2 July 2024
Supreme
plc
("Supreme,"
the "Company" or the "Group")
Audited Final Results for
the Year Ended 31 March 2024
- Strong trading across
FY24 in all divisions, with almost doubled profitability
overall
- Record levels of cash
generated from operations and ended the year bank
debt-free
- The recently-announced
acquisition of Clearly Drinks Limited provides product
diversification and incremental earnings immediately for the
Group
- The Group has continued
its positive trading momentum into the first quarter of FY25 and is
trading comfortably in line with current
expectations5
Supreme (AIM:SUP),
a leading manufacturer, supplier and brand owner of fast-moving
consumer products, announces its audited final results for the year
ended 31 March 2024 ("FY24" or "the Period").
Financial Highlights
|
FY24
£m
|
FY23
£m
|
%
change
|
Revenue
|
221.2
|
155.6
|
+42%
|
Gross
profit
|
63.5
|
40.9
|
+55%
|
Gross
profit %
|
29%
|
26%
|
+12%
|
Adjusted
EBITDA1
|
38.1
|
19.4
|
+96%
|
Adjusted
items
|
(0.6)
|
(0.8)
|
+25%
|
Profit
before tax
|
30.1
|
14.4
|
+109%
|
Adjusted
profit before tax2
|
30.7
|
15.2
|
+102%
|
EPS
|
19.1p
|
10.3p
|
+85%
|
Adjusted
EPS3
|
20.9p
|
11.8p
|
+77%
|
Net cash
from operations
|
27.1
|
19.3
|
+40%
|
Net
assets
|
58.0
|
40.0
|
+45%
|
Net
(debt)
|
(3.1)
|
(11.8)
|
+74%
|
Adjusted
net cash4
|
11.6
|
3.2
|
+263%
|
· Revenue growth of 42%, and 96% increase in Adjusted
EBITDA1, demonstrating an exceptional increase in
profitability.
· Revenue growth and gross margin % increases reported across
all divisions.
· Branded Distribution division, formerly known as Other
Consumer Goods, reported revenues of £63.5 million (FY23: £7.8
million), driven by the ElfBar and Lost Mary master distribution
agreement.
· Highly cash generative period, delivering £27.1 million cash
from operations in the Period (FY23: £19.3 million), resulting in
an Adjusted net cash position4 of £11.6 million by year
end (263% growth from FY23) with no bank borrowings.
· Completed £1.0 million share buy-back programme, supporting
the Board's commitment to delivering shareholder value.
Operational Highlights
· Consolidated warehousing operations at Ark, the Group's new
167,000 sq ft principal warehouse and distribution centre which
will facilitate both organic and acquisitive growth.
· Announced numerous proactive measures to combat underage
vaping, which Supreme strongly believes should be adopted by all
industry players.
· Appointed as a master distributor for ElfBar and Lost Mary in
the UK, reported within the Branded Distribution category (formally
known as Other Consumers Goods) and achieving this with very little
incremental investment into our people, professional or
establishment resources.
· At
the year end, the Group had available borrowing facilities of £55
million but £nil drawn down; the Group was entirely bank debt
free.
Dividends
· A
final dividend, subject to shareholder approval at the Annual
General Meeting on 24 September 2024, of 3.2 pence per
share.
· The
Group paid an interim dividend of 1.5 pence per share, which
together with the final dividend would take total dividends for the
year to 4.7 pence per share, an 57% increase on the prior year
dividend.
Outlook / Current Trading
· Supreme forecasts FY25 to be another profitable and highly
cash-generative year for the Group. Having made a positive start in
Q1, the Group is trading comfortably in line with current market
expectations5.
· The
Company's FY25 trading outlook for the Vaping and Branded
Distribution divisions is expected to be largely unaffected by the
Government's proposed future disposable vape ban.
· Alongside an ongoing focus on accelerating organic growth and
strategic cross-selling, the Company remains committed to exploring
complementary acquisition opportunities to further scale our
exceptional distribution channels. The recently announced
acquisition of Clearly Drinks Limited "Clearly Drinks"), a soft
drinks manufacturer and brand owner, on 21 June 2024 for a net
consideration of £15 million is directly in line with this
strategy. This acquisition provides product diversification for the
Group as well as incremental earnings.
Sandy Chadha, Chief Executive Officer of Supreme,
commented:
"Supreme has delivered an outstanding financial performance
across the Period, with strong revenue growth across all five of
our divisions.
Set against a challenging backdrop, we continue to be
committed to providing high-quality, high-value products to both
retailers and our customers.
Looking at our vaping business, we are fully committed to
doing what we can to support the eradication of underage vaping so
that the industry can get back to its core objective: helping adult
smokers find an affordable, sustainable, and safer alternative to
smoking. I am not concerned that the Government's vaping proposals
will have any long-term impact on Supreme as a responsible
manufacturer and distributor with resources and experience to adapt
to potential new market dynamics. Operationally and financially, we
are in an excellent position to expand organically and, as we've
successfully demonstrated in the past (and post-period end with the
Clearly Drinks acquisition), we continue to evaluate complementary
acquisitions.
We've made a very positive start to the current financial
year, and I look forward to updating all our stakeholders later
this year on our continued progress."
Retail Investor Presentation
A presentation for retail
investors covering the results for the year ended 31 March 2024
will be held at 3.30 p.m. on Tuesday, 2 July 2024.
The online presentation is open to
all existing and potential shareholders and registration is free.
Questions can be submitted during the presentation and will be
addressed at the end.
