Supreme (LON:SUP) - link to our new research note here: https://www.equitydevelopment....
For the year to 31 March 2024 Supreme reported revenue of £221.2m, +42%YoY, (adj.) EBITDA of £38.1m, +97%YoY and (rptd). PBT of £30.1m, +109%YoY.
Net cash from operations grew 40%YoY to £27.1m, with year-end net cash1 of £11.6m (FY23: £3.2m). (adj.) diluted EPS was 18.19p/share (ED E, 20.2p). We see strong performance at gross level, +55%YoY with margin improvement from 26.3% to 28.7%.
The Group has made timely preparation for the transition to traditional refillable, rechargeable e-cigarettes, allowing it to further scale its c.60 m bottle annual production volumes, or to newer pod devices. Supported by strong cash generation Supreme has maintained its strategy of acquisition in a new product area – Soft Drinks, where we expect a full year of contribution in FY26.
Supreme trades on a FY25E (adj.) EV/EBITDA 5.5x and PE of 9.1x, offers a dividend yielding 2.6% and remains highly cash-generative, as evident in the recent cash-based acquisition of Clearly Drinks for £15.0m.
Our Fair Value remains at 225p/share, still well above current levels despite recent strength.
