Manchester Evening News

Vape firm remains upbeat despite disposable­s ban

COMPANY SAYS IT WILL BE UNAFFECTED BY MOVE

- By ALISTAIR HOUGHTON newsdesk@men-news.co.uk @MENnewsdes­k

VAPING company Supreme insisted the Government’s ban on disposable vapes will not affect its business as it issued an upbeat trading update.

Prime Minister Rishi Sunak today said the disposable products would be banned in a move to tackle a rise in young people vaping.

When the news broke this morning, shares in vaping companies including Supreme fell. But Supreme’s share price recovered after the group put out a statement to the Stock Exchange this afternoon, saying the company was prepared for the ban, and announcing a proposed £1m share buyback programme.

The group’s update for the nine months to December 31 hailed an ‘excellent trading performanc­e’ in Q3 and said: “It is now expected that FY 2024 will significan­tly outperform market expectatio­ns, with revenue projected to be at least £225m and Adjusted EBITDA anticipate­d to reach at least £38m - a doubling from FY 2023’s Adjusted EBITDA.”

Manchester-based consumer goods group Supreme said it expected that for the current financial year, a third of its revenue (£75m) would be derived from disposable vapes, accounting for 23% of its Adjusted EBITDA. Its other product ranges included vitamins and wellness products, as well as bulbs and batteries. Responding to the UK Government’s ban on disposable vapes, it said: “Supreme welcomes this clarity and as a responsibl­e business remains ahead of the curve, having already implemente­d a number of proactive measures, including narrowing and re-naming of flavours and tailoring packaging, as part of an ongoing commitment to eradicate underage vaping and continuing to support adult smokers by providing an affordable, sustainabl­e, safer alternativ­e to smoking.

“Supreme remains confident that vaping is, and will continue to be, the most credible and effective alternativ­e to cigarettes. Supreme has an establishe­d suite of fully compliant rechargeab­le pod systems, produces over 60 million 10ml bottles of e-liquid annually and has already become a principal supplier to the UK Government’s ‘Swap to Stop’ scheme.

“None of these revenue streams are expected to be adversely affected by the changes proposed by the Government earlier today.”

Supreme said it expected the disposable vape ban could actually cause a temporary rise in revenue as retailers look to invest in refillable vaping devices.

It said: “The company expects that more than half of disposable vape activity will permanentl­y transition to alternativ­e forms of vaping such as Pods and 10mls, and Supreme will work closely with its retail partners to manage this seamlessly. The board will continue to evaluate the ongoing impact of new regulation­s within the UK e-cigarette market as more clarity, particular­ly in respect of timing, is published.

The group also said it planned to launch a share buyback programme worth up to £1m over the next three months. It said: “This initiative reflects the board’s confidence in the company’s future value and our dedication to enhancing shareholde­r returns.”

Sandy Chadha, chief executive officer, said: “Supreme is at the forefront of the UK vape market, consistent­ly innovating and expanding our reach. The UK Government’s latest proposals, many of which Supreme has already proactivel­y embraced, support our strategic direction and focus.

“As a responsibl­e vaping supplier, we welcome changes that help prevent under-age vaping and will work with our various stakeholde­rs to work through the proposed legislatio­n.”

Supreme remains confident vaping will continue to be the most credible alternativ­e to cigarettes Supreme

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