. That ubiquity made it a powerful product to scale with minimal capital.

20/11/2024 What did you do to diversify the business after 2003?

We transitioned from being a grey market battery importer to official distributors for brands like Duracell, Energizer, Eveready, and Panasonic. Ironically, Duracell, who had ignored us years earlier, approached us to buy directly, as did the others. That solidified our battery margins and got us to that £2.8 million profit mark. But I knew in 2003 we had to evolve, so we looked at our 1,500 battery customers and thought: it's easier to sell new products to them than find new customers. One obvious area was lighting, many of our customers also sold light bulbs.

20/11/2024 How did you rebuild after buying the business back in 2007?

After the administration in August 2007, my father and I bought the business back. It was an incredibly painful period, suppliers went hostile, competitors came after our customers, staff were looking for new jobs, and everyone demanded cash up front. Even the window cleaner wouldn’t come unless paid in advance. We had to pay every creditor back and work hard to rebuild our reputation. Buying a business from administration, especially your own, is probably the hardest thing you can do as an entrepreneur. But if you make it through, it can also be the most rewarding.

20/11/2024 Was there any competition to acquire Supreme during the administration process?

Yes, the administrators had to market the business. Every single one of our competitors came in to evaluate it. But I still made the highest offer. I knew the business better than anyone and could see its true value. Still, the post-acquisition phase was brutal. Suppliers were bitter, and our two biggest, Duracell and Panasonic, accounted for more than 50% of our supply. I offered to pay them back over time and pay upfront going forward, but they couldn't move quickly enough. That’s when I called our biggest competitor, Anand International, and asked for help. To my surprise, they agreed to supply us for three months. I wouldn't be here today without that support.

20/11/2024 How do you test new brand ideas before launching them?

Social media has changed everything. You can test multiple concepts quickly and cheaply, brand names, packaging, offers, without even launching the product. Just run Facebook ads and measure response rates. It’s a form of live A/B testing before committing serious capital. There are also survey firms that do this at scale. I absolutely believe in doing as much research and validation as possible before going to market. It's a smarter, faster way to de-risk.

20/11/2024 How do you de-risk expansion into new product categories where you lack experience?

We de-risk by structuring internally like a startup. Take vaping in 2013, clearly a growth market. I don’t smoke or vape, but I knew we had to move. So I hired Mike Holliday to build our vaping category. I gave him a blank sheet and access to all our internal infrastructure, design, sales, finance, warehouse. That meant zero incremental cost. When we compete with other vaping businesses, we’re much leaner because they have full teams and overheads to carry. We already paid for ours. That cost advantage lets us

20/11/2024 How did you initially launch vaping under the 88Vape brand?

We moved fast, launched within three months. We offered a strong product at £1, while competitors were pricing at £4. But retailers rejected us. Nobody wanted to list 88Vape. So we made a costly but bold move: we gave Poundland £100,000 worth of free stock on a no-obligation trial. Within three days, the buyer called saying the stands were nearly empty. The CEO of Poundland even said it was their most successful new product launch. That validation led to a full rollout and immediate adoption by other discounters. Most people would’ve walked away after the early rejections, we doubled down.

20/11/2024 How did you navigate advertising and e-commerce challenges in the vaping space?

Vaping is heavily restricted. You can’t advertise on Facebook, Google, or most social media. That makes direct-to-consumer sales almost impossible to scale. So traditional retail became our route. We had to be smart about our pricing and positioning in-store to win consumers without digital marketing. That also made our low-cost infrastructure and retail relationships even more valuable.

05/06/2025 What is your strategy post-acquisition to improve profitability and extract synergies?

We focus heavily on SKU rationalization. Typically, 80% of profits come from the top 20% of SKUs, so if a company has 1,000 SKUs, maybe only 100 matter. Cutting the long tail reduces inventory, working capital, and complexity. We integrate customers into Supreme, many already know us, and onboard them into our systems and warehouse through a standardized process. We inherit the staff and identify top performers, maybe five out of fifty, who are truly value-driving. We don’t duplicate functions like finance or marketing; we retain high performers in product sourcing, sales, or R&D, enhance their compensation, and give them clear roles within our platform.

05/06/2025 How do you decide which brands or segments to focus marketing and resources on?

Each brand or division has its own leader who focuses entirely on that segment. They run the P&L and are supported by centralized shared services, warehouse, finance, back office. For example, Bethan leads our tea division; that’s her sole focus. Someone else runs batteries, another runs wellness. I work closely with the heads to develop ideas, launch new products, and drive growth. They report to me, but they own their domains operationally.

05/06/2025 Why did you shift from outsourcing to building your own tea manufacturing plant?

We’re an agile company. Initially, we thought tea manufacturing would be a hassle, so we planned to outsource. But after acquiring the business, Mike Holliday, our vaping guy, evaluated the equipment and said, “We already own £5 million worth of machinery, and we can run it at no extra cost.” He had a site ready and promised to get it running fast. He delivered. Now we’re producing millions of tea bags per day in Gloucester. It’s the simplest product we’ve ever manufactured, far easier than protein powders, vitamins, or vapes.

05/06/2025 Can you give an update on Clearly Drinks and the status of your pilot lines?

Our pilot lines are now fully operational. We’ve installed them to enable short-run tests, small-batch production for new ideas and flavors. They’re up and running, giving us more agility in the soft drinks segment, which is a major opportunity for us.

05/06/2025 How do your pilot lines improve agility in the drinks business, and what are your plans for scaling?

Our main can line does 40,000 cans an hour, you can’t stop that line just to test new products, it’s too costly. Our pilot lines only do 4,000 cans an hour, but they give us critical flexibility. We now have two, producing 8,000 cans an hour, and we’re adding five more because demand is so high we’re turning away business. The pilot lines allow us to take small orders, around 20,000 cans, and we use a sleever to apply branded sleeves to plain silver cans, this avoids the 100,000-unit minimum for printed cans and mirrors U.S. trends.

We also signed a unique deal with a major supermarket chain: they’ve given us 100 stores and a one-meter bay to test anything we want. They only pay when products sell, so it’s a risk-free trial platform. This allows us to test 20–30 new drink concepts, brands like Typhoon Tea, iced teas, energy drinks, and licensed products from Lamborghini and French Connection UK. Not all will succeed, but even if five work, that’s a win. This model minimizes downside and sets us up for scale.

05/06/2025 Are you still manufacturing nicotine pouches in-house?

Yes, we now make them ourselves in the UK at the same facility as other products. Initially, we started with a contract manufacturer, but we’ve since internalized production. I’ll actually post a LinkedIn video next week showing the setup. But we’re cautious, being public, anything we share is seen by competitors and customers, so we control what goes out very deliberately.

01/07/2025 Why wasn’t tea manufacturing placed in ARC, and why choose Gloucester?

Sandy Chadha: ARC was full and isn’t suitable for manufacturing, it’s a warehouse, not a plant. You can’t retrofit manufacturing into a distribution center due to health and safety. We acquired the Gloucester site because it was already being used by a third-party manufacturer producing our tea. We took over the site, business, and staff, making it a seamless transition. Coincidentally, it’s also a location we previously owned, so we know it well.

01/07/2025 Why wasn’t tea manufacturing placed in ARC, and why choose Gloucester?

01/07/2025 What changed post-reorg in terms of divisional management?

Suzanne Smith: Not much structurally. We still have product-specific leads. However, we’ve streamlined oversight, for example, hot drinks, cold drinks, and wellness now share innovation pipelines, customers, and sometimes manufacturing, so one manager oversees that full vertical. But product-level expertise remains intact and unchanged.

02/07/2025 Why wasn’t tea manufacturing set up at Ark? And why choose Gloucester despite its distance from Manchester?

Ark was at full capacity and is a warehouse, not suited for manufacturing. Converting it would have posed health and safety issues. Gloucester made sense because the tea was already being manufactured there by a third party. We acquired the site, business, and staff as a going concern, allowing for a seamless transition. So operationally, it was the most efficient and logical choice.

02/07/2025 Why was Gloucester chosen for tea manufacturing instead of using the Ark warehouse?

The Ark facility was already at capacity and isn’t suited for manufacturing, it’s a warehouse, not a production plant. Using it would create major health and safety issues. We chose Gloucester because the tea was already being manufactured there by a third party. We acquired the site, the business, and its staff as a going concern. Coincidentally, it's the old Syx warehouse we cleared out four years ago, so we know the location well. It made sense both operationally and strategically.

02/07/2025 Which division do cleaning products fall under now?

hey're now part of the drinks and wellness division. The cleaning category has been significantly downsized, it’s now a £4–5 million run-rate business focused on higher-margin janitorial products. We moved away from low-margin items last year or even earlier. The shift made the category smaller but more profitable.

02/07/2025 What changes were made to divisional leadership post-reorganization?

Nothing changed structurally, we still have category experts leading each product line. What we’ve done is consolidate oversight. For example, drinks now includes hot, cold, and wellness segments under one manager due to shared innovation pipelines, customers, and production. But deep sector knowledge remains within each team, and we don’t plan to alter that.

Competition

23/07/2021 What’s your view on further consolidation in the vaping market?

It’s already happening, and we expect it to continue. We're well-positioned to be part of that consolidation and intend to participate actively.

09/12/2021 Why aren’t you expanding vaping into the European market given its size and growth?

Expanding into Europe with vaping is difficult. Many retailers in countries like Germany and France simply don’t want to carry vaping products, especially those that don’t already sell tobacco. We’ve tried convincing major discounters, but they’re just not open to it. On top of that, legislation varies widely across countries, which adds complexity.

The more viable route is to acquire a UK-based business that already has significant European distribution. That’s faster and more effective than trying to organically build a presence abroad. We’ve seen others set up infrastructure in Europe only to pull back after struggling. The UK is actually the second-largest vaping market globally after the US, so we’re in a strong home market already.

09/12/2021 Has growth in your vaping division slowed, especially compared to global players like Vuse?

No, we don’t believe our growth has slowed meaningfully. There was a prison contract last year that inflated the prior year’s figures, so it’s more a base effect than a decline. The UK vaping market is still growing at 5–10% annually.

As for global players like Vuse, they’re backed by big tobacco companies with global distribution and massive reach. That’s a different scale entirely. That said, we believe 88Vape is firmly embedded in the UK market, our data suggests one in three vapers in the UK use 88Vape. Our customer loyalty is extremely strong.

25/04/2022 Can you comment on Sea Lions and Millions performance in vitamins?

Vitamins is a new category for us, about 10% of wellness, and it didn’t exist a year ago. We’re pleased with Sea Lions so far. Millions is listed in three or four retailers and doing okay, but Sea Lions has had the stronger impact. I can’t share specific numbers just yet.

25/04/2022 Are there any major retailers not yet stocking 88Vape?

Tesco, Co-op, and Wilko are the three biggest retailers we’re not yet in. We’ve tried repeatedly and we’re still in dialogue. Now that we’re in Morrisons and Sainsbury’s, we hope Tesco comes on board too.

25/04/2022 Does 88Vape really account for 30% of the UK vaping market?

The UK vaping market is estimated at £2 billion, but that figure includes hardware, DIY kits, and e-liquids. If you strip out everything except bottled e-liquids, the addressable segment shrinks significantly. When we went public, legal documentation confirmed 88Vape held 30% of e-liquid volume, not the total market including hardware.

07/07/2022 Can you be certain lighting customers aren’t switching to competitors?