To register for the event, please
go to:
https://www.equitydevelopment.co.uk/news-and-events/supreme-investor-presentation-2july2024
1Adjusted EBITDA means
operating profit before depreciation, amortisation and Adjusted
items (as defined in Note 7 of the financial statements). Adjusted
items include share-based payments charge, fair value movements on
non-hedge accounted derivatives and non-recurring
items
2Adjusted profit before tax
means profit before tax and Adjusted items (as defined in Note 7 of
the financial statements). Adjusted items include share-based
payments charge, fair value movements on non-hedge accounted
derivatives and non-recurring items
3Adjusted EPS means Earning
per share, where Earnings are defined as profit after tax but
before amortisation of acquired intangibles and Adjusted items (as
defined in Note 7 of the financial statements). Adjusted items
include share-based payments, fair value movements on non-hedge
accounted derivatives and non-recurring items
4Adjusted net cash means net
debt/(cash) as defined in Note 21 to these financial statements
excluding the impact of IFRS16
5Analyst consensus
immediately before this announcement for the year ending 31 March
2025 was revenue of £242 million and Adjusted EBITDA1 of
£36.9 million
Enquiries:
Supreme
plc
Sandy
Chadha, Chief Executive Officer
Suzanne
Smith, Chief Finance Officer
|
via Vigo
Consulting
|
Shore
Capital (Nominated Adviser and
Joint Broker)
Mark
Percy / David Coaten / Rachel Goldstein - Corporate
Advisory
Ben
Canning - Corporate Broking
|
+44 (0)20
7408 4090
|
Zeus (Joint
Broker)
Jordan
Warburton / Alex Campbell-Harris - Investment Banking
Benjamin
Robertson - Corporate Broking
|
+44
(0)161 831 1512
|
Vigo
Consulting (Financial Public
Relations)
Jeremy
Garcia / Kendall Hill / Anna Stacey
supreme@vigoconsulting.com
|
+44 (0)20
7390 0230
|
About Supreme
Supreme supplies products across
six categories; Batteries, Lighting, Vaping, Sports Nutrition and
Wellness, Branded Distribution and Soft Drinks. The Company's
capabilities span from product development and manufacturing
through to its extensive retail distribution network and direct to
consumer capabilities. This vertically integrated platform provides
an excellent route to market for well-known brands and
products.
The Group has over 3,000 active
business accounts with retail customers who manage over 10,000
branded retail outlets. Customers include B&M, Home Bargains,
Poundland, Tesco, Sainsburys, Morrisons, Amazon, The Range,
Costcutter, Asda, Halfords, Iceland, Waitrose, Aldi and HM Prison
& Probation Service.
In addition to distributing
globally-recognised brands such as Duracell, Energizer and
Panasonic, and supplying lighting products exclusively under the
Energizer, Eveready, Black+Decker and JCB licences across 45
countries, Supreme has also developed brands in-house, most notably
88Vape, has a growing footprint in Sports Nutrition and Wellness
via its principal brands Sci-MX and Battle Bites, and has recently
expanded into the soft drinks market with the acquisition of
Clearly Drinks, adding established brands such as Perfectly Clear
and Northumbria Spring to its portfolio.
https://investors.supreme.co.uk/
Chairman's
Statement
I am pleased to report that
Supreme delivered a record performance in FY24, driven by organic
revenue and profit growth across all our divisions. The principal
driver for revenue growth was the addition of the ElfBar / Lost
Mary disposable vape distribution opportunity whilst our Vaping
division also continued to be a major growth engine. All other
divisions also remained profitable and resilient.
Supreme has delivered a strong
financial performance in FY24, having almost doubled EBITDA
year-on-year and generated record levels of cash. Consequently, we
have ended this year bank debt-free, which is particularly pleasing
for the Board in the context of the seven acquisitions completed by
the Group since 2021. The Group delivered revenue
growth of 42% to £221.2 million (FY23: £155.6 million), and
Adjusted EBITDA1 of £38.1 million (FY23: £19.4 million),
representing an increase of 96% on the
prior period.
Supported by our
capital-light model and strong cash conversion,
the Board approved a £1.0 million share buyback programme, further
reflecting our confidence in the Group's future value and
dedication to enhancing shareholder returns.
In addition, the Board has
recommended a final dividend of 3.2 pence per share, resulting in
4.7 pence per share in aggregate for the year, a 57% increase on
FY23.
FY24 was another excellent period
for Supreme's Vaping division, with revenues up £6.7 million to
£82.8 million, and our own-brand disposable vapes reported sales of
£13.7 million. Our Batteries division experienced revenue growth of
£1.0 million and continues to generate a predictable revenue stream
for the Group despite overall market declines, highlighting the
strength of Supreme's proposition. Our Lighting division has been
reassuringly stable, reporting revenue growth of 7% (£1.1 million)
to £16.5 million, and we remain a longstanding supplier and
supportive partner to our biggest lighting retailers. Revenue for
the Sports Nutrition & Wellness category grew by 8% to £18.0
million, driven by a substantial increase in protein powder
revenue.
Following Supreme's appointment as
a master distributor for ElfBar and Lost Mary, we renamed our
"Other Consumer Goods" category to "Branded Distribution" to more
accurately describe the nature of the products and the business
model housed in this category. The ElfBar and Lost Mary appointment
saw us distribute disposable vapes to new blue-chip retail
customers, including Tesco, and further enhanced the Group's
cross-selling opportunities. Collectively, the business unit
reported revenue of £63.5 million in the Period.
Macroeconomically, FY24 was a
challenging period. Well-publicised inflationary pressures,
alongside the ongoing cost-of-living crisis, inevitably posed
challenges for our suppliers, customers, and staff. Yet, as
displayed by the growth detailed above, we successfully navigated
these challenges across all our divisions, and have continued to
provide high-quality, low-price goods to retailers and therefore
consumers.
Regarding our broader exposure to
the UK vaping market, Supreme remains supportive of the
Government's plans to curb underage vaping. We have been consistent
in articulating how this can be achieved, and in FY24 announced new
measures for our 88Vape brand, including the introduction of plain
packaging, the discontinuation of brightly coloured disposables,
the simplification of flavour names, and ensuring the Group only
trades with retailers which enforce robust age verification. We
believe that vaping should be a smoking cessation tool, and that
adults looking to quit smoking should be supported in a
cost-effective way. We have also considered the environmental
impact of vapes and have rolled out vape disposal units across the
entire estate of our largest customer, B&M Retail, with the
goal of encouraging more responsible disposal of single-use
devices.
Supreme has also continued to
demonstrate its ability to execute strategic acquisitions and, more
importantly, integrate these businesses into the Group in a timely
manner. An example of this is the seamless integration of Liberty
Flights into the Group's existing business processes. This
acquisition has broadened the Company's vaping proposition, with
the consequential significant product overlap and manufacturing
processes across the Group's Vaping division allowing for enhanced
margins across the enlarged business. It has also generated further
cross-selling opportunities across Supreme's existing customer
base.
In January 2024, we acquired the
assets of FoodIQ UK Holdings Limited ("Food IQ"), the protein
manufacturer, for consideration of £175,000, which included a £1.2
million state-of-the-art, accredited, and automated contract
manufacturing facility that opened only 18 months prior. A key
component to the acquisition, this purpose-built facility is
expected to increase the Group's Sports Nutrition & Wellness
division's manufacturing capacity and capability, supporting both
medium and long-term growth.
