Financials
Financials — What the Numbers Say
Figures converted from GBP at historical FX rates — see data/company.json.fx_rates. Ratios, margins, and multiples are unitless and unchanged.
1. Financials in One Page
Supreme is a $299M-revenue UK consumer-staples distributor that has compounded the top line at roughly 20% per year for five years through a mix of category expansion and bolt-on acquisitions, while still throwing off cash. Operating margin (14.1%) and EBITDA margin (17.8%) sit in the middle of UK FMCG peers, but capital efficiency is exceptional: ROIC is around 30% and FCF converts at 94% of net income, because the model is asset-light branded distribution rather than capital-intensive manufacturing. The balance sheet carries only $16M of net debt (and is net cash on an IFRS-lease-adjusted basis) against $53M of EBITDA, giving Supreme firepower to keep buying complementary brands. Valuation is the loudest signal: the stock trades on roughly 8x earnings, 5x EV/EBITDA, and 9x free cash flow — a meaningful discount to UK consumer-staples peers (12-16x P/E, 8-10x EV/EBITDA), which the market is applying because Vaping (the largest category) is in a UK-regulation-driven transition. The single financial metric that matters most right now is non-disposable vaping revenue plus Drinks & Wellness — the test of whether the post-disposable-ban revenue mix can hold the $52m+ EBITDA line.
Revenue FY25 ($M)
Op Margin (%)
Free Cash Flow ($M)
ROIC (%)
FCF Margin (%)
Net Debt ($M)
P/E (TTM)
EV/EBITDA
Quick definitions. Free cash flow is operating cash flow minus capex — what the business produces that owners can actually use. ROIC is after-tax operating profit divided by equity plus debt — the return the company earns on every dollar of capital invested in it. Net debt / EBITDA compares total debt minus cash to a year of operating cash earnings — under 1x is conservative, over 3x is stretched. EV/EBITDA is enterprise value (market cap + net debt) divided by EBITDA — the multiple a buyer of the whole company would be paying.
Supreme prices at ~8x earnings while peers (Premier Foods, Imperial Brands, Nichols, Applied Nutrition) trade between 12x and 16x. The discount is not about quality of returns — it is about uncertainty over the post-disposable-ban Vaping mix.
2. Revenue, Margins, and Earnings Power
Supreme's revenue has roughly tripled in five years — from $114m in FY20 (the year it listed on AIM) to $299m in FY25 — driven by category expansion (Sports Nutrition entered 2018, Vaping accelerated 2021-23, Drinks & Wellness was reshaped in 2024 with the Clearly Drinks and Typhoo Tea acquisitions). Operating profit doubled in the same window, but the path was uneven: FY23 saw a margin reset as Vaping disposable demand temporarily overwhelmed the cost base, and FY25 is a flat-revenue year as the UK disposable-vape ban (effective June 2025) was anticipated and the customer book pre-loaded.
The margin shape tells two stories. First, gross margin has stepped up from ~28% to ~32% — the 400bp gain in FY25 reflects Clearly Drinks adding in-house manufacturing rather than third-party distribution, plus a leaner mix as low-margin disposable vapes shrank. Second, operating margin has not moved as much because SG&A has grown faster than revenue in FY24-25 (people, head-office relocation to Trafford Park, and integration costs of three acquisitions). Investors should watch whether the gross-margin gain holds through FY26 — if it does, Supreme has a structurally better mix; if it reverts, the FY25 step-up was a one-off.
The H1/H2 view (Supreme reports semi-annually rather than quarterly) shows revenue is now flat-to-down on a like-for-like basis as Vaping rolls off, with H2 stronger than H1 — a seasonality pattern that has held through every reporting period. The earnings shape implies that for FY26 to grow at the guided +15% rate ($361m revenue, $55m adj EBITDA), the H1 print due in November 2026 has to clear ~$162m, ~10% above H1 FY25.
3. Cash Flow and Earnings Quality
Supreme converts profit to cash well. Over the last three years, free cash flow has averaged 96% of net income — a clean read that says the reported earnings are real money, not accruals. In FY25 OCF was $32.5m on $30.4m of net income (107% conversion); FCF was $28.4m, against capex of just $4.1m. That capex-light shape is structural — the company designs, brands, and distributes; it does not run heavy plant — and is what allows ROIC to stay near 30% even as the business scales.