We can’t be 100% certain, but we don’t believe that’s happening. Our customers are shopping in the same stores as before. If you talk to other lighting brands, manufacturers, Chinese suppliers, and the Lighting Association, they’re all reporting the same category-wide decline. This isn’t unique to us, it’s affecting the entire electrical fixture segment. Public competitors like Luceco are also seeing the same challenges.

06/12/2022 What is your market share in each vaping category, and how has that changed over the past year?

In open systems, specifically 10ml e-liquids, we estimate our market share is around 33% by volume. That’s a significant achievement for a value brand and reflects the high manufacturing output we manage. In disposables, one brand dominates the UK market, Elf Bar, so the field is highly skewed. While we don’t lead in disposables, many of our existing retailers for 10ml liquids are now also carrying our disposables. That’s increasing shelf space for Supreme and driving listings under our 88 Vape brand.

06/12/2022 Are you currently selling to B&M across Europe or only in the UK?

Only in the UK for B&M. In France, we sell to another chain called Babu, specifically for lighting and battery products.

06/12/2022 Are margins on disposables lower or higher than homemade UK products?

Margins on disposables are definitely lower than those on our UK-made products. If I ever implied otherwise, that was a mistake, I don't remember saying that. Disposables have structurally lower margins, particularly compared to products manufactured internally.

07/07/2023 What percentage of revenue comes from disposable vapes, and how will this evolve post-Elf?

In the last year, £12 million of our £155 million revenue came from disposable vapes. For the current year, analysts expect total revenue to reach about £190 million, with £25–30 million from Elf and £15 million from our core business. So yes, it's a growing proportion. We don’t deny the high exposure, but we prefer to focus on the absolute incremental earnings it generates for the group.

06/12/2022 Are margins on disposables lower or higher than homemade UK products?

29/11/2023 What choices would consumers have if disposables were banned?

Adult vapers have options. If disposables disappear, they could switch to alternatives, maybe with fewer flavors, move to TML, which is our hero product and more affordable, return to cigarettes, or quit entirely. We believe most would move to another vaping product. Worst case, if no one transitioned and disposables vanished, we still have cash on hand and profits from disposables to reinvest. But we think a transition to other nicotine delivery methods is more likely.

29/11/2023 What choices would consumers have if disposables were banned?

03/07/2024 What’s your view on Australia's move to control vaping, and is there UK risk?

Australia is dealing with illicit vapes and gang-related sales. It looks like they're already reconsidering and may reintroduce retail availability.

I suspect it won’t be long before legal retail sales return there. I don’t see that model being adopted wholesale in the UK.

03/07/2024 Given margin expansion across categories, is there a plan to lower prices and compete on scale, like Costco?

Yes, but selectively. The strategy is to find hero products with low margins that can drive volume and unlock sales of other, higher-margin items. We’re not lowering prices across the board, but we’ll absolutely sacrifice margin on strategic SKUs to gain market share. That’s how we built 88 Vape, our starting margin was just 10%, and volume drove the rest.

26/11/2024 What is your market share in eLiquids, and what does the competitive landscape look like for consolidation?

In volume terms, bottles sold, we hold about 30% to 35% of the UK market. The sector is highly fragmented with hundreds of small players doing between £1 million and £10 million in turnover. With new regulations on bonded warehouses, tax stamps, and compliance, many SMEs may find the requirements too burdensome. That opens two paths for us: gaining share as consumers trade down to our products, or growing through acquisitions. We haven’t yet committed to a roll-up strategy, but the opportunity is certainly there.

26/11/2024 Is there a competitive risk that consumers will switch from 88 Vape to Elf Bar or similar brands post-ban?

The customer bases are quite different. 88 Vape disposables serve discount shoppers, whereas Elf and Lost Mary target other demographics. We've launched a new device under 88 Vape that’s already performing well. I don’t see a major risk of customer migration, though of course we’ll monitor closely.

20/11/2024 Why didn’t retailers want to stock 88Vape at first?

In 2015, most buyers didn’t understand vaping. They lumped it in with cigarettes and said, “We don’t sell tobacco, so we won’t sell Vapes.” There was regulatory uncertainty and reputational fear. Also, because we were so cheap, existing sellers worried we’d devalue their category, cutting a £5 million segment to £2.5 million overnight. For retailers already in vaping, we were a threat. For those not in it, we were a risk. Poundland had nothing to lose and gave us that opening.

28/11/2024 What is your market share in e-liquids, and how do you view the competitive landscape and consolidation opportunities?

In terms of volume, number of bottles or units sold, we hold around 30–35% of the UK market. The space is extremely fragmented, with hundreds of manufacturers doing £1–10 million in turnover. Many of these will either shut down, sell, or restructure as regulatory requirements rise, bonded warehouse status, tax stamps, excise compliance. The opportunity is twofold: either consumers downgrade into our value-oriented offerings, or we acquire and consolidate these smaller players. We haven’t executed on that yet, but there’s no shortage of potential targets.

28/11/2024 Is there a risk that customers will switch from 88 VAPE to Elf or Lost Mary under the new regulations?

We don’t see that as a major risk. The customer profiles are quite different. Our discounter channel shoppers, where 88 VAPE is strong, tend to stay loyal and replenish with our products. Our new large-format 88 VAPE device is already performing well. So while we can't predict everything, we don’t anticipate a major shift toward Elf or Lost Mary at our expense.

28/11/2024 When do the Elf Bar and Lost Mary supply agreements expire?

They’re not fixed-term contracts. These are open-ended supply relationships, like we have with JTI, Energizer, and others. As long as customers want to buy from us, we continue supplying. There’s nothing contractually locking them in, but we maintain near-perfect stock availability and service for major supermarkets, which makes switching unlikely.

01/07/2025 Is growth in nicotine pouches a concern if it reduces vape sales? And what's the update on 88 Nick?

Sandy Chadha: Nicotine pouches remain small in the UK, dominated by Velo and Nordic Spirit. Outside those, the category is still niche. We haven’t factored major revenues into forecasts yet because consumer behavior is still evolving. That said, we’re prepared, we’ve installed a machine capable of producing 10,000 units per shift. If the category takes off, we can scale fast, including via private label in Europe. But for now, the uptake isn’t at the level we originally expected.

01/07/2025 Is growth in nicotine pouches a concern if it reduces vape sales? And what's the update on 88 Nick?

01/07/2025 Can you compete with Velo and Nordic Spirit in nicotine pouches given expected UK growth?

Sandy Chadha: Our prices are extremely competitive, and we are trying to compete. But consumer loyalty is strong in this space, it’s tough to switch someone already used to a brand. It may be more productive to focus on international markets like Scandinavia. The product is stocked in major discounters like Home Bargains and B&M, but sales velocity has been underwhelming.
Suzanne Smith: It’s not a threat to our vaping business. It’s there on the shelf, but not moving the needle.

02/07/2025 Is growth in nicotine pouches a concern for vape sales? And can you update us on 88 Nick?

Nicotine pouches are still very small in the UK, dominated by two brands, VO and NI Spirit. Outside those, the segment remains niche. We haven’t baked major revenues into forecasts yet since the trajectory is still unclear. We do have capacity, one machine can produce 10,000 units per shift, and we’re ready to scale if demand rises. There’s also private label potential in Europe, especially if we pursue trade shows. For now, growth has been modest and consumer uptake slower than expected, but we’re prepared to respond quickly if that changes.

02/07/2025 Can Supreme realistically compete with Velo and Nordic Spirit in nicotine pouches?

We’re trying, our pricing is competitive. But brand stickiness is strong in this category. It may be more effective to focus on regions where nicotine pouches are already mainstream, like Scandinavia. In the UK, growth is slower, and regulation is likely. That said, we’re in major discounters like Home Bargains and B&M. If demand picks up, we’re ready. But for now, it’s not threatening our vaping business, it’s a complementary product with slower uptake.

Growth

23/07/2021 Can sports nutrition and vitamins match vaping in revenue contribution in the next few years?

You've got two perspectives. One is optimistic, we could hit £100 million in a few years. The other is cautious, we need more certainty before committing to a number. But we meet somewhere in the middle. So yes, we do believe sports nutrition and vitamins can be as big as vaping in the future.

23/07/2021 Has the business considered expanding the wellness category to include products like CBD?

Yes, we did try CBD and even own the cbd.co.uk website. However, due to regulatory challenges, especially around novel foods, we decided to step back from it for now. That said, our Sea Lions brand won’t remain at 32 SKUs. In three months, we’ll have 100 SKUs; in a year, 350. In two years, we aim to become a digital version of Holland & Barrett, but at 70% lower prices. That’s our ambition. Whether we hit it or not, we’re committed and investing behind it as our first true digital brand.

23/07/2021 Are there plans to expand into additional product categories?

Yes, but gradually. Wellness has vast potential on its own, we could keep growing within it for years. We're cautious about entering new categories; each one brings resource and operational complexity. That said, if we do launch something new, it’ll be with the right team and infrastructure behind it.

23/07/2021 Are you planning to expand 88Vape into Europe or the U.S.?

Europe is tough for us in vaping, but vitamins and wellness have better prospects. Our Sea Lions product has a multi-language peel-and-reveal label, and we’re exploring platforms like Ingenuity for European expansion. But we need to get it right in the UK first before scaling overseas.

09/12/2021 Are you planning to expand vaping into adjacent categories like nicotine pouches or snooze?

We’ve explored adjacent categories such as nicotine pouches. We tested them with customers, but uptake wasn’t strong, so we haven’t done a major launch. Our approach is always to test new products carefully before committing further resources.

That said, we keep an eye on emerging trends. If a category like snooze or nicotine pouches gains significant traction and we see real consumer demand, we’ll be ready to move quickly. We just haven’t seen that signal yet.

09/12/2021 How has the vitamin brand “Millions and Millions” performed since launch in Poundland?

It launched in Poundland around August or September and has done really well. The retailer has been very pleased with the performance, we’ve already been asked to add more SKUs and increase shelf space. The upcoming ad campaign in January should give it an additional boost. Poundland is our only major retail partner for now, but by the end of January, we’ll have clearer data from others.

09/12/2021 Do you agree with Berenberg’s estimate of 80% organic growth in sports nutrition and wellness over the last six months?

Yes, that’s accurate. We guided Berenberg to that 80% figure.

09/12/2021 Are there any obvious new categories you’re looking to expand into, what about CBD?

CBD is something we’ve actively avoided for now. The novel foods framework really disrupted the industry, and we view it more as a novelty than a viable long-term category. While some companies have done well, many haven’t. We do own the “CBD Doctor” brand, but that’s entirely third-party fulfilled, we don’t manufacture or hold stock ourselves.

09/12/2021 Is online vaping sales growth continuing, or has it plateaued?

Online sales spiked during COVID, up about 300%. This year, it’s flat year-on-year, but that’s on top of that massive growth, so we see it as a strong retention story. Many peers saw a drop; we’ve maintained that volume. We can’t do paid digital advertising for vaping, so it’s all organic or billboard-based.

We’ve worked hard to keep those customers coming back post-lockdown. That includes exclusive product development available only online, which gives customers a reason to return and spend more.

25/04/2022 Are you pleased with only 10% vaping growth, or did lumpy contracts and lockdowns mask a stronger year?

We’re really pleased with the vaping growth. There are a few parts to that category. The main driver is our core 10ml bottle product, which remains the most profitable part of the business. In addition, we had the full rollout of the prison contract and strong growth in our direct-to-consumer online sales early in the year, both of which started from high bases, so naturally they brought down the overall growth rate. To still deliver 10% growth in that context speaks to the enduring strength of the core product.