This ability to identify
opportunities, act strategically, and integrate effectively
underpins Supreme's success. Our team is talented in recognising
comparable, well-priced, immediately earnings-enhancing brands and
merging them into the Supreme portfolio with a keen focus on our
core business offering. Accordingly, we continue to explore
accretive M&A opportunities to retain a diverse and competitive
offering of high-value, low-cost products. At the year end, the
Group had immediate access to bank revolving credit and invoice
discounting borrowing facilities of £55 million which were entirely
undrawn, providing significant liquidity to finance such M&A
opportunities.
The Board continues to be
committed to ESG concerns, ensuring that the Company is proactive,
rather than reactive, to ESG responsibilities. Supreme manages its
ESG operations via various sub-committees, which ensure that our
focus remains on "doing the right thing" in how we conduct
ourselves and our business for the good of the environment, our
community, our people, and our stakeholders.
The Board remains pleased with the
Group's performance, and on its behalf, I would like to thank all
our employees for their fantastic efforts, persistence, and
diligence during the Period.
Our colleagues are integral to the
success of Supreme, and we look forward to seeing what they will
continue to achieve. Our management team has driven Supreme to
produce excellent results, and we are confident that they can lead
the Company to achieve its medium and long-term growth
goals.
Paul McDonald
Non-executive Chair
1 July 2024
1Adjusted EBITDA means
operating profit before depreciation, amortisation and Adjusted
items (as defined in Note 7 of the financial statements). Adjusted
items include share-based payments charge, fair value movements on
non-hedge accounted derivatives and non-recurring
items
Chief Executive Officer's Review
Introduction
The year ended 31 March 2024 was
an exceptional period of growth for Supreme, both on an operational
and financial level. Not only did we deliver a record financial
performance, underpinned by excellent organic
revenue and profit growth across all divisions, but we also
significantly enhanced our manufacturing and distribution
credentials by commencing operations from our new Ark facility in
Manchester.
The Group produced an outstanding
financial performance, increasing revenue by 42% to £221.2 million
(FY23: £155.6 million), alongside a 55% increase in gross profit to
£63.5 million (FY23: £40.9 million). Adjusted EBITDA1 also increased to record levels
of £38.1 million (FY23: £19.4 million), which represented a 96%
improvement on the prior year - a quite staggering performance from
the business. The Group generated operating cash of £27.1 million
(FY23: £19.3 million), further demonstrating the highly
cash-generative nature of our core operations. Adjusted net
cash4 in the Period increased by £8.4 million to £11.6
million and the Group proposes to pay a final dividend of 3.2 pence
per share, resulting in 4.7 pence per share in total for the year
(FY23: 3.0 pence per share in total).
The Group has continued to see
strong sales traction across our product mix, with our vaping
products, both owned and branded (reported within Vaping and
Branded Distribution), performing particularly well. Elsewhere, our
Sports Nutrition & Wellness, Batteries and Lighting categories
all grew both their revenues and gross profits across the
Period.
Although our focus during the
Period was primarily on accelerating organic growth, as a business
we have continued to explore acquisition opportunities which we
believe have the potential to enhance the Group's overarching
trading performance. In January 2024, we completed the acquisition
of the assets of protein product manufacturer FoodIQ out of
administration, for consideration of £175,000. This transaction
provided Supreme with access to a highly sophisticated, accredited,
and automated contract manufacturing facility near London that
originally cost more than £1.2 million to build and is less than
two years old. The site was purpose-built for the development of
sports nutrition products and management expects the facility will
increase the Group's Sports Nutrition & Wellness manufacturing
capacity and capability to help ensure we meet growing
demand.
As part of the Company's
commitment to safe and responsible vaping consumption, we have
repeatedly outlined our support of all regulation that helps
prevent underage vaping in the UK, and implemented numerous
proactive measures during the Period to ensure that our own-brand
products are not attractive to underage vapers, including toning
down colours in 88Vape packaging and streamlining the brand's
flavour range. Our continued investment in
rechargeable pod system vaping devices, coupled with the Company's
exceptional progress in developing a uniquely diverse vape product
mix, has ensured that the Group is well positioned to adapt to
changes in the UK e-cigarette market.
In March 2023, we entered a
15-year lease for Ark, the Group's new 167,000 sq ft principal
warehouse and distribution centre. Following a complex fit out
process, 12,000 pallet spaces have been relocated, with the Group
now operating from the new facilities. This new centre, with the
committed 15-year lease, future proofs our operations in the medium
term and has enabled our teams to both consolidate and streamline
storage and distribution, whilst also creating a working
environment of which our people can be proud of.
FY24 has been a hugely successful
period of growth for Supreme and I strongly believe that we remain
firmly on track to maintain this impressive growth momentum in FY25
and beyond.
Operational Review
I am delighted with the strong
performance of the Group, which further demonstrates that our
vertically integrated platform provides the best route to market
for both Supreme and our customers. Supreme's successful track
record of developing and distributing our own product, alongside
providing a truly unique distribution platform for third parties,
has underpinned our robust financial growth track
record.
Management will therefore continue
to focus on the following strategic growth drivers,
namely:
· Continue to explore and execute on complementary earnings
enhancing acquisitions;
· Further leverage cross-selling opportunities to expand our
customer footprint and average revenue per customer;
· Continue to explore and develop new product verticals that
complement Supreme's customer base, focused on a high quality and
good value consumer proposition;
· Leverage our new manufacturing and distribution footprint to
create ongoing economies of scale and explore bringing the
manufacture of even more products in-house; and
· Enhance online distribution and services to further grow our
B2B and D2C sales channels.
Vaping
The Group's Vaping division
delivered another solid performance in FY24, with revenues
increasing 9% to £82.8 million (FY23: £76.1 million), driven by a
combination of organic retail sales growth and a positive
performance from our longstanding HM Prison and Probation Service
("HMPPS") contract.
During the Period, Liberty
Flights' manufacturing, warehousing, and business administration
functions were successfully integrated into Supreme, generating
volume and purchasing synergies alongside creating further
cross-selling opportunities.
As an industry leader,
we have made good progress implementing
the proactive measures we announced in October
2023, which are designed to ensure our range of 88Vape
products do not create any interest from
those underage. These include:
· Reducing the use of colour in 88Vape packaging;
· Discontinuing the use of coloured hardware for all of the
brand's disposables;
· Using only age-appropriate naming conventions to describe
88Vape flavours;
· Trading only with retailers and e-tailers who commit to
having robust age verification controls in place; and
· Making recommendations to retail customers to locate vapes
away from confectionery.
Thanks to the hard work and
expertise of our innovation team, we continued to roll-out new
vaping products and now boast a first-class range of reusable
devices, including an 88Vape-branded rechargeable pod system.