The one wrinkle worth flagging is working capital. Receivables grew from $25.9m to $54.6m over FY23-FY25 (+111%) while revenue grew only 55%. Days-sales-outstanding has stretched from 47 days in FY23 to 61 days in FY25. Some of this is acquisition-related (Clearly Drinks and Typhoo carry their own receivables books), but it is also a reminder that Supreme sells through large UK retailers (Tesco, Sainsbury's, B&M, Home Bargains, Poundland) that have negotiating power on payment terms. Inventory is also building ($47.0m, +52% year-on-year), partly to pre-load customers ahead of the disposable ban. If receivables and inventory both keep growing faster than revenue, FCF/NI will compress below 80%.
4. Balance Sheet and Financial Resilience
Supreme runs a fortress-style balance sheet for its size. At March 2025, total debt was $20.0m (mostly the $52m revolver, only partially drawn) against $4.1m cash for net debt of $15.9m. Critically, on an "Adjusted net cash" basis (excluding IFRS-16 lease liabilities, which are operational rather than financial debt), the company is net cash positive at year-end despite spending $33.2m on acquisitions during FY25. Interest cover is wide (EBIT/interest ~18x) and the $52m facility was renewed in FY25 to fund continued M&A.
The notable balance-sheet feature is how little goodwill/intangibles Supreme carries despite an active M&A programme: only $27.5m, or 12% of total assets. Acquisition prices have generally been near-tangible-value (Typhoo $12.9m out of administration; Clearly Drinks bought late FY24). For comparison, Hilton Food carries goodwill at ~30% of assets and Premier Foods well above 50%. That means the balance sheet has not been inflated by overpaying for past deals — a quiet but important quality signal.
Supreme has $20m of debt against $53m of EBITDA and $33m of operating cash flow. A 1-year revenue shock could be absorbed without covenant strain. The risk is operational (Vaping mix), not financial.
5. Returns, Reinvestment, and Capital Allocation
Returns on capital are the standout financial feature. ROIC has run at 27-43% every year since IPO and ROCE is in the same band. This is a function of the asset-light model — revenue runs through receivables, inventory, and a small PP&E base, with very little goodwill weighing down the denominator.
Note on FY20 ROE. Equity at IPO (Feb 2021) was tiny, so pre-IPO ROE figures (>200%) are not meaningful. ROIC, which has equity + debt in the denominator, gives a much cleaner read.
Capital allocation has been disciplined and acquisition-led. Over the last four years, management has spent $57m on acquisitions (Liberty Flights, Clearly Drinks, Typhoo, plus follow-ons) versus $23m on dividends and effectively zero on net buybacks. This is the right priority order for a sub-$325m revenue company that still has white space to add categories and own-manufacturing capacity. Share count has grown only ~2% per year (mostly from IPO and small placings); there is no equity-funded acquisition programme.
Per-share book value has compounded from $0.05 to $0.82 in five years — a 75% CAGR — even after returning ~$32m of cash via dividends. EPS has roughly doubled, FCF/share has held in the $0.18-$0.24 band despite the reinvestment programme. The dividend grew 10% YoY in FY25 to a 5.2p/share total (about a 32% payout of EPS, 28% of FCF), which leaves enough for the bolt-on M&A engine to keep running.
6. Segment and Unit Economics
Supreme reports a single IFRS segment but discloses revenue across three category groups (Vaping, Drinks & Wellness, Electricals — formerly five before the 2024 reorganisation). Profit by category is not separately disclosed.
Vaping is still the engine but it is changing shape. Disposable vapes were $70.0m in FY25 (down from $89.4m in FY24, a 23% decline) ahead of the UK government's June 2025 disposable ban. Non-disposables (88Vape own-brand plus distribution of branded reusables like Lost Mary and Elf Bar) grew 8% to ~$97m. The investment question is whether reusables can fully substitute for disposable revenue or whether there is a permanent step-down. Management's FY26 guidance ($361m group revenue, +15%) implies they believe the substitution holds and Drinks & Wellness can add another leg.
