This is a recent new listing. The CEO is apparently a charismatic and successful entrepreneur, and the business is capital light and fast growing.
A trading update the other day reported significant sales growth, Ebitda ahead of expectations and modest net debt:
For the year ended 31 March 2021, Supreme expects to report a c. 30% increase in revenues to at least £121 million (2020: £92.3 million), in-line with management’s expectations, and anticipates delivering Adjusted EBITDA slightly ahead of expectations of at least £19 million (2020: £16.2 million), an increase of c. 20%. Movements in Group margin reflect the changes in revenue mix following the acquisition of Provider Distribution in February 2020 which are partially offset by stronger growth in higher margin products in Vaping and Sports Nutrition & Wellness.
The Group remains highly cash generative, with net debt at 31 March 2021 of approximately £5.1 million (31 March 2020: £18.7 million).
Paul Scott’s verdict on Stockopedia was positive, although he did quibble with the use of Ebitda:
Supreme concentrates on distribution of fast-moving consumer staples, with a high profit per square foot at retailers - e.g. batteries, vaping products, vitamins, etc. So far so good, that’s a business model which appeals to me - repeat revenues, small & expensive items. Although I’m less keen on vaping products, given the as yet unknown long-term health risks.
My opinion - at my first glance, I like the look of this.
Comments to Paul’s Stockopedia post made favourable noises about the CEO:
I have a very small holding, huge part of the story for me is its charismatic CEO Sandy Chadha, who has built it from the ground up. They also seem to empower their sales team, which seems to get the most out of them. Great margins (for a buy and sell business) and a holding by Slater Investments.
I really like the fact that Supreme (LON:SUP) have migrated into Vape, Sports Nutrition and now Vitamins, all with excellent margins. Just searched the Supreme (LON:SUP) CEO and found an interesting article about him here…
Lastly a friend of mine who knows a few savvy investors has also heard positive things and decided to invest. The down side here is the lack of any long term track record, on the other hand that could present an opportunity to get in early before it takes off, maybe…
Has anybody else heard good things about SUP or taken a closer look at it? I’m not normally that keen on businesses that don’t have some strong support of brand/moat but this one does seem to generate operating margins in the mid teens, have no real debt, fast growth, good fcf generation and an energetic founder with a very delegated/trust based management approach. Thoughts?