Looking ahead, we expect demand for pod system vaping devices to
continue to grow and are well placed to support retail customers as
they begin to increase their stock of the product.
Supreme has been a longstanding
supporter of UK Government initiatives to promote vaping as a
smoking cessation tool, and we continue to collaborate with HMPPS
and participate in the Government's 'Swap to Stop' campaign to
facilitate this objective.
Supreme has become the leading
voice in the ever-evolving UK vaping landscape, and we firmly
believe that positive regulatory reform can provide a stable base
from which we can continue to grow our business.
UK Government Vaping
Proposals
Supreme remains mindful of the UK
Government's highly publicised proposal to ban disposable vaping
devices in a bid to combat underage vaping, as well as its
provisional plan to introduce an excise duty on vaping products,
albeit from October 2026. Total revenue from disposable vapes in
aggregate came to £70.7 million in FY24, representing 32% of Group
revenue and was reported across the Vaping and Branded Distribution
category.
We continue to work with our key
vaping customers and partners to ensure a smooth transition as any
new measures are absorbed by the market. Supreme
has an established suite of fully compliant rechargeable pod
systems, produces over 60 million 10ml bottles of e-liquid annually
and, as highlighted above, has already become a principal supplier
to the UK Government's 'Swap to Stop' scheme. Vaping remains
a credible, sustainable, and highly effective smoking cessation
tool endorsed by global public health officials and is integral to
the UK Government's 'Achieving Smoke-free 2030'
initiative.
Branded Distribution
(previously Other Consumer Goods)
As previously communicated,
management chose not to report the ElfBar and Lost Mary disposable
vape revenue stream within the Vaping division so as not to dilute
or detract from our core Vaping business. ElfBar and Lost Mary are
not brands owned or manufactured by Supreme, so have an entirely
different financial profile to the Group's core Vaping business.
They are much more aligned to the profile of our pre-existing Other
Consumer Goods category (now renamed Branded
Distribution).
The division reported revenues of
£63.5 million (FY23: £7.8 million), with the ElfBar and Lost Mary
distribution agreement contributing £57.0 million. Supreme
generated the remaining £6.5 million from sales in its core
business, which is the distribution of branded household laundry
and cleaning brands. The blended margin of the category remains
relatively low compared to other product categories within the
Group at 14% (FY23: 10%)
The speed with which Supreme was
able to establish, onboard, and scale this opportunity with
close-to 100% service levels was testament to the capabilities of
the Group's vertically integrated platform, specifically with
reference to sourcing, warehousing, and distribution. More notably,
it was delivered with minimal additional incremental overheads,
which can be credited to our exceptional employees, who have been
at the centre of our success this year.
Sports Nutrition &
Wellness
The Sports Nutrition &
Wellness division performed strongly during the Period, delivering
revenues of £18.0 million (FY23: £16.7 million), an increase of 8%.
Sci-MX, our leading protein powder, shakes
and bars brand, has continued to deliver
significant sales momentum since the rebrand, supported by
strategic marketing, advertising, and influencer campaigns. With
all Sci-MX products now manufactured in-house, the brand is set to
benefit from the Company's increased manufacturing space and
distribution capabilities, alongside the Group's recent FoodIQ
acquisition. Powders now represents a sizeable component of the
division compared to previous periods, resulting in a positive step
change in gross margin of the category overall from 16% to
29%.
We launched new Sealions vitamins
pouches, alongside an exciting collection of protein-focused
products under the brand which is already beginning to generate
cross-selling opportunities. Supreme recognises the strong growth
potential of the protein powders market and this decision to
further diversify the Sealions portfolio enables us to leverage
another fully established e-commerce channel to market protein
products to an even wider demographic whilst underlining our
commitment to providing consumers with great-value nutritional
supplements.
Pleasingly, inflationary pressures
impacting raw materials continue to subside, including those
affecting the price of whey which is the key ingredient in most of
our protein products. This, together with our recent facility
upgrades and FoodIQ acquisition, ensures Supreme is well positioned
to further increase profit margins across the division and explore
new retail opportunities in FY25 and beyond.
Lighting
The Lighting division generated a
reassuring recovery across FY24, with revenue up 7% to £16.5
million (FY23: £15.4 million), whilst we retained our position as a
longstanding supplier and supportive partner to our biggest retail
customers. Recent licence extensions with Energizer and Eveready
have positioned the Group well for future trading, and so has our
new exclusive supply agreement with
Black+Decker.
Facilitated by our vertically
integrated platform, we were able to respond rapidly to the recent
rise in global torches sales, adding Duracell torches to our
already broad Lighting product portfolio. Another key development
during the Period was the investment into out B2B e-commerce site
dedicated to our Lighting division to help drive sales and expand
our wholesale presence across the UK and Europe.
Batteries
The Group's Batteries division
remains profitable, delivering revenue growth of 3% to £40.5
million (FY23: £39.5 million) which was driven by a mix of
inflationary price increases and volume growth.
We have a proud 36-year history
operating in the batteries industry and in that time have developed
trusted relationships with the largest brands in the market to
consolidate our position as the UK's largest distributor. Whilst
the market, overall, has declined, Supreme grew its market share,
driven by our operational scale and the resilience of the
discounter retailers.
Supreme supplies domestic
household batteries to a broad range of UK retailers, wholesalers
and online outlets including discounters, supermarkets, hardware
stores, toy stores, convenience retail, garages and DIY stores,
whilst the Company also has an exclusive licensing agreement for
JCB batteries. The scope of our Batteries division operations means
we have an important responsibility to ensure that our packaging is
as eco-friendly as possible. Pleasingly, almost all the batteries
we sell come in plastic-free packaging and we are also focused on
ensuring the carbon footprint of our manufacturing and distribution
processes are kept to a minimum.
The category continues to generate
consistent, predictable, profitable, and growing revenue for the
Group, with minimal costs to serve. With sticky customer
relationships and an extensive UK distribution network, we look
forward to further capitalising on the cross-selling opportunities
our favourable reputation in the batteries space continues to
create.
Outlook
Supreme forecasts FY25 to be
another profitable and highly cash-generative year for the Group.
Having made a positive start in Q1, the Group is trading
comfortably in line with current market
expectations5.
Alongside an ongoing focus on
accelerating organic growth and strategic cross-selling, the
Company remains committed to exploring complementary acquisitional
opportunities to further exploit our world class distribution
channels.