25/04/2022 Did vaping slow down in the second half, or is growth continuing?

It hasn’t slowed down. The apparent drop from 13% in the first half to 10% in the second is due to seasonality and the prior year comparison, which included COVID distortions. When you strip those out, the underlying growth rate remains consistent. We’re not seeing any slowdown, vaping continues on the same trajectory.

25/04/2022 What are your growth initiatives in vaping?

The category itself is growing, with the government still targeting a smoke-free Britain by 2030. There are 6 million smokers left to convert. We’ve gained new listings, like an FSDU in Morrisons, which launched in January and is performing well. We’re investing in new product development, including pod systems where we offer the battery for £2 and recoup costs via pods, and disposable vape pens which are gaining traction. These initiatives support our analyst forecasts.

25/04/2022 Have you considered insect protein or other sustainable protein sources?

Yes, someone mentioned insect protein, it’s an interesting idea. We'll look into it further. In our upcoming pet range, we’re using similar formulations to our human line, just repackaged. It's common in the market. Pets is a premium category with good margins, so we’re optimistic. Insects could be a future opportunity.

07/07/2022 Are your products listed in Tesco or Costco?

Yes, Battle Bites is going into Tesco, and Cymex is on trial in Costco. Cymex also gave us immediate access to Morrisons and Tesco. We were already lightly present in Sainsbury’s through Battle Bites, but these acquisitions helped deepen relationships across all three. We now have an 88 Vape rollout across Morrisons, including a full-store FSDU, which is a major win. In Sainsbury’s, we’ve started with clearance lines but opened the door for broader discussions. Liberty Flights is also bringing new opportunities. We’ve listed our disposables too, millions of units, and these are now part of the growing cross-sell strategy.

06/12/2022 Of the 19% revenue growth, how much is due to volume versus price?

I'm pretty confident that all the growth is inflationary. Volumes are roughly the same as before, but prices have gone up. What's encouraging is that sales didn't drop as I expected when prices rose. For the second half of the year, we expect volumes to increase while prices remain stable, which should support better margins

06/12/2022 What’s your strategy for European vaping expansion, and which countries are priorities?

Tea Juice was already stronger in Europe than the UK, which made it an attractive acquisition. In fact, the best-selling E-liquid flavor in France, Red Astaire, is part of their range. We've kept their sales team, which gives us established distributor relationships, especially in France. We've already started cross-selling 88Vape products there. We're also adapting packaging for Germany due to new tax rules. Beyond France and Germany, we're prioritizing Italy and Spain, they're large vaping markets, and we have good sales representation in those regions.

07/07/2023 What is your international exposure and key growth opportunity outside the UK?

With the Tea Juice brand, our French partner LDP now owns it, they paid £4 million after a short ownership period, so their intention to grow it is clear. We're the manufacturer, and we’ll work closely with them to expand not just Tea Juice and Red Astaire, but our full vaping portfolio across France and Europe. First priority is expanding the Tea Juice range, adding SKUs and variants. Next will be broader opportunities, including possible entry into hardware. They’ve pushed us to consider hardware given its scale in the European market. We’re exploring options, but it’s early, no specific revenue numbers to share yet.

29/11/2023 Will the new Simpex products like Explode Drink and Mass Protein be focused on retail or direct-to-consumer?

Both. They’re already in B&M and doing well. We’ll expand our e-commerce offering with more flavors and choices online, but retail remains our main sales and distribution channel. So we’ll continue pushing forward on both fronts.

29/11/2023 Outside vaping, which divisions offer the most growth potential over the next 3–5 years?

It has to be wellness. There are a lot of mid-sized businesses, £10–40 million in revenue, not making money. With interest rates high, they’re under pressure, making them attractive acquisition targets. We’re looking to buy manufacturers, brands, and sellers in the wellness space. We could write a £50 million check today without bank funding if the right opportunity came along. That would supercharge our expansion in that segment.

29/11/2023 Do you have any plans to expand into Europe?

Yes. Europe is a focus area. We're launching a business-to-business trade website specifically for Europe, modeled on our UK site, which does about £1.3 million a month. The European site is in testing now, and we’ll soon begin targeted AdWords campaigns to drive traffic.

26/11/2024 Besides Spain, are you considering entering other international markets?

Yes, we are. It’s all work in progress, but we are actively exploring opportunities beyond Spain.

26/11/2024 Can you elaborate on the goal for non-vaping revenues to reach 60%?

Right now, non-vaping revenue is around £100 million of our £204 million total. With planned acquisitions and the growth of categories like drinks, we aim to exceed 50% non-vaping share within 3–4 years. The goal is not to shrink vaping, but to grow non-vaping faster. It's ambitious, but our team is focused on diversification. As tax pressures increase, larger players can capture margin, just like tobacco companies have historically done. We've already raised 88 Vape prices and may do so again to support required investments.

26/11/2024 Is there an opportunity to cross-sell between 88 Vape and wellness products?

I’m not sure. The perceived value of vaping presents a challenge in that space. Our original intent was to help people quit smoking, but the last few years have changed the landscape in unexpected ways.

20/11/2024 What does Supreme PLC do and how is the business structured today?

Supreme is a fast-moving consumer goods business listed on AIM. We operate as a manufacturer, brand owner, licensee, and distributor. Our main product categories are batteries, lighting, vaping, wellness, and soft drinks. Currently, we serve about 6,000 customers and supply roughly 40,000 retail outlets across those categories.

20/11/2024 How did you grow so quickly in the early days, and what was your margin strategy?

We were lucky with hiring Andrew Bowmont, who stayed with us for 35 years and just retired. He focused on sales, I focused on buying, and my dad managed the cash. It worked well, we were six people and grew the business to about £3–4 million within 18 months just by selling batteries. Our strategy was to be disruptive on price. We kept overheads incredibly low, targeted a 10% gross margin with no more than 5% overheads, leaving 5% net. It was simple math, but it worked. For the first six to seven years, we got to £10–15 million turnover keeping costs disciplined.

28/11/2024 Are there any new categories you'd like to enter?

Yes, there are a few we're actively exploring. I don’t want to share specifics because we’re already in discussions with multiple companies. But in broad terms, we’re interested in categories where we can own brands and manufacture in-house.

05/06/2025 Why are you selling third-party pouches on your DTC sites, and how are you thinking about channel strategy?

We operate two main direct-to-consumer sites: 88vape.com and 88nick. 88vape gets around 3,000 orders a day, so we’re turning it into more of a multi-brand platform, not a full marketplace, but a broader range. That includes selling third-party nicotine pouches. We believe 88vape will generate far more pouch sales than 88nick, just based on volume. We also have Sealions, our vitamin brand, which is now doing over £120,000 per month in online sales after starting from zero two and a half years ago. It's a tough space, but once it tips, it’ll grow fast, and we’re nearing that inflection point.

05/06/2025 What progress have you made on international expansion, particularly with the Spanish JV?

Yes, internationalization is a key part of our forward strategy. As I mentioned on the last earnings call, we’ve signed our first agreement with a joint venture partner in Spain. That’s just the beginning, our intention is to replicate successful elements of our UK business model abroad, starting with that JV. More to come as it develops.

01/07/2025 How will international operations be reported, e.g. vaping in Spain, tea in India?

Suzanne Smith: Yes, Spain will be reported under vaping, and if the India tea license goes ahead, it would fall under tea. Historically, we've been UK-centric, but some of our current M&A discussions include international elements. That could be how we expand abroad, through acquisition, rather than launching from scratch. That said, Supreme changes quickly, and we remain open to any opportunity in the right market with the right products.

01/07/2025 How will international operations be reported, e.g. vaping in Spain, tea in India?

01/07/2025 What organic growth rate do you expect in Drinks & Wellness, and how much will come from price versus volume?

Suzanne Smith: We’re aiming for 10% annual growth in that category. Next year may see more due to full-year contributions from recent acquisitions. There’s strong customer interest now that we’re manufacturing drinks, but we need to see how much converts into sustained volume.

Sandy Chadha: The growth will come from volume. We don’t plan to raise soft drink prices significantly, that’s not our strategy.

01/07/2025 Are you happy with Cymax’s growth since acquisition?

Sandy Chadha: Yes. We bought it for £1 million when revenue was £6 million. It’s now turning over £10 million, so we’re very pleased.

02/07/2025 What are international plans and how will these be reported? Will vaping sales in Spain, Romania be reported in the vaping category and tea in India in the drinks category?

Yes, that's the plan. Spain falls under vaping, and tea in India would sit under international tea. Historically, this has been a UK-centric business, but some of the M&A opportunities we're exploring involve international assets. That could allow us to enter new markets via acquisition rather than building from scratch. As always with Supreme, things change quickly, and nothing is off-limits, if the product, market, and opportunity align, we’re open to it.

02/07/2025 What organic growth do you expect from drinks and wellness, and how much will come from price versus volume?

We aim for 10% year-on-year growth. In the short term, we’ll benefit from the full-year effect of recent acquisitions, so we expect more. There are plenty of opportunities, brands, licenses, and customers excited about our move into drinks manufacturing. As for price vs. volume, most of the growth will come from volume. Raising prices broadly across soft drinks isn’t part of our strategy.

Financials

23/07/2021 Why is the effective tax rate elevated this year?

It’s due to IPO-related costs, about £2 million in advisory fees, which are not deductible for corporation tax. This temporarily inflates our effective tax rate. In a normal year, we expect it to align with the prevailing UK corporate rate, as Supreme’s tax structure is straightforward.

23/07/2021 Are battery sales sourced directly and is the category in decline?

Yes, we buy batteries directly from manufacturers. The battery market itself isn’t in long-term decline, it’s more or less flat, not shrinking significantly.

09/12/2021 Gross margin is currently 30%. How will that evolve, especially with scale and category mix in sports nutrition and vitamins?

Vaping and sports nutrition are our highest-margin categories, and both are growing fast, so pure sales mix suggests margin expansion. If vaping grows faster, margins will expand quicker since its margin is higher than sports nutrition. But currently, there’s more activity and M&A in sports nutrition, which may shift the mix.
Within sports nutrition, powders (which we manufacture) have the highest margin, while vitamins, currently bulk-packed and potted, will see margin lift once we shift to in-house manufacturing. We're also planning to integrate the Cymex brand into our production, which will further support margin growth. However, expansion in lower-margin products like bars and drinks could dilute it. Advertising and upfront investments will also impact gross margin short-term. So overall, margins will go up, but the pace depends on growth mix and investment timing.

09/12/2021 Have you hedged whey prices after acquiring Sci-MX? How are you responding to cost pressures?

We’ve secured pricing until January and are actively increasing prices where needed. Everyone’s facing the same pressures, no one can source product more cheaply. We believe consumers will adjust to higher prices, and we’re confident that our pricing remains competitive. Let’s see how it plays out, but we’re in a solid position to manage the inflation environment.

09/12/2021 What is your customer concentration, how much revenue comes from your top customers?

Our largest customer accounts for about 15% of our revenue. Interestingly, we grew our overall revenue faster than the growth of that customer last year. I don’t have the exact percentage for the top three, but the top one alone represents around 15%, which gives you a sense of the distribution.

09/12/2021 Have price increases hit vaping? How long can you keep 88Vape at £1?