Drinks & Wellness is the new growth vector. It doubled to $63.2m in FY25 and management has added another tranche post-period (SlimFast acquired October 2025; Carabao Energy distribution agreement April 2026). On run-rate that is probably a $110-135m category for FY26.
Electricals is mature and managed for cash. Both batteries and lighting are in long-term volume decline, but Supreme outperforms the market thanks to scale advantages with B&M, Home Bargains, and Poundland. The category is the steady free-cash-flow contributor that funds M&A in the other two.
7. Valuation and Market Expectations
Valuation is the most interesting and disputable section of the page. At 162.5p (last close 7 May 2026, equivalent to roughly $2.21 at the spot rate), Supreme has a market cap of ~$260m and an enterprise value of ~$276m, giving a current-year multiple set that looks markedly cheaper than UK FMCG peers and cheaper than its own history.
The multiple compressed sharply in FY23 — when the disposable-vape uncertainty first hit — and has stayed compressed since. The current 8.1x P/E is half the 5-year average (~12x) and well below the 16-20x range Supreme traded at right after IPO. The market is paying for FY25 earnings as if they were peak earnings.
Look at the multiple alongside FY26 guidance. Management has guided to revenue of ~$361m (+15%) and adj EBITDA of ~$55m (essentially flat on FY25's $52m, because the higher-revenue/lower-margin acquisition mix dilutes EBITDA margin). That implies the forward P/E is broadly similar to current (~8x) and forward EV/EBITDA is ~5x.
Note that the valuation discount is deserved at the EBITDA level (UK regulatory uncertainty around vaping is real) and excessive at the FCF level (cash conversion has never been an issue, and the balance sheet is fine). The analyst that does the work to get comfortable on Vaping non-disposable substitution gets paid; the one that does not, doesn't.
8. Peer Financial Comparison
The peer gap that matters: Supreme has the third-highest ROIC in the set (after Nichols at 52% and Applied Nutrition at 33.6%) and the third-strongest balance sheet (after Nichols and Applied Nutrition, which both run net cash), yet trades at the second-lowest P/E and EV/EBITDA. The only peer that trades cheaper is Hilton Food, and Hilton has structurally inferior economics (2% operating margin, negative FCF, and material leverage). Premier Foods — the closest direct UK FMCG comparable — earns less than half Supreme's ROIC, has worse cash conversion, and trades at a 60%+ premium on EV/EBITDA. The peer gap is not justified by financial quality; it is justified, if at all, by the regulatory overhang on Vaping.
In the chart above, the natural rule "higher ROIC deserves higher EV/EBITDA" is broadly respected (NICL and APN cluster top-right). Supreme is the clear outlier — high ROIC, low EV/EBITDA. The market is offering ROIC of around 30% at a 5x multiple.
9. What to Watch in the Financials
What the financials confirm. Supreme is genuinely cash-generative, capital-light, and disciplined on acquisition pricing. The balance sheet has the firepower to keep doing bolt-ons through the next two years without re-leveraging. Returns on capital are top-quartile among UK consumer-staples peers. The valuation gap to peers is large enough to give a meaningful margin of safety on FY26 guidance.
What the financials contradict. The flat operating margin in FY25 versus the gross-margin step-up tells you SG&A grew unusually fast — not all of that is Trafford Park / acquisition integration; some is structural cost build that may not reverse. Receivables and inventory growing faster than revenue in FY25 is mild but worth tracking. Goodwill at ~12% of assets is fine for now, but the cumulative M&A pace (Clearly, Typhoo, SlimFast, Carabao distribution) means the forensic risk of pro-forma vs underlying revenue grows from here.
The first financial metric to watch is Vaping non-disposable revenue in the H1 FY26 (November 2026) results. If that line clears $55m for the half (implying ~$115m+ for the year), the disposable-ban transition is being substituted cleanly, FY26 guidance becomes credible, and the case for re-rating toward the peer median strengthens. If it lands below $48m, the FY26 EBITDA target is at risk and the current multiple is the new normal — not a discount.