The Board is mindful of potential
legislative changes to the UK vaping market, but is confident in
the Group's future growth prospects, and remains encouraged by both
the positive impact of the new warehouse facility and the easing of
raw material inflationary pressures. Supreme is well placed to
further improve profit margins and consolidate its status as a
leading UK provider of high-quality, in-demand, and affordable
consumer goods.
Sandy Chadha
Chief Executive Officer
1 July 2024
1Adjusted EBITDA means
operating profit before depreciation, amortisation and Adjusted
items (as defined in Note 7 of the financial statements). Adjusted
items include share-based payments charge, fair value movements on
non-hedge accounted derivatives and non-recurring
items
4Adjusted net cash means net
debt/(cash) as defined in Note 21 to these financial statements
excluding the impact of IFRS16
5Analyst consensus
immediately before this announcement for the year ending 31 March
2025 was revenue of £242 million and Adjusted EBITDA1 of
£36.9 million
Chief Finance Officer's Review
I am delighted to present our
financial results for FY24. The Group delivered a very strong
financial performance with all financial metrics delivering
positive momentum in the Period. Revenue increased by 42% to £221.2
million and Adjusted EBITDA1 almost doubled from £19.4
million in FY23 to £38.1 million in FY24 (+96%). What's more
pleasing is that the vast majority of this growth was achieved
organically.
The Group has zero bank borrowings
at the year-end, Adjusted net cash4 of £11.6 million
(FY23: £3.2 million) and the balance sheet was notably stronger
having grown net assets by £18.0 million to £58.0 million (FY23:
£40.0 million). The net cash position is particularly notable in
the context of the seven acquisitions completed by the Group since
2021.
Impressively, revenue grew across
all our categories: Batteries, Lighting, Vaping, Sports Nutrition
& Wellness, and Branded Distribution. Gross profit as a
percentage of sales also grew in all categories, highlighting the
strength of the various sourcing and manufacturing models employed
across the Group.
The table below summarises the key
financial measures and their comparisons to the prior year. The
commentary in this review references alternative performance
measures which are described as 'Adjusted', meaning that in the
Directors' judgement, they need to be disclosed separately by
virtue of either: their volatility year-on-year; their one-off
nature; their size, their non-operating nature; or because the
adjustment of a particular item is widely accepted and conducted by
peers (to ensure comparability with other listed businesses). In
addition, this review also references 'net debt' which is defined
as closing cash, as reported on the balance sheet, net of
borrowings, as defined in Note 21.
|
FY24
£m
|
|
FY23
£m
|
%
change
|
Revenue
|
221.2
|
|
155.6
|
+42%
|
Gross
profit
|
63.5
|
|
40.9
|
+55%
|
Gross
profit %
|
29%
|
|
26%
|
+12%
|
Adjusted
EBITDA1
|
38.1
|
|
19.4
|
+96%
|
Adjusted
items
|
(0.6)
|
|
(0.8)
|
+25%
|
Profit
before tax
|
30.1
|
|
14.4
|
+109%
|
Adjusted
profit before tax2
|
30.7
|
|
15.2
|
+102%
|
EPS
|
19.1p
|
|
10.3p
|
+85%
|
Adjusted
EPS3
|
20.9p
|
|
11.8p
|
+77%
|
Operating
cash flow
|
27.1
|
|
19.3
|
+40%
|
Net
assets
|
58.0
|
|
40.0
|
+45%
|
Net
(debt)
|
(3.1)
|
|
(11.8)
|
+74%
|
Adjusted
net cash4
|
11.6
|
|
3.2
|
+263%
|
Revenue
Revenue for FY24 was £221.2
million (FY23: £155.6 million), an increase of 42%. Almost all of
this growth arose organically (£61.3 million) whilst the remainder
of the growth (£4.3 million) came from the annualization effect of
the businesses acquired in FY23. All divisions across the Group
reported growth and further details, by division, are presented
below.
Revenue by division
Revenue for Batteries was £40.5
million in FY24 (FY23: £39.5 million), growth of 3%, arising from a
combination of increased volume and price. There has been a notable
change in mix year-on-year which explains the increase in gross
profit as a percentage of sales. For the first time, Energizer has
overtaken Duracell in Supreme's sales of branded batteries, an
indication of how the wider market dynamics are
changing.
Revenue for Lighting was £16.5
million (FY23: £15.4 million), growth of 7%, confirming the
recovery of the category following a retailer overstocking issue in
the prior year. Whilst all listings and customers were retained
during the Period, we did report a slowdown in consumer spending in
the second half of the year which may signal an inevitable
longer-term trend as lightbulbs begin to last longer and
replacement cycles slow down. Regardless, we expect a further
recovery in this category across FY25.
Revenue for Vaping was £82.8
million (FY23: £76.1 million), growth of 9%. The businesses
acquired in FY23 represented £4.3 million of the growth whilst the
organic growth of £2.4 million predominantly came from e-liquids
and the HMPPS contract. Disposable vape sales in this division of
£13.7 million in FY24 was broadly in line with the prior year.
Despite the changing market dynamics within the industry, the
popularity of Supreme's 'hero' 10ml liquids was unchallenged and we
continue to report volume growth which is a key driver in the
growing levels of gross profit margin for the division. E-liquids
generate the highest levels of return across the Supreme product
portfolio owing to the Company's best-in-class manufacturing and
economies of scale.
Revenue for Sports Nutrition &
Wellness was £18.0 million (FY23: £16.7 million), growth of 8%.
Following a period of substantial whey input price inflation in our
supply chain during FY23, the category reported a partial reversal
of this inflation in FY24 where whey prices returned to a more
normal level. The revenue growth was driven by a substantial
increase in powder revenue (increase in volume offset by a
reduction in price, linked to the deflation) offset by a decline in
sales of protein snack bars. This means that powders now account
for more of the category overall than before and this shift in mix
alongside the lower whey input prices has driven the increase in
overall gross margin to 29% for the category (FY23:
16%).
In FY24, we re-named the Other
Consumer Goods category to Branded Distribution following the
Company's appointment as a master distributor for ElfBar and Lost
Mary, given this category is exclusively involved in the
distribution of third-party consumer goods. The division reported
revenue of £63.5 million (FY23: £7.8 million) with the incremental
revenue arising almost exclusively from Supreme's appointment as a
master distributor of ElfBar and Lost Mary disposable vape
products, two of the UK's most recognised vaping brands. Total
revenue from disposable vapes in aggregate came to £70.7 million in
FY24, representing 32% of Group revenue.