So far, I haven’t seen major price increases from competitors like Pukka, though they’ve made some changes. Interestingly, Asda raised the retail price of 88Vape to £1.15, but we don’t control retail pricing, and that’s their decision. Sales haven’t suffered, which suggests consumers are absorbing the increase, and retailers are improving margin. So we think £1 remains viable, and perhaps even higher in some stores.

25/04/2022 Why is there a rise in stock build and receivables, and a drop in payables for FY22 vs FY21?

07/07/2022 What was the sales mix between LED and halogen in 2022?

By 2022, nearly all our lighting sales were LED. Halogen bulbs were banned in 2018, so their contribution was negligible or non-existent that year.

07/07/2022 What’s the shelf life or obsolescence risk on the large inventory?

The biggest inventory buildup is in lighting, but there's no expiry date. We also invested in whey protein ahead of year-end to lock in prices as we saw sharp increases. It was a calculated move to protect margins, and we’re confident in both the decision and the volume bought. Lighting inventory was built up for similar reasons, raw material inflation and China supply disruptions, but again, bulbs don’t expire or go out of fashion quickly. The only obsolescence risk would be new lighting technology, which we don’t see on the horizon. So while it's not ideal capital deployment, the stock itself remains fully usable.

07/07/2022 What’s driving the surge in whey protein prices, and what’s your outlook?

Several factors are at play. Whey protein cost £4/kg in 2019 and now it's £10–11/kg. That’s our core input in sports nutrition. The Ukraine war hasn’t helped, and we can’t easily pass costs on because we sell through retailers, not direct-to-consumer. Fundamentally, it’s supply and demand: whey is a byproduct of cheese, and people have been eating less cheese during lockdowns, reducing supply. Demand has stayed strong, so prices rose. There are also theories involving China and swine feed affecting availability. It’s a global commodity issue, and we’re on the receiving end.

07/07/2022 What caused the working capital increase at year-end, and which division?

The increase referred to higher debtors at year-end. Our customers usually pay on a four-week cycle, and some payments simply fell just outside the fiscal year, likely due to Easter timing. There was no specific trend by customer or category, purely a timing issue.

07/07/2022 Why haven’t you raised protein prices like MyProtein or Bulk?

Those brands are e-commerce businesses selling direct to consumers, giving them full pricing control. We sell through retailers, which adds another margin layer and limits our pricing power. Retailers control shelf pricing, promotional space, and margin. It’s not comparable, e-commerce players can adjust prices in real-time, we can’t.

07/07/2022 How many e-liquid units did you sell in FY22?

In FY22, we sold 62.2 million units of 10ml e-liquid. But that’s just one part of the vaping category, disposables and pod systems also contribute significantly to our overall vape sales.

07/07/2022 How is wage inflation affecting your business?

We implemented a cost-of-living wage adjustment in April. While recruitment inflation exists, we’re not in a high-growth hiring phase, so the impact is minimal. We also retain staff through other means like our share schemes and enhanced benefits. It’s not causing financial strain or notable staff turnover.

07/07/2022 Will you disclose Liberty Flights’ EBITDA for the coming year?

We reported £1.5M EBITDA last year for Liberty Flights. While we don’t expect to radically restructure the business, we do expect EBITDA to grow. We’re already exploring supply chain synergies, potentially bringing manufacturing onshore or leveraging our vendor base for better rates. That should drive margin expansion. So yes, we expect Liberty Flights to contribute more than £1.5M going forward.

06/12/2022 When do you expect to recover lost gross margin and return to 2021 shelf prices?

There are two key areas where we lost margin, lighting and FOB, especially in Sports Nutrition. The second half of this year should be much stronger. If current deflation trends continue, we should return to previous margin levels in the second half of next year. Of course, I can’t predict inflation with certainty, but if it stays under control and prices stabilize or fall, we’ll be in a strong position. Our new manufacturing setup is also driving efficiency, which strengthens our outlook.

07/07/2023 How much revenue came from the prison contract?

Roughly £15–16 million.

07/07/2023 Are you seeing any pressure on payment terms from major retailers?

Quite the opposite. Our financial controller told me that at year-end we had £16 million in receivables, and apart from about £30,000, everyone had paid us by the time the audit was completed two months later. There's been zero pressure on payments.

Our products are among the most profitable parts of a retailer's store, and we manage stock directly. It doesn’t matter who you are , if you’re a day late, you're off. So everyone is just used to paying us on time.

29/11/2023 What is the gross margin split between e-liquids and disposables in your own-brand vaping products?

We don’t break gross margin down within a category. What we can say is margins on manufacturing, our own production, are significantly higher than on imported products, more than double in fact. Since so much of what we sell is manufactured, that lifts the blended margin. Manufactured elements are north of 50%, while the blended margin for the category sits in the mid-40s. Disposables remain on the periphery of our core vaping business.

29/11/2023 What is the gross margin split between e-liquids and disposables in your own-brand vaping products?

03/07/2024 What’s the expected timeline for the disposable vape ban and how will you manage inventories?

Originally, the ban was expected in April next year, but with the new government, it may need to go through legislative processes again. It could be delayed to summer, winter, or remain in April. We’re forecasting based on an April implementation, but it could be later.

Inventory management is key. We’re in discussions with retailers, either transitioning to pods early or agreeing on fixed stock levels and shared disposal plans post-ban. Since the ban was announced, we’ve tightened inventory control even further. Products now sit on our floor for only days or weeks. That working capital discipline is visible on the balance sheet. Also, this ban is UK-specific, we can export to Spain or other European markets, so stock won’t go to waste.

03/07/2024 Why have AE receivables aged over 31 days increased threefold while overall receivables rose only 50%?

There are no issues. What you’re seeing is a comparison against an unusually clean receivables profile last year. This year’s is slightly more aged, but still very strong. If you compare our debtor profile to others serving grocers and retailers, ours remains exemplary. The year-on-year comparison is what's making it look worse than it is.

03/07/2024 Why has revenue from France reportedly dropped over 50%?

I don’t think that number is accurate, but revenue has definitely decreased. The reason is we sold the business and lowered the price to the buyer. We used to own the brand, so we earned a brand margin. Now we earn a manufacturer’s margin, which is lower. That explains the decline, although I don’t believe it’s as much as 50%.

03/07/2024 What’s the margin difference between disposables and non-disposable vapes?

It depends on the mix. Selling the device (the kit) yields lower margins than disposables, but the replacement pods generate higher margins. Blended together, we expect overall margins to remain roughly in line with what they were pre-ban. We’re being cautious in our assumptions, but the outlook is stable.

03/07/2024 Is the battery division dragging down return on capital employed (ROCE)?

We don’t calculate ROCE by category because the overhead and working capital base is shared across the group. After gross margin, further allocation becomes speculative. That said, we don’t believe any single category is destroying value. All categories contribute positively at a margin level.

26/11/2024 Are the high gross margins in Batteries and Lighting sustainable, and what has driven the recent margin expansion?

In Batteries, the margin uplift comes mainly from sales mix. Historically, we distributed third-party brands, but now a larger portion of sales are from brands we license ourselves, which generate higher margins. Compared to two or three years ago, we're simply selling more of those higher-margin SKUs.

Lighting is different. A major customer switched from an FOB model, where we shipped full containers from China directly to them, to a sourcing model, where we now hold stock in Manchester and pick, pack, and dispatch it. This change improves reported gross margins, but it shifts certain costs, warehousing, insurance, handling, into overheads, which aren't directly attributed to Lighting. So while margins appear to expand, it's partially a matter of presentation. There are genuine improvements in sourcing and freight, but some cost absorption limits the overall profitability.

26/11/2024 Can you explain the cash flow impact of the October 26 excise tax, particularly whether you'll pay the tax before customer revenue is received?

The legislation details are still evolving, but yes, we expect to collect and remit the excise duty ourselves. Timing mismatches between when we pay the duty and when customers pay us could create working capital strain. A deferment regime is likely, and both we and some customers may secure bonded warehouse status to ease cash pressure. We're currently estimating a working capital investment of about £15 million to fund the increase in receivables. That figure assumes demand holds steady and that customer credit terms don’t shift in our favor, so the actual impact may vary.

26/11/2024 Is there any further update on the working capital needed for vape tax and VAT implementation?

The £15 million working capital estimate I mentioned earlier still holds, but the final figure depends on several unknowns: demand levels, deferment rules, bonded warehouse status (which we expect to obtain), and customer credit terms. Whatever the final amount, I’m confident it will be manageable for us.

20/11/2024 Was battery sales alone really that profitable at the time?

Yes, surprisingly so. Just selling batteries, by 2003 we peaked at £2.8 million net profit on £28 million turnover. But by then, 30% of our business was in products like camera film, audio tapes, and video tapes. Our biggest battery customer was Woolworths. So the next three to four years were tough, technology was making those products obsolete, and Woolworths was clearly in trouble. We had to completely rethink the business and pivot to new product categories.

28/11/2024 Are margins in the batteries and lighting divisions sustainable, and what has driven the recent expansion?

Let’s take them separately, because the drivers are quite different. In batteries, it’s mostly sales mix. That category includes both third-party brands we distribute and licensed brands we control. The licensed brands generate higher gross margins. Compared to two or three years ago, the mix has shifted significantly toward licensed brands, which has lifted overall returns.

In lighting, one key factor is a major customer switching from an FOB model to a sourcing model. Instead of them importing full container loads directly, we now hold and ship the inventory from our Manchester warehouse. That gives us a higher gross margin, but it also introduces costs, warehouse operations, lighting insurance, pick-and-pack, that sit in our overhead and aren’t attributed directly to the category. So while it looks stronger at the gross margin level, we must be careful not to overstate profitability, as some of the uplift is down to how we account for these changes.

28/11/2024 Can you explain the cash flow impact of the October 26 tax, particularly whether you’ll pay duty before receiving revenue?

Great question. The specifics of the legislation are still being finalized, so this could evolve. But yes, we anticipate being responsible for collecting and remitting the excise duty. That creates a timing gap between when we receive cash from customers and when we must pay the duty. I do expect some kind of deferment regime will be introduced. We’re also applying for bonded warehouse status, and some customers might do the same, which could mitigate the immediate cash outlay.

That said, we estimate needing around a £15 million working capital investment to cover this. It sounds large, but we have ample facilities to absorb it. And that assumes steady demand and no change in customer payment terms, which may well adjust. The key point is: our strong balance sheet isn't just for M&A, it gives us flexibility to manage through transitions like this.

05/06/2025 Why do you think Supreme trades at a low free cash flow multiple despite strong performance?

It’s a fair question. Since our IPO, we’ve grown revenue from £122 million to £229 million and free cash flow from £10 million to £33 million. M&A has been a key driver of that. We’ve acquired high-return businesses on attractive terms. Yet, we’re trading at a free cash flow multiple just above six, while similar companies in arguably less attractive sectors get much higher multiples. I believe the market is discounting three things: that wing segment profits will vanish or fall sharply, that we won’t continue our acquisition strategy, and that future targets won’t be as compelling. Those are the main investor concerns I hear.

01/07/2025 Is a 30% gross margin still achievable for Typhoo Tea now that you’re manufacturing in-house?

Suzanne Smith: Absolutely. Once fully scaled and manufacturing all black tea internally, we expect to reach at least 30% gross margin. Previous owners may not have hit that because we're more efficient, leaner, more focused, and structured differently. We wouldn’t have committed to this margin if we weren’t confident in achieving it.