Gross profit
Gross profit for FY24 was £63.5
million (FY23: £40.9 million), growth of 55%. As a percentage of
revenue, gross profit was 29% (FY23: 26%) with higher rates of
gross profit arising in all divisions. In Batteries, the increase
in gross profit margin was the result of a change in sales mix. For
Lighting, it was the reduced focus on Free On Board ("FOB")
arrangements (i.e. shipments sent directly from the Far East to
customers) combined with a leaner supply chain and better shipping
rates. For Vaping, this was the result of the consolidation of
manufacturing into one single site in Manchester following the
three vaping manufacturing acquisitions undertaken in FY23,
combined with further economies of scale and manufacturing
efficiencies. In Sports Nutrition & Wellness, the increase in
gross profit margin arose from a shift in sales mix towards
manufactured products (powders and vitamins) plus the settling back
down of input costs on whey generated higher rates of gross profit
as a percentage of sales. The increase in blended gross profit %
for the Group overall was in spite of the incremental ElfBar / Lost
Mary revenue reported at 15% gross margin.
Adjusted EBITDA1
Administrative expenses reported
within Adjusted EBITDA1 (i.e. excluding depreciation and
amortisation and adjusted items) were £25.4 million in FY24 (FY23:
£21.5 million), an increase of £3.9 million:
· £2.3
million of this arose within people costs as a result of the full
year impact of the cost-of-living pay rise initiative that took
place in September 2022, the reinstatement of the CEO's salary
(which he sacrificed in FY23 to compensate for this cost-of-living
initiative), new hires and bonuses;
· £1.0
million of the increase arose within establishment costs and
related to an increase in business rates across the property
portfolio and the addition of Ark (the new warehouse and
distribution centre);
· £0.2
million was a result of increased utility costs across the Group in
line with national increases; and
· a
further £0.3 million related to increased professional expenses
(specifically audit and insurance), owing to the step change in the
size of the Group and industry-accepted increases.
The remainder of the increase in
administrative expenses related to increases in selling costs,
aligned to the increase in top line revenue (distribution,
commission and listing fees). Despite the annualization effect of
the FY23 acquisitions, there were no resulting increases in
overheads in FY24 owing to the integration of these businesses into
Supreme's core platform.
As a result, Adjusted
EBITDA1 increased by £18.7 million (96%) in the year to
£38.1 million (FY23: £19.4 million).
Adjusted items
Adjusted items were £0.6 million
compared to £0.8 million the year before. These costs related to
share-based payment charge of £1.2 million (FY23: £1.5 million),
£0.6 million credit in relation to fair value movements on
financial derivatives (FY23: £1.1 million charge), £0.7 million
credit owing to the release of over-accrued contingent
consideration in respect of Liberty Flights (FY23: £nil), and £0.7
million of integration expenses in relation to the businesses
acquired in FY24 and FY23 (FY23: £1.0 million).
The Board believes that by
adjusting these items from profitability, it was able to understand
the underlying performance of the business more clearly and further
information pertaining to these items can be found in Note 7 to
these financial statements.
Finance costs
Finance costs (net of interest
income) were £1.9 million in the year (FY23: £1.0 million), split
between interest arising from borrowings (net of interest on
deposits) in the year of £0.7 million, the unwind of discounting on
the deferred consideration of Liberty Flights of £0.2 million,
arrangement fees of £0.2 million and the interest relating to the
lease liabilities under IFRS16 of £0.9 million.
Taxation
Total tax charge in the year was
£7.7 million (FY23: £2.5 million), giving rise to an effective tax
rate of 25% (FY23: 17%) primarily as a result of the increase in UK
corporation tax from 19% to 25%.
Profit after tax and earnings per share
Profit after tax was £22.4 million
compared to £12.0 million in FY23, growth of 87%. As a result,
earnings per share increased by 85% to 19.1p (FY23: 10.3p) and on a
fully diluted basis increased from 9.7p to 18.1p.
On an adjusted profit after tax
basis, which we consider to be a better measure of performance,
adjusted earnings (as calculated in note 11) were £24.5 million
(FY23: £13.8 million) and adjusted earnings per share3
was 20.9p (FY23: 11.8p).
Dividends
The Group's dividend policy is to
pay an annual amount equivalent to around 25% of net profit. In
January 2024, the Group paid an interim dividend of 1.5p per share
and the Directors will recommend a final dividend of 3.2p per share
at the 2024 Annual General Meeting to be held on 19 September
2024. This will be paid on 24 September
2024 to shareholders on the register at the close of business on 23
August 2024. The ex-dividend date will be 22 August
2024.
Cash flow
|
FY24
£m
|
FY23
£m
|
Adjusted
EBITDA1
|
38.1
|
19.4
|
Movement in working capital &
other items
|
(5.7)
|
1.6
|
Tax paid
|
(5.3)
|
(1.7)
|
Net cash from operations
|
27.1
|
19.3
|
Debt
servicing/raising/repaying
|
(5.0)
|
(2.1)
|
Lease payments
|
(1.2)
|
(1.0)
|
Capex
|
(5.4)
|
(1.3)
|
M&A
|
(6.1)
|
(10.3)
|
Proceeds from sale of
assets
|
0.1
|
4.0
|
Dividends net of share
issues
|
(4.3)
|
(5.1)
|
Share buy back
|
(1.0)
|
-
|
Net cash flow
|
4.2
|
3.5
|
The Group generated £27.1 million
net cash from operations in FY24 (FY23: £19.3 million). The
increase in working capital was the net impact of an initial
investment into working capital specifically in respect of the
ElfBar and Lost Mary distribution opportunity of £14.6 million, and
a reduction in working capital across the remainder of the Group
via a number of working capital initiatives. The tight management
of working capital in times of expansion and growth reflects the
tenacity with which the business continues to be
managed.
£5.4 million was reported within
capex and was largely in respect of the fitout of Ark, Supreme's
new 167,000 sq ft warehouse and distribution centre. £6.1 million
reported as M&A related to the acquisition of Superdragon
(reported on the last day of FY23 but paid for during the first
week of FY24) of £2.7 million and the payment of deferred and
contingent consideration in respect of Liberty Flights totalling
£3.4 million. As expected, the Group serviced its dividend and
taxation obligations which totalled £9.5 million (FY23: £6.8
million) plus a further £1.0 million outflow in respect of the
share buyback process that concluded immediately before year end
resulting in the acquisition of 828,000 shares at an average price
of 121p each which were immediately cancelled.
In respect of financing, the
Group's cashflows were supported by its £35 million revolving
credit facility ("RCF") and its £20 million invoice financing
facility during the Period. At its peak in H1 FY24, the Group had
drawn £16.6 million on its facilities but by year-end this was
fully repaid. In fact, the Group was entirely bank
debt-free at the balance sheet date in
addition to having £11.6 million of cash resulting in an Adjusted
net cash4 position of £11.6 million at year end (FY23:
Adjusted net cash4: £3.2 million).
At year end, the Group had
immediate access to borrowing facilities of £55 million which were
entirely undrawn at year end which will provide significant
liquidity to finance M&A or further organic growth in the form
of working capital.
Net debt
|
FY24
£m
|
FY23
£m
|
Cash
|
(11.6)
|
(7.5)
|
Borrowings
|
-
|
4.3
|
Adjusted net
(cash)4
|
(11.6)
|
(3.2)
|
IFRS 16 lease
liabilities
|
14.7
|
15.0
|
Net debt
|
3.1
|
11.8
|
Use of non-GAAP measures in the
Group financial statements
Certain measures have been used to
increase understanding of the Group's Report and Accounts. These
measures are not defined under IFRS and therefore may not be
directly comparable with adjusted measures presented by other
companies. The non-GAAP measures are not intended to be a
substitute for or superior to any IFRS measure of performance;
however they are considered by management to be important measures
used in the business for assessing performance. The non-GAAP
measures used in this strategic review and more widely in this
Annual Report are defined in the footnotes below and set out in
Note 7 to these financial statements.
Suzanne Smith
Chief Finance Officer
1 July 2024
1Adjusted EBITDA means operating profit before depreciation,
amortisation and Adjusted items (as defined in Note 7 of the
financial statements). Adjusted items include share-based payments
charge, fair value movements on non-hedge accounted derivatives and
non-recurring items.
2Adjusted Profit before tax means profit before tax and
Adjusted items (as defined in Note 7 of the financial statements)
Adjusted items include share-based payments charge, fair value
movements on non-hedge accounted derivatives and non-recurring
items.
3Adjusted EPS means Earning per share, where Earnings are
defined as profit after tax but before amortisation of acquired
intangibles and Adjusted items (as defined in Note 7 of the
financial statements). Adjusted items include share based payments,
fair value movements on non-hedge accounted derivatives and
non-recurring items.
4Adjusted net cash means net debt as defined in Note 21 to
these financial statements excluding the impact of
IFRS16.
Consolidated Statement of
Comprehensive Income
for the
Year Ended 31 March 2024
|
|
Year Ended
31 March
2024
|
Year Ended
31 March
2023
|
|
Note
|
£'000
|
£'000
|
|
|
|
|
Revenue
|
4
|
221,249
|
155,612
|
Cost of
sales
|
6
|
(157,716)
|
(114,758)
|
Gross
Profit
|
|
63,533
|
40,854
|
|
|
|
|
Profit on
disposal of Cuts Ice trademarks
|
7
|
-
|
2,787
|
Administration expenses
|
6
|
(31,515)
|
(28,192)
|
Operating
profit
|
|
32,018
|
15,449
|
|
|
|
|
Adjusted
EBITDA1
|
|
38,116
|
19,392
|
Depreciation
|
13
|
(3,772)
|
(2,200)
|
Amortisation
|
12
|
(1,733)
|
(915)
|
Adjusted
items
|
7
|
(593)
|
(828)
|
|
|
|
|
Operating
profit
|
|
32,018
|
15,449
|
|
|
|
|
Finance
income
|
9
|
147
|
25
|
Finance
costs
|
9
|
(2,045)
|
(1,037)
|
Profit before
taxation
|
|
30,120
|
14,437
|
|
|
|
|
Income
tax
|
10
|
(7,694)
|
(2,469)
|
Profit for the
year
|
|
22,426
|
11,968
|
|
|
|
|
Other comprehensive
(expense)/income
|
|
|
|
Items that may be
reclassified to profit or loss
|
|
|
|
Exchange
differences on translation of foreign operations
|
|
(1)
|
101
|
Total other comprehensive
(expense)/income
|
|
(1)
|
101
|
Total comprehensive
income
|
|
22,425
|
12,069
|
|
|
|
|
Earnings
per share - basic
|
11
|
19.1p
|
10.3p
|
Earnings
per share - diluted
|
11
|
18.1p
|
9.7p
|
Note 1: Adjusted EBITDA, which is defined as operating profit
before depreciation, amortisation and Adjusted items (as defined in
Note 7) is a non-GAAP metric used by management and is not an IFRS
performance measure.
All results derive from continuing
operations.
Consolidated Statement of
Financial Position
as at 31
March 2024
|
|
As at
31 March
2024
|
As at
31 March
2023
|
|
Note
|
£'000
|
£'000
|
Non-current
assets
|
|
|
|
Assets
|
|
|
|
Goodwill
and other intangibles
|
12
|
13,663
|
15,281
|
Property,
plant and equipment
|
13
|
21,416
|
20,815
|
Investments
|
14
|
-
|
7
|
Total non-current
assets
|
|
35,079
|
36,103
|
|
|
|
|
Current
assets
|
|
|
|
Inventories
|
16
|
24,434
|
25,606
|
Trade and
other receivables
|
17
|
35,626
|
20,899
|
Cash and
cash equivalents
|
18
|
11,631
|
7,536
|
Total current
assets
|
|
71,691
|
54,041
|
Total
assets
|
|
106,770
|
90,144
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
Borrowings
|
21
|
1,268
|
5,026
|
Trade and
other payables
|
19
|
27,303
|
26,117
|
Forward
contract derivative
|
24.5
|
52
|
652
|
Income
tax payable
|
|
5,068
|
2,536
|
Provisions
|
23
|
349
|
-
|
Total current
liabilities
|
|
34,040
|
34,331
|
Net current
assets
|
|
37,651
|
19,710
|
|
|
|
|
Borrowings
|
21
|
13,449
|
14,293
|
Deferred
tax liability
|
15
|
854
|
789
|
Provisions
|
23
|
452
|
775
|
Total non-current
liabilities
|
|
14,755
|
15,857
|
Total
liabilities
|
|
48,795
|
50,188
|
Net assets
|
|
57,975
|
39,956
|
|
|
|
|
Equity
|
|
|
|
Share
capital
|
25
|
11,652
|
11,732
|
Share
premium
|
|
7,435
|
7,427
|
Merger
reserve
|
|
(22,000)
|
(22,000)
|
Capital
redemption reserve
|
|
83
|
-
|
Share-based payments reserve
|
|
3,967
|
3,043
|
Retained
earnings
|
|
56,838
|
39,754
|
Total
equity
|
|
57,975
|
39,956
|
The notes are an integral part of
these financial statements.