01/07/2025 In which division do cleaning products now sit?

Suzanne Smith: They’re now in Drinks & Wellness. It’s a fair question, we should have clarified earlier. The category is much smaller now, around £45 million run rate, as we've exited low-margin lines. What's left is high-margin janitorial cleaning solutions. It didn’t logically fit elsewhere, so that’s where it sits.

01/07/2025 Is a 30% gross margin still achievable for Typhoo Tea now that you’re manufacturing in-house?

01/07/2025 In which division do cleaning products now sit?

01/07/2025 What proportion of sales comes from Poundland, and are there bad debts linked to them?

Sandy Chadha: There’s no bad debt, Poundland is going through a restructure we expect will succeed. We’re managing exposure carefully. There’s always a tension between supporting a customer and limiting credit risk, but we’re balancing both.
Suzanne Smith: We’re supplying about two-thirds of normal volume while monitoring the situation. We lost credit insurance five and a half months ago, but the profit earned since then has more than offset potential exposure. So we believe we’re making the right commercial decision.

01/07/2025 If Poundland was supplied at full volume, how much revenue would that represent?

Sandy Chadha: Poundland is in our top 10 customers, but we’re not disclosing precise revenue figures. It’s significant, but we don’t feel it’s appropriate to share exact numbers on this call.

02/07/2025 Why is vaping revenue lower in FY27? And if refillable pods have twice the liquid, why are they sold at the same price?

FY26 is essentially the first full year of pods, marking the transition from disposables. Most consumers are expected to move to rechargeable devices, and EPOS data supports this. The volume should remain stable, but the revenue per unit will fall because pods, despite having more liquid, are priced lower. So even if unit volumes hold, revenue drops. That said, there are other ways to offset this, such as larger puff devices. We’ll also benefit from “pipe fill” in FY26, retailers stocking up initially creates a spike in Q1 sales. In FY27, that spike vanishes and we're left with normalized monthly sales. So the FY27 forecast reflects that steady state. It’s a cautious view, assuming no organic growth or M&A upside.

02/07/2025 What proportion of sales did Poundland account for, and are there any bad debts?

There are no bad debts because Poundland hasn’t gone bankrupt. They’re undergoing a restructure we believe will succeed, leaving them stronger. We’ve reduced supply to about two-thirds of normal levels to balance the commercial risk with the credit risk, since credit insurance is no longer available. So far, revenue and profit made since losing insurance have more than covered any potential exposure.

02/07/2025 What’s the financial impact of failed drinks experiments?

Very minimal. Water is free, we extract it from 70 meters underground, so failed experiments cost maybe a couple of grand in time and materials. The main issue is more about delays to product launches than financial loss.

02/07/2025 How much revenue would Poundland generate if you were supplying at 100%?

They are one of our top 10 customers. For competitive reasons, we won’t disclose exact revenue figures, but it’s a meaningful account.

02/07/2025 Are you happy with Simpex’s performance since acquisition?

Yes. We bought Simpex for £1 million when it was generating around £6 million in turnover. It’s now at £10 million, so we’re very satisfied with its growth trajectory.

Outlook & Guidance

23/07/2021 Why do broker forecasts show only 10% revenue growth this year, despite operating in fast-growing markets?

When we IPO’d in February, committing to 10% growth year-on-year felt balanced, given we had no clarity on how COVID would evolve or what M&A might come up. For a business our size, 10% growth isn’t automatic, even in fast-growing markets. We still have to outpace competitors and manage our customer base. As of now, we’ve not guided brokers to revise expectations upward, mainly because it’s still early in the year and uncertainty remains, whether consumer patterns stick post-COVID, or if lockdowns return

This is also our first year as a PLC, so we’re cautious with investor expectations.

We've recently closed two acquisitions, the Cymex deal was only two weeks ago, and we're still integrating. As a board, we've decided to wait until the half-year to provide more confident guidance. Personally, I’m confident we’ll upgrade, not downgrade. But we need more trading data. We're also navigating headwinds, freight, inflation, ingredient price hikes in sports nutrition. So yes, 10% is in sight, but whether it becomes our baseline depends on many variables. We're in growth categories like vaping and sports nutrition, but also in batteries, lighting, and consumer goods. So the outcome will reflect that mix.

23/07/2021 What is your aspiration for market cap in five years?

That’s hard to predict. Before February, I had 100% ownership, going public meant giving up some equity. But I believe the business will grow faster as a public company because of improved access to capital, talent, and resources. We’re a manufacturer, brand owner, licensee, and distributor, in that order. If you compare us to peers with similar profiles, you can form your own valuation perspective.

23/07/2021 How is your gross margin expected to evolve?

With the addition of our household consumer goods category, lower margin overall, we had a step change this year. But long term, as we scale our in-house manufacturing, we expect gross margin to improve steadily. Product mix will naturally shift toward higher-margin areas, lifting overall margins.

09/12/2021 What’s the NHS timeline for prescribing vape products, and what role will Supreme play?

We're looking at a two to two-and-a-half-year timeline for vape products to become NHS-prescribed medicines. The next year will focus on R&D, submitting product concepts to the MHRA, followed by testing, consultancy, and review. The full process is complex and costly, likely requiring around £500,000 per SKU, so this will filter out unserious players. We may invest £1–1.5 million overall, and we’re already working with consultants to prepare.

Big Tobacco will likely participate, though there's some irony given their past. Big Pharma might also enter. The end goal is to offer high-strength therapeutic vapes that help heavy smokers quit. Over time, as users reduce nicotine levels, we hope they switch to our retail-range products like 88Vape. With an NHS subscription cost around £9, we need to ensure outstanding product value and work closely with prescribers.

09/12/2021 What’s the incremental advertising spend this year versus last?

This year we’re spending £1.3 million on advertising, up from about £200,000 last year. The bulk of that increase is supporting the Sea Lions launch, including a major TV campaign, and another portion supports the Millions and Millions vitamin line. Even with this increased spend, our first-year results remain strong.

25/04/2022 Can the company deliver £22 million in FY23 or are further downgrades likely?

We’re very comfortable with that number. It’s a conservative but confident estimate based on full transparency. We’ve always shared revenue and margin by category and will continue to do so. This isn’t the start of a series of downgrades. If anything, M&A activity may add upside. Yes, there’s uncertainty, commodities, inflation, consumer behavior, but that affects the whole market. Within what we control, this is a balanced and fair forecast. When we made the forecast 18 months ago, we couldn’t predict today’s inflation pressures, but our top line and gross profit are broadly in line with analyst expectations. The bottom line is where adjustments are needed.

25/04/2022 Are you considering international expansion, either organically or through M&A?

We’re cautious about acquisitions abroad. Cultural and operational differences often make those integrations difficult, and we've seen companies fail after such moves. That said, we are exploring international potential in our lighting category, where we have strong brands and see good opportunities. With trade shows resuming in September, we’ll be pushing this forward. But in vaping, regulatory variability across countries makes expansion riskier.

25/04/2022 Do you still aim for a £1 billion valuation? Any inspirations driving that goal?

Yes, absolutely. Ten years ago, I never imagined doing this presentation, and now here we are. If you build a business methodically, with a clear direction and patient execution, it will come. This year has been tough, headwinds everywhere, but we’re still growing and generating more profit and cash than last year. That’s a strong result.

25/04/2022 Will whey prices eventually normalize, and what’s your plan in the meantime?

Yes, whey prices will come down, this isn’t a permanent structural change. When they do, some brands may not survive, and consumer habits may shift. Supreme is positioned well with four strong categories and deep retailer relationships. In the meantime, we’ll work with retailers to adapt, whether through reformulated products, new pack sizes, or pricing adjustments. This is a temporary pause, not a fundamental reset. We're staying in the category.

07/07/2022 Was there really a surge in lighting sales, as you said?

I’d agree with the critique, it didn’t show as a surge on the charts. That’s what made it harder to anticipate. With batteries during COVID, we saw a sharp spike and prepared for normalization. With lighting, the growth was gradual over three years, which disguised the COVID-related uplift. In hindsight, we probably sold more during that period than in normal years, inflating the baseline. That’s why the recent downturn feels so pronounced. It’s speculative, but we believe some of the gains were COVID/D.I.Y. driven, even if the visual trend didn’t make that obvious. Our main buyer for lighting even bought shares between the announcement and now, which shows how unexpected this downturn was internally.

07/07/2022 What assumptions are you using for bulb life and how that affects future sales?

Halogen bulbs typically last 2,000 to 3,000 hours, while LEDs last 7,000 to 10,000 hours, roughly three times longer. But LEDs also cost two to three times more. So even though consumers replace them less often, the higher price partially offsets the volume decline. In theory, the market should shrink by 20–30%, but not at the levels we’ve seen recently. This is still a multi-billion-pound market across Europe and globally, and while we expect decline, it won’t be as steep or as sustained as what we've just experienced.

07/07/2022 Do you think the lighting dip is temporary, and will things recover?

Yes, I believe we’ll be back to where we were within the next two years and then progressing further. It’s a short-term blip, unfortunately timed with us being only two years into being a public company.

07/07/2022 Any timeline or thoughts on the NHS prescription initiative?

It’s estimated to be around two years away. We're exploring it, but we’re not yet convinced it's the right fit. That said, we believe in evaluating every opportunity thoroughly before making a decision. Right now, it’s early-stage.

07/07/2022 Do you believe the lighting demand drop will lead to price pressure, and do you have the margin to absorb it?

Prices from factories are already falling, and we pass those savings on transparently. A 20% decline in category demand doesn’t automatically translate to margin pressure. The only potential risk would be consumers trading down due to affordability, but we already offer one of the more competitively priced options. If anything, we might benefit from downtrading. We’re not seeing signs of price pressure beyond that, and customers either buy at our current price or delay purchasing altogether.

07/07/2022 Given LEDs are more expensive and longer lasting, is a £20M sales recovery forecast realistic?

Yes, LEDs are longer lasting and cost more, but our customers (retailers) are growing. Even if the macro market slows, we expect to outperform it. Our growth won’t necessarily track market averages. We’re distributors to growing retailers, which supports a recovery to the £20M range over time.

07/07/2022 What’s your FY23 forecast for lighting revenue?

Analysts have guided the market to around £14M in lighting revenue for FY23. That’s roughly back to our 2016 levels. Despite the drop, we haven’t lost any customers or listings, which supports our confidence in a rebound over the next one to two years.

07/07/2023 What gross and operating margin ranges do you expect over the next two years?

Rather than break it down by category, the blended gross margin has moved from 29% to 26% this year due to inflation in wellness and sales mix, particularly in vaping. If vaping growth continues at its current pace and we sell more third-party (non-manufactured) items, I’d expect margins to stabilize in the high 20s. But one part of the business accelerating or slowing could shift that. More important than margin percentage is gross margin in absolute terms. As that grows and our overhead base stays relatively fixed, the additional gross margin flows down to EBITDA. On operating margin, we're at around 12% EBITDA margin this year, which is a bit low. That’s mainly due to about £4 million of incremental overheads from acquisitions, £3 million of which were in the first year. If we get closer to 14–15%, we’ll feel we’ve done a good job.

29/11/2023 Can you quantify what a ban on disposable vaping would mean for your revenue and profits?

The bigger issue is that a ban wouldn’t necessarily eliminate the entire revenue stream. We expect a significant portion of disposable users to migrate to alternative forms of vaping. So the actual net loss to Supreme would be much smaller than simply removing that revenue line.

29/11/2023 When did the Elf Bar distribution opportunity start operating, given it was announced on July 5?

Operationally, it began in May or June. The £26.4 million in less than three months includes a pipe-fill period, where retailers stocked up initially, sometimes two or three months’ worth of product. That’s not indicative of the steady run rate. We’re now seeing a normalised ordering pattern, which we expect to continue through year-end.

29/11/2023 Can you quantify what a ban on disposable vaping would mean for your revenue and profits?

So I think you’ll have seen in the RNS that we reported £34 million in revenue from disposables in the first half. That’s largely the Elf opportunity, but we also have our own brands in disposables. We estimate they generated around £3–4 million in gross profit. We don’t measure EBIT at a product or even category level, so we can’t say more precisely. If we assume 20% of that gross profit is absorbed by overheads, we’re still guessing.
The bigger issue is that a ban wouldn’t necessarily eliminate the entire revenue stream. We expect a significant portion of disposable users to migrate to alternative forms of vaping. So the actual net loss to Supreme would be much smaller than simply removing that revenue line.

29/11/2023 When did the Elf Bar distribution opportunity start operating, given it was announced on July 5?

03/07/2024 If vaping is unaffected, why is FY25 group IAR forecast flat?

Caution, pure and simple. Last year, we didn’t forecast £38.1 million upfront, we got there through a series of modest, prudent upgrades. That’s how we’ve always run this business.

While we believe integration will be seamless, especially given Sandy’s confidence, we’re not in a position to assume zero disruption from a regulatory change like the disposable ban at year-end. If the execution plays out as expected, we’ll upgrade as we go. But we won’t commit prematurely.

03/07/2024 What level of operating leverage do you expect from your M&A and vertical integration strategy?

There’s no hard ceiling. Our shared platform is designed for scalability. We have spare capacity in ARC, Clearly, vaping, and wellness manufacturing. As we layer on new revenue, we continue to invest in the platform, especially in people, but overhead won’t grow proportionally. There’s no step-change requirement to support the next phase, we gain operating leverage as volume increases.

26/11/2024 What are your forecasts for the Spanish market, and why are you well positioned to grow there?

We're entering Spain through a new 51/49 joint venture, majority-owned and funded by us, but operated by a partner we've known and trusted for 15 years. He's running the business and brings extensive local experience. As for forecasts, I’m not disclosing revenue targets now, not out of reluctance, but because we're still finalizing joint expectations. However, if we can reach 15% to 20% of what we do in the UK, I'd consider that a success.

26/11/2024 What impact do you expect from the disposable vape ban on consumer demand?

We hope consumers will switch from disposables to branded pods. What’s uncertain is whether consumers will vape less, since pods offer more volume for the same price, or simply maintain or increase usage. We’ve already reflected our best estimates into next year’s figures. We consciously reduced our 88 Vape disposable stock, both in our warehouse and across customer stores and DCs, to avoid any liabilities when the ban hits. The goal was to be ready to launch the new product lines in 6 to 8 weeks, rather than get caught holding excess inventory.

26/11/2024 What is Avant’s annual revenue and gross profit from prison contracts, and when do they expire?

Due to NDAs, I can’t disclose specific revenue or profit figures. We’ve just completed a renewal process and are continuing operations as usual, moving to the next phase with those clients.

26/11/2024 Will international expansion of your own brands follow ELF's lead, and are you considering verticals outside the UK?

Yes. In drinks, for instance, we're looking at licensing deals with global rights, brands you’d recognize. I wish I could say more, but nothing is signed yet. We're also hiring an international manager to oversee non-EU markets across all our verticals: vaping, lighting, drinks, and any new categories we add in the next year.

26/11/2024 Where do you see the company in five years?

Hopefully in a similar position but scaled up. Five years ago, we had £75 million in revenue and £7–8 million in profit. Today, we’re at £240 million in turnover, £40 million in EBITDA, and around £30–35 million pre-tax profit. If we maintain that growth trajectory, we could double again, but of course, it gets harder as you scale. Still, with scale come new opportunities.

26/11/2024 Are you on track to meet the £50 million EBITDA goal set at IPO?

Yes, we’re well on track. At IPO I also said we should be worth £1 billion in time. I can’t control the market cap, but we’re hitting the profit targets. That part is in our hands.

20/11/2024 Will Supreme continue focusing on vaping despite regulatory pressures?

Yes. Diversification is the right word, we’re expanding into other products, but we’re not exiting vaping. It's still a core focus. The customer base is incredibly sticky, and if good assets become available at low valuations, we’d be interested. We’ve done no advertising or marketing, yet customer retention is strong. We’re just widening the portfolio, not shifting away.

20/11/2024 What is your view on the newly announced vape tax?

The vape tax adds £2.64 per bottle, which takes our current £1.20 retail price to around £4. That’s still well below cigarette prices. Alternatives like going back to smoking or quitting cold turkey are difficult for most people. Patches or gums exist, but they’re often less effective. I believe 90% of customers will stick with vaping. Historically, in the tobacco industry, higher taxes led consumers to trade down, not exit, and we’re the lowest-cost option. So in that context, we’re well positioned.

20/11/2024 How should public companies manage expectations and communication?

You want to guide conservatively and beat expectations. That’s what we try to do. Games Workshop is a great example, concise RNS statements, no fluff, and consistent performance above broker forecasts. It builds trust and a strong upgrade cycle. Under-promise, over-deliver, that’s the right model in public markets.

28/11/2024 What are your forecasts for the Spanish market, and what gives you confidence to expand there?

We’ve entered Spain through a joint venture, 51% us, 49% a local partner we’ve known and trusted for 15 years. He’s running the operation day-to-day. We’re funding it and leveraging his local expertise. While I’m not disclosing revenue targets, it’s not because I’m withholding, just that we haven’t formalized them together yet. But if we could reach even 15–20% of our UK scale in Spain, I’d consider that a strong result.

28/11/2024 What demand impact do you expect from the disposable vape ban?

It’s hard to predict exactly. While we hope volume shifts to our pod-based offerings like 88 VAPE, we don’t know if users will consume less because they’re buying multi-pod packs or simply maintain their usage. We’ve built a conservative estimate into next year’s forecasts. For 88 VAPE disposables, we intentionally wound down the range to avoid overstock at retailers and in our own warehouse ahead of the ban. We’re preparing to launch new compliant products within 6–8 weeks.

28/11/2024 Besides Spain, are you considering entering other international markets?

Yes, but like Spain, it's all work in progress. We’re evaluating other opportunities but can’t disclose details at this stage.

28/11/2024 Can you move excess disposable vape inventory to countries where it's still legal?

Yes, we can, but we’d have to change the packaging and warning labels, which introduces cost. That said, our 88 VAPE exposure is now minimal, what remains is largely in branded distribution, which we’re actively managing with brand owners and retailers. So we're hopeful that there won’t be any material write-downs at year-end. But it’s still a work in progress.

28/11/2024 Will expansion into international vape markets rely solely on Elf, or could your own brand follow

We are exploring global opportunities, including licenses with world-class brands, some of which would really impress you. Unfortunately, I can’t say more until those agreements are signed. But we’re pursuing opportunities beyond the UK, especially into Europe and globally. We’ve hired an international manager specifically to drive non-European sales across vaping, lighting, drinks, and future verticals.

28/11/2024 Where do you see the company in five years?

Hopefully in the same place, just bigger. Five years ago, we turned over £75 million and made £7–8 million in profit. Today, it’s £240 million in turnover and around £40 million EBITDA, with pre-tax profit in the low 30s. If we can replicate that trajectory, we’d be very happy. Of course, as you scale, percentage growth gets harder, but scale also brings new opportunities. When we IPO’d, I said I wanted £50 million EBITDA within five years. We’re on track. I also said I hoped we'd be worth £1 billion, but that part’s not under my control. Still, the ambition remains.

05/06/2025 How are you thinking about vaping regulation and the upcoming tax in 18–24 months?

The tax won’t hit for 18 months, realistically, 24 months with implementation windows. That gives us time. We can generate £80 million in cash by then. If I can reinvest that into acquisitions with 3-year paybacks, I could replace £20–30 million of EBITDA, close to what vaping currently contributes. In fact, when tobacco taxes went up in the past, cigarette companies made more money. I don’t see why vapes would be different. I could be wrong, but that’s how I see it.

05/06/2025 Can you give an update on your nicotine pouch brand and strategy shift?

So far, nicotine pouches haven’t taken off in the UK as we hoped. We built a factory with capacity for around 10–15 million units annually, but we’re now focusing on overseas markets, Scandinavia and parts of Europe, where demand is much stronger. We’re leaning into trade shows and contract manufacturing in those regions. It’s a classic case of going where the fish are, we’ve shifted our focus to more promising markets, and that pivot is underway this year.

01/07/2025 Why are vaping sales forecast to decline, and why sell refillable pods at the same price despite higher liquid volume?

Suzanne Smith: FY26 includes nearly a full year of PODs. We expect consumers to shift from disposables to rechargeables, something early sales already support. Volume should hold steady, but revenue may dip. That's because rechargeables involve a one-off kit purchase, followed by cheaper refill pods. Even with more liquid per unit, the price per ml is lower, so revenue drops despite constant usage.

Suzanne Smith: However, FY26 also includes a one-time spike from “pipe fill,” where retailers load up initial stock. That already occurred and drove a strong Q1. By FY27, we’ll lose that initial surge and see stabilized monthly sales. Our current FY27 view is cautious, it doesn’t account for potential new brands, acquisitions, or organic growth. We're being prudent, not pessimistic.

01/07/2025 Can you update us on your Spanish operations?

Suzanne Smith: It’s performing as expected, generating €800,000 to €1 million in monthly turnover, distributing Lost Mary disposables. There's currently no ban in Spain.

Sandy Chadha: The notable point is that we bought the business just after a vape tax was implemented, about three months before. But despite the tax, volumes haven't dropped. That’s a positive indicator, and it gives us confidence that the market can absorb taxation without eroding sales.

01/07/2025 Why are vaping sales forecast to decline, and why sell refillable pods at the same price despite higher liquid volume?

01/07/2025 Can you update us on your Spanish operations?

Suzanne Smith: It’s performing as expected, generating €800,000 to €1 million in monthly turnover, distributing Lost Mary disposables. There's currently no ban in Spain.

01/07/2025 Why hasn’t formal guidance been updated in two years?

Suzanne Smith: We’ve now revisited the guidance as part of our analyst work this cycle. Turns out, the analyst forecasts were broadly in line with where we’d have guided anyway. So it’s not that we ignored it, we did the work, and the numbers aligned. That said, we’re still being cautious, and we ask for a bit more patience.

02/07/2025 Why hasn’t company guidance been updated in two years?

We did revisit guidance this time around. While we were focused on delivering FY25, we delayed issuing new figures. But we recently worked closely with analysts and, whether by design or chance, their forecasts align well with where we would have guided. So it's not that we ignored the update, it’s that the forecasts already reflect our internal expectations. That said, our cautious stance remains.

Risks & Macro

23/07/2021 What risks are you currently seeing in the business?

There are several. Ingredient prices have gone up, though we’ve hedged well through the end of the year and are buying at reasonable levels for January too. We hope costs stabilize in Q1 next year. Around 60% of our profit comes from UK-made products, which limits our exposure to freight and shipping issues, unlike businesses reliant on China.

In terms of strategic risks, we’re managing the balance between M&A, wellness category expansion, and vaping. We’ll grow those areas deliberately, not by chasing every opportunity. Each new category needs investment in people and know-how, so we stay disciplined and focused on execution.

09/12/2021 How much effort are you putting into recyclable and sustainable packaging?

Sustainability is a major focus. For Sea Lions, packaging is now compostable. For vaping, we plan to move our 10ml plastic bottles to recycled materials in the next 3–4 months, either 30% or 100% recycled, depending on availability. In lighting, we’ve already eliminated all plastic and shifted to multi-unit boxes.

Internally, we’ve formed an ESG committee with staff from across the business, not by design, but because so many people care deeply about sustainability. It’s now a top agenda item. For batteries, packaging changes are trickier due to display requirements, but we’re working with suppliers in China to improve this.

We’ve also looked at logistics efficiency, for example, backhauling with major customers whose trucks return from stores empty. If they can pick up stock from us on those return trips, it cuts emissions without adding cost. So yes, we’re actively embedding sustainability across the business.

25/04/2022 How easy will it be to pass on cost inflation, especially in whey and wellness? Will discount retailers accept price increases?

There are two kinds of inflation, general costs like electricity and freight, and then raw materials. Wellness, being food-based, is the hardest hit. For example, whey used to cost €4–4.50/kg in 2018 and now it's £10–12/kg. That’s a steep increase, especially over the last six months. In other categories like vaping and batteries, it's been around 3–5%, and we can pass that on more easily due to strong customer relationships. But for wellness, if a product goes from £12 to £22 retail, even if retailers don’t delist it, sales will likely drop. We’ve already flagged that powders may decline this year. We’re reducing margins, passing costs where possible, but it’s tough. The good news is when inflation eases, margins recover faster than prices fall. I’ve never seen this level of inflation in any category before.

25/04/2022 Do you expect to benefit from customer trading down in the current macro environment?

Roughly 70–80% of our business performs well in recessions. Products like vaping and batteries, which sell for £1 or less, are essentials or habitual purchases. These tend to be recession-proof. Vitamins are more of a luxury, but given our lower price points, we’re still competitive. The only vulnerable area might be powders, where consumers are spending £10–15 per product.

25/04/2022 What FX rate have you hedged at for USD purchases in FY23, tailwind or headwind?

We’re well hedged for a good part of the year, though the duration depends on sales volume and purchasing levels from the Far East. We’re excited about new opportunities in vaping that could increase purchasing. Our average hedge rate is slightly above the spot rate, so we're in a stable position. Overall, we expect the impact to be neutral.

25/04/2022 Is this a good time to offer low-priced vitamins given recessionary pressures?

Yes, it might be. In a cost-of-living crisis, consumers may not abandon vitamins entirely, they may just switch to cheaper brands. If we’re offering a full year’s supply for £5, that could keep them in the category. It’s a real test of whether vitamins are seen as essential. We're also in discussions for sponsorships and licensing deals with well-known international brands, which should increase credibility for Sea Lions.

25/04/2022 Are you exposed to McColl’s?

We supply Morrisons, not McColl’s directly. While Morrisons is exposed to McColl’s, Supreme isn’t. Also, Morrisons is already outperforming McColl’s in sales.

25/04/2022 Why are your vitamins priced so cheaply, does it hurt perceived quality?

They’re cheap because we manufacture and pack them ourselves, and buy in bulk. Vitamins themselves aren’t expensive to make; it’s the branding and packaging that inflate prices. We removed that “brand tax” and kept things simple. Around 40% of Sea Lions customers are repeat buyers, which shows satisfaction. For many, vitamins are like an insurance policy, something they try once they’re affordable. We’ve likely attracted first-time buyers with our price point.

25/04/2022 Why are your vitamin prices so low, do you address quality concerns in your marketing?

We’re vertically integrated and sell directly to consumers, cutting out multiple layers of the supply chain. That eliminates costs, allowing us to charge less. We also try to communicate this clearly on our website so consumers understand the value doesn’t come at the expense of quality. Advertising helps reinforce that credibility as well.

07/07/2022 Is there customer concentration risk in lighting?

Yes, there is some concentration, our top three customers represent about 35% of lighting sales. However, these relationships are longstanding and stable. These customers use permanent in-store fixtures with our branded products like Energizer, often placed alongside private labels. Our brands consistently outsell private labels at higher prices. So while there is concentration, the risk is relatively low. The real volatility comes from the nature of FOB (free on board) orders, large, infrequent shipments direct from China. If one order is delayed or missed, the impact on profitability is immediate and visible. With vaping, a single week's missed order is immaterial, but with FOB lighting, it hits EBITDA and even cash flow because of the lean overhead. It’s efficient business when running well, but sharp when interrupted.

07/07/2022 Will inflationary pressure spread to other categories beyond lighting?

We’ve seen about 10–15% inflation in batteries, which we’ve successfully passed on. In lighting, prices are actually falling, down 5–7% in the past couple of months, because demand across Europe has dropped. We're overstocked in lighting, but it's manageable, only a couple of million pounds. In vaping, inflation has been minor, mostly from electricity, plastic, and cardboard. However, the wellness category, especially anything food-related like dairy, has seen the most severe inflation across all segments.

07/07/2022 Are you seeing overstocking risk in batteries or vaping like in lighting?

No, that risk is unlikely. In vaping, we receive EPOS (electronic point-of-sale) data from all top 10 customers, and it’s tracking well. For batteries, only two or three customers provide EPOS data, but most stock is held in the UK and sold week to week, nobody holds more than 2–3 weeks’ worth of inventory. In vaping, customers also buy on a weekly or monthly basis, so overstocking is limited. The overstocking issue in lighting stems from FOB orders direct from China, full containers shipped to customer DCs, so we lack full visibility. Wellness is the opposite; if anything, we’re understocked there.

07/07/2022 Will the environmental concerns around disposable vapes lead to regulation?

It’s a valid concern, and it bothers us too. We agree that the future lies in open systems or pods, not disposables. We’ve lobbied the UK government via the vaping association, pushing for this to be on the agenda. But the government hasn’t shown interest, it’s not on their radar yet. Until it becomes a bigger economic or public concern, regulatory support will lag. We’re doing what we can, but without government momentum, it’s a slow process.

07/07/2022 Could the UK face vape regulation like the FDA ban on JUUL in the US?

We don’t believe so. The UK has taken a far more pragmatic approach, focused on harm reduction and smoking cessation. A brand-level ban like in the US doesn’t make sense here. If anything, future regulation might target flavors, but we don’t see that happening in the next five years. Even if it did, fruit flavors are a minority of our volume. Our top sellers are menthol and tobacco. If fruit flavors were removed, it would simplify production and logistics significantly. Still, reducing flavor choice undermines smoking cessation goals, so it’s a counterproductive policy.

07/07/2022 Any concerns about the proposed EU ban on flavored vaping?

Some EU countries have proposed bans, but others, like Switzerland, are already reversing them. Adults quitting smoking should have access to flavors they find palatable. Tobacco isn’t an appealing taste. The key concern should be limiting appeal to children, not removing options for adults. Our 88 Vape brand targets middle-aged consumers; it’s not youth-oriented. Legislation should focus on packaging, marketing, and education, not restricting effective tools for smoking cessation.

07/07/2022 Will you or Sandy be buying shares to show confidence?

We’re unable to comment or act at the moment due to being in or close to closed periods driven by M&A activity. These regulatory restrictions make it difficult to execute share purchases, even if we want to. But it’s not for lack of conviction, we just need board clearance and an open window to proceed.

06/12/2022 Would your company be impacted if a ban on disposable vapes or their packaging were introduced?

Currently, more adults are switching from tobacco to vaping than ever, and disposables make that transition easier, they’re grab-and-go with no learning curve. If disposables were banned due to youth appeal or environmental concerns, there would be some short-term impact. However, we expect consumers to migrate to open or refillable systems, which carry higher margins. On battery waste, we’ve been part of battery compliance schemes for years, and we believe proper recycling should address that issue. As for packaging, yes, some designs may appeal to younger audiences, but the intent is to offer a simple alternative to smoking. We're also investing heavily in R&D to launch reusable products that maintain that ease-of-use without the environmental downside.

06/12/2022 How could the proposed tax hikes on tobacco and vaping products in Europe affect your business?

At the moment, it’s just headlines, there’s no legislative change imminent. Some countries like Germany already have heavy vaping taxes, and Italy has been taxing vaping for a while. Future levies could shift product preferences, such as people buying smaller unit sizes in Germany due to per-milliliter taxes. It's hard to assess the exact impact without seeing specific legislation. The UK is a separate case; there's strong government support for vaping and a 2030 smoke-free goal. Any harsh new tax would contradict that policy, so we don’t expect drastic changes in the UK soon.

06/12/2022 Are you concerned about supply chain risk or trade war exposure related to China?

Not at all. Around 65–70% of our profits come from products made in the UK, with very limited sourcing outside Europe. Lighting used to be a major area of Far East sourcing, but we’ve scaled that back significantly, so our exposure to China is minimal.

06/12/2022 Where do you see input cost or inflation risks across divisions?

Compared to our last call, I have very few concerns for the next five to six months. Inflationary pressures have eased significantly, and we’re in a better position now across input categories.

06/12/2022 Any updates on ESG initiatives or should we refer to the annual report?

I’d recommend referring to the ESG section of our annual report from this summer, it includes a comprehensive summary of everything we undertook last year. There haven’t been significant new developments since then.

07/07/2023 Would you consider leading industry efforts on age verification in Westminster?

Yes, we’ve seen reputational concerns emerge, and we’re open to taking a leadership role in advocating for better standards, like mandatory age verification. It’s something we’re actively discussing internally.

06/12/2022 Are you concerned about supply chain risk or trade war e

osure related to China?
Not at all. Around 65–70% of our profits come from products made in the UK, with very limited sourcing outside Europe. Lighting used to be a major area of Far East sourcing, but we’ve scaled that back significantly, so our exposure to China is minimal.

06/12/2022 Where do you see input cost or inflation risks across divisions?

Compared to our last call, I have very few concerns for the next five to six months. Inflationary pressures have eased significantly, and we’re in a better position now across input categories.

06/12/2022 Any updates on ESG initiatives or should we refer to the annual report?

29/11/2023 Who pays for the recycling of disposable vapes and does Supreme have a contract in place?

We already handle battery recycling due to battery distribution regulations. So when vape recycling came up, we applied the same framework. The only reason to collect vapes is the battery inside. Yes, we have bins in thousands of stores, and Supreme pays for it. We currently spend about £1.2 million annually on battery collection, and vape recycling will be consolidated into that process. We don’t expect costs to increase significantly.

03/07/2024 How can branded vaping distribution remain unaffected by the disposable ban?

One of the products, Lost Mary, is a disposable; the other, Elf Bar, includes a replacement pod system. The new version of Elf Bar is not going to be banned.

I don’t believe the consumer will mind if the disposable disappears and is replaced by the pod system. I might be wrong, but I don’t see a significant shift in buying behaviour resulting from that change.

26/11/2024 Will new vape legislation limit the number of allowable flavors?

We expect some simplification in flavors. For example, rather than having "blueberry ice" or "blueberry lemonade," it may just be "blueberry." We anticipate that fruit, menthol, tobacco, and mint flavors will still be allowed, which already represent the majority of our business.

26/11/2024 Could excess disposable vape stock be sold in markets where disposables remain legal

Yes, it's possible but not straightforward. You’d need to adjust packaging and warning labels, which adds cost. That said, our exposure on 88 Vape disposables is now minimal. We’re mainly managing branded distribution stock with both brand owners and retailers, aiming to avoid significant year-end write-downs.

26/11/2024 Any update on potential changes to how vape products are displayed in stores?

There’s currently no regulatory clarity on that. No changes have been communicated regarding behind-the-counter placement, but we’ll share any updates when available.

20/11/2024 How did the 2007 financial crisis affect Supreme?

2007 was a disaster. In 2003, we had sold the business to private equity, which loaded it with debt. I was only 30 and didn’t understand the risks of leverage. Over four years, debt piled up while half our product categories became obsolete and our biggest customer faded. In August 2007, the business went into administration. It was a dreadful time, we couldn’t pay suppliers and I only held 30% equity, so I lacked the resources to rescue it myself. My father and I bought the business back out of administration. We spent two years working nonstop to repay every creditor and restore our reputation. The original loss of control came in 2003 when my father wanted to retire and take capital out. I'd advise anyone considering debt during high interest rate periods to think twice.

28/11/2024 Will the number of vape flavours be restricted under the new bill?

Yes, we expect some simplification. For instance, "blueberry ice" might just become "blueberry." We think fruit, mint, menthol, and tobacco flavours will still be allowed. That aligns well with our existing range, particularly in the ATFA product line.

28/11/2024 Any updates on potential requirements to display vape products behind the counter

No clarity yet. There’s been no indication of changes to product display rules under the Vapes Bill. If that changes, we’ll of course adapt and share any updates.

05/06/2025 Which investor concerns do you think are valid, and which do you disagree with?

Let me break it down. On acquisitions, we’re busier than ever. I’ve never had this many IMs and deal memos on my desk. As Supreme becomes better known, sellers approach us directly, they may accept lower multiples, but they view us as a credible exit. I expect deal flow to accelerate as we grow and can execute larger deals. It's compounding in our favor.

Regarding valuation, yes, we’re trading at a low multiple. But that’s entirely due to vaping and regulatory uncertainty. The unknowns scare the market more than bad news. Disposable vapes are now banned, but volumes have not dropped. That’s crucial. Last week, there was panic, our share price dropped below £1, but operationally, everything continued as normal.

05/06/2025 So you don't expect a meaningful drop in volume following the disposable vape ban?

Correct. We converted our main retail partners 3–4 weeks before the ban, so we had about six weeks to transition. There’s been no drop in EPOS, and business continues as usual. Retailers prepared well and stocked accordingly. There’s visibility, and our business has proven resilient through the change.

01/07/2025 How do you manage risk from failed drinks product experiments, and what’s the cost if they go wrong?

Sandy Chadha: The financial risk is low. Water is sourced from 70 meters underground at no cost. If an experiment fails, we’re talking about a few thousand pounds. The bigger frustration is a delayed launch, not the loss itself.

02/07/2025 Can you update us on Spanish operations?

It’s performing as expected, turnover is around €800K to €1M a month. They're distributing Elf and Lost Mary disposables. There’s no ban in Spain, and it’s a low-cost operation from our end. Notably, while we bought the business just before a new tax was implemented, volumes have remained stable even three months into the tax regime. That gives us confidence that future regulatory changes might not disrupt volumes significantly.

Personal Questions

23/07/2021 What’s Supreme’s company culture?

Transparency. We're open with our staff, suppliers, and customers. We make a point of sharing what we can and responding quickly to investor queries. If anything wasn’t covered, reach out to our investor email and we’ll get back to you.

07/07/2023 Are you committed to staying a public company long term?

Absolutely, 100%. Just look at our numbers. I’m disappointed the share price hasn’t risen in line with profits, but what happened previously with private equity was an isolated situation.

I'm fully committed to building this business in the public markets. As long as we keep putting out strong statements like the last one, I don’t anticipate any issues remaining public.

29/11/2023 Given limited available float, what value do you get from maintaining a public listing?

The main reason we went public was to raise equity for business growth. But UK market valuations are poor right now, it doesn’t make sense to sell shares to raise funds. That said, being a public company has advantages. We’ve attracted great employees and given them share options, which we believe will deliver value over the next two years. Also, when we pitched the Elf tender, being a PLC added credibility. We use that in tenders with other customers as well. So while the benefits haven’t been as strong as we expected two and a half years ago, we're committed to remaining listed.

29/11/2023 Are you committed to staying listed on public markets?

Yes, we’re fully committed. I even bought some shares back recently, not a substantial amount, but I believed there was value. I said last call we were staying public, and that hasn't changed.

29/11/2023 Why hold the AGM at 8:00 a.m. and do you consider adjusting this?

We schedule it early because our board meeting starts at 9:00 a.m., so we prefer to handle it beforehand. If there’s concern, we can consider changing it. In any case, investors can always email us with questions, and we’ll respond quickly, subject to what we’re allowed to share.

29/11/2023 How do you protect employees from discrimination and ensure ethical practices?

Most of our senior staff started in junior roles. Our employee retention is among the best in the industry, many have been with us 10, 20, 30 years. We believe in treating everyone equally, regardless of role. While we don’t share HR specifics publicly, our August annual report includes detailed information on employee policies. Last year, we launched the “employee journey” initiative, reviewing onboarding, training, and incentives. We also have transparent pay grades and open communication channels

03/07/2024 Do directors and executives hold significant Supreme share ownership?

Yes. When we floated, we launched an EMI scheme. Around 100 employees received share allocations, and senior management received significantly more. In many cases, those shares are worth well beyond a year’s salary.

26/11/2024 Why did you sell some of your shares recently despite your stated confidence in the business?

As the saying goes, there are many reasons to sell and only one reason to buy. In this case, the sole reason I sold was to get ahead of the budget announcement. I expected it to be tougher on capital gains and share sales. The timing was just before the budget, and that was the only motivation. I still own 56.1% of the business, which is essentially the same as at IPO, after previously increasing to 58% through purchases and buybacks.

20/11/2024 How did you personally get started with Supreme?

I joined the business straight out of school in 1990. My educational background was quite difficult, I went to several schools, struggled academically, and even spent a year in India because of the challenges I faced growing up as a young Sikh boy in the UK during the 70s and 80s. When I came back, I attempted college but didn't pass my GCSEs. I joined my father’s shop as the fourth employee in 1989. Back then, we weren’t in our current product categories. My father initially sold fancy goods like radios and clocks near the seaside, and later opened a shop. That’s how Supreme, then known as Supreme Imports, got its start, with just a few hundred thousand in turnover.

20/11/2024 Do you think difficult early experiences helped shape your resilience as a founder?

Absolutely. Going through adversity gives you resilience. Things that may be difficult for others don’t affect you in the same way because you've already experienced far worse. You’re more logical in handling setbacks. Also, the determination to prove yourself becomes a huge motivator. That chip on your shoulder does turn into fuel.

20/11/2024 What’s the culture like at Supreme, and how do you keep employees motivated?

We follow what I call an “intrapreneurship” model, entrepreneurs within a business. High salaries are one thing, but what really motivates people is purpose, responsibility, and ownership. When you give someone freedom, respect, and room to make their own decisions, even their own mistakes, they start acting like business owners. They feel the wins and losses personally. That’s what has worked for Supreme. It may not be right for every company, but for us, it’s built a dedicated, resilient team that’s just as invested in success as I am.

20/11/2024 How do you structure incentives and ownership for employees at Supreme?

We offer commission, most sales staff get 4% of gross profit on the sales they generate. We also have an EMI share scheme. During the 2021 IPO, we awarded shares based on length of service, regardless of job role. So warehouse workers and forklift drivers who’d been with us 15 years walked away with shareholdings worth up to £250,000. It was genuinely life-changing for many of them. We believe in giving people real ownership, not just pay.

20/11/2024 What advice would you give to someone starting a business today?

First, you need determination and drive, nothing replaces that. But today is probably the best time in history to start a business. With the internet and AI, you can learn everything about your market, your competitors, and your customers in hours. Use every tool available, especially AI. It will make you faster, smarter, and more efficient. Yes, it’ll eliminate some jobs, but it’ll also create new ones and give entrepreneurs massive leverage. It's an exciting time to build.

28/11/2024 Why did you sell some shares recently, despite your confidence in the business and low market multiples?

It was purely to get ahead of the budget. I expected harsher treatment of capital gains, especially around share sales, and wanted to be prudent. That’s really all there is to it. I still hold 56.1%, which is about where I was at IPO, even after previously increasing my stake to 58% through buybacks. So, the core commitment remains intact.

Other

26/11/2024 What is the cigarette equivalent of a £4 vape pod?

A 10ml bottle of e-liquid is roughly equivalent to 200 cigarettes, that’s about 10 packs, assuming 20 per pack. At £20 per cigarette pack, that would be £200 of traditional smoking versus a £4 bottle of e-liquid. Hopefully that puts it in perspective.

26/11/2024 How many 10ml bottles of e-liquid does the average consumer use per week?

Most consumers use one or two bottles a week. Heavier users might go through two or three. It varies by user.

28/11/2024 For non-smokers, what is the cigarette equivalent of a £4 vape pod?

A 10mL e-liquid bottle is roughly equivalent to 200 cigarettes, about 10 packs, assuming 20 per pack. With a cigarette pack costing around £20, that’s £200 worth versus a £5 vape bottle. So, yes, the value comparison is very compelling

28/11/2024 What are the annual revenue and gross profit from your prison contracts, and when do they renew?

Due to NDAs, I can’t disclose the revenue or margin. What I can confirm is that we’ve just completed a renewal process and are now entering the next phase. It’s business as usual from here.

28/11/2024 Is there any cross-sell opportunity between 88 VAPE and your wellness products?

I like the ambition, but realistically, it’s a difficult fit. The perceived value of vaping doesn’t naturally align with wellness branding. Also, let’s not forget we initially entered vaping to help people stop smoking, not necessarily to merge it with other categories.

28/11/2024 How many 10mL vape bottles does the average consumer use?

The average user probably goes through one or two bottles per week. Heavier users might use two to three. So it varies, but that’s the general range.

Sources

Supreme PLC (SUP.L): A Leading Distributor in Fast Moving Consumer Goods

Supreme - Investor Presentation (FY Results) - July 2025

Supreme plc - Investor Presentation (Interim Results) - November 2024

Supreme PLC - Trading Update investor presentation

Supreme plc - Investor Presentation with Q&A (November 2022) - Interim Results

Supreme plc - Investor Presentation (8 Dec 2021) - Interim Results

Supreme plc - Investor Presentation post FY results (6th July)

Supreme plc - Investor Presentation (FY Results) - July 2023

Supreme plc - Investor Presentation (FY Results) - July 2024

Supreme plc - Investor Presentation (Interim Results) - 28 November 2023

Supreme FY Presentation July 21

How Selling Batteries Turned Into A £200m Business

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The following transcript and Q&A have been generated with the assistance of Artificial Intelligence (AI). While we strive for accuracy, completeness, and clarity, the content may contain errors, inaccuracies, or misinterpretations. Neither the company featured in this document nor ValueBridge assumes any responsibility or liability for the accuracy, reliability, or completeness of the information presented.

This material is for informational purposes only and should not be construed as official company communication, financial advice, or a definitive representation of the company's views. Readers should independently verify any information before making decisions based on it.

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