The financial statements were
approved by the Board of Directors and authorised for issue on 1
July 2024, and were signed on its behalf by:
S
Smith
Director
Registered number: 05844527
Consolidated Statement of
Changes in Equity
for the
Year Ended 31 March 2024
|
Share
Capital
|
Share
Premium
|
Merger
reserve
|
Capital redemption
reserve
|
Share-based payments
reserve
|
Retained
earnings
|
Total
equity
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
As at 1 April
2022
|
11,663
|
7,231
|
(22,000)
|
-
|
2,368
|
33,050
|
32,312
|
|
|
|
|
|
|
|
|
Profit
for the year
|
-
|
-
|
-
|
-
|
-
|
11,968
|
11,968
|
Other
comprehensive income
|
-
|
-
|
-
|
-
|
-
|
101
|
101
|
Total
comprehensive income for the year
|
-
|
-
|
-
|
-
|
-
|
12,069
|
12,069
|
|
|
|
|
|
|
|
|
Transactions with
shareholders:
|
|
|
|
|
|
|
|
Issue of
shares (note 25)
|
69
|
196
|
-
|
-
|
-
|
-
|
265
|
Employee
share schemes - value of employee services (note 26)
|
-
|
-
|
-
|
-
|
1,283
|
-
|
1,283
|
Deferred
tax on share-based payment charge (note 15)
|
-
|
-
|
-
|
-
|
(608)
|
-
|
(608)
|
Dividends
(note 25)
|
-
|
-
|
-
|
-
|
-
|
(5,365)
|
(5,365)
|
|
69
|
196
|
-
|
-
|
675
|
(5,365)
|
(4,425)
|
As at 31 March
2023
|
11,732
|
7,427
|
(22,000)
|
-
|
3,043
|
39,754
|
39,956
|
|
|
|
|
|
|
|
|
Profit
for the year
|
-
|
-
|
-
|
-
|
-
|
22,426
|
22,426
|
Other
comprehensive expense
|
-
|
-
|
-
|
-
|
-
|
(1)
|
(1)
|
Total
comprehensive income for the year
|
-
|
-
|
-
|
-
|
-
|
22,425
|
22,425
|
|
|
|
|
|
|
|
|
Transactions with
shareholders:
|
|
|
|
|
|
|
|
Issue of
shares (note 25)
|
3
|
8
|
-
|
-
|
-
|
-
|
11
|
Share buy
back (note 25)
|
-
|
-
|
-
|
-
|
-
|
(1,000)
|
(1,000)
|
Cancellation of shares (note 25)
|
(83)
|
-
|
-
|
83
|
-
|
-
|
-
|
Employee
share schemes - value of employee services (note 26)
|
-
|
-
|
-
|
-
|
1,078
|
-
|
1,078
|
Deferred
tax on share-based payment charge (note 15)
|
-
|
-
|
-
|
-
|
(154)
|
-
|
(154)
|
Dividends
(note 25)
|
-
|
-
|
-
|
-
|
-
|
(4,341)
|
(4,341)
|
|
(80)
|
8
|
-
|
83
|
924
|
(5,341)
|
(4,406)
|
As at 31 March
2024
|
11,652
|
7,435
|
(22,000)
|
83
|
3,967
|
56,838
|
57,975
|
Consolidated Statement of
Cash Flows
for the
Year Ended 31 March 2024
|
|
Year Ended
31 March
2024
|
Year Ended
31 March
2023
|
|
Note
|
£'000
|
£'000
|
Net cash flow from operating
activities
|
|
|
|
Profit
for the year
|
|
22,426
|
11,968
|
Adjustments
for:
|
|
|
|
Amortisation of intangible assets
|
12
|
1,733
|
915
|
Depreciation of tangible assets
|
13
|
2,087
|
1,268
|
Depreciation of right of use assets
|
13
|
1,685
|
932
|
Finance
income
|
9
|
(147)
|
(25)
|
Finance
costs
|
9
|
1,990
|
982
|
Amortisation of capitalised finance costs
|
9
|
55
|
55
|
Income
tax expense
|
10
|
7,694
|
2,469
|
Gain on
disposal of intangible fixed assets
|
7
|
-
|
(2,787)
|
Loss on
disposal of tangible fixed assets
|
|
169
|
-
|
Movement
on forward foreign exchange contracts
|
24.5
|
(600)
|
1,119
|
Share
based payments expense
|
26
|
1,226
|
1,460
|
Working capital adjustments
(net of acquired on business combinations)
|
|
|
|
Impairment of investments
|
14
|
7
|
-
|
Decrease
in inventories
|
|
1,172
|
2,920
|
Increase
in trade and other receivables
|
|
(14,727)
|
(671)
|
Increase/(decrease) in trade and other payables
|
|
7,725
|
(27)
|
Increase
in provisions
|
|
26
|
349
|
Taxation
paid
|
|
(5,306)
|
(1,652)
|
Invoice
discounting fees
|
|
(147)
|
-
|
Net cash from
operations
|
|
27,068
|
19,275
|
Cash flows used in investing
activities
|
|
|
|
Purchase
of intangible fixed assets
|
12
|
(115)
|
(23)
|
Purchase
of property, plant and equipment
|
13
|
(5,322)
|
(1,254)
|
Purchase
of business combinations net of cash acquired
|
19
|
(2,470)
|
(10,055)
|
Proceeds
from sale of property, plant and equipment
|
|
115
|
1
|
Proceeds
from sale of intangible fixed assets
|
|
-
|
4,018
|
Payment
of deferred consideration
|
20
|
(2,187)
|
(270)
|
Payment
of contingent consideration
|
20
|
(1,451)
|
-
|
Finance
income received
|
|
147
|
25
|
Net cash used in investing
activities
|
|
(11,283)
|
(7,558)
|
Cash flows used in financing
activities
|
|
|
|
Repayment
of long term loans
|
21
|
-
|
(3,984)
|
Repayment
of related party loans
|
21
|
-
|
(1,779)
|
Repayments of RCF facility
|
21
|
(9,918)
|
(14,000)
|
Drawdowns
of RCF facility
|
21
|
5,500
|
18,418
|
Issue of
options or share capital
|
25
|
11
|
265
|
Share buy
back
|
25
|
(1,000)
|
-
|
Dividends
paid
|
25
|
(4,341)
|
(5,365)
|
Finance
costs paid
|
21
|
(559)
|
(776)
|
Facility
fees paid
|
9
|
(115)
|
-
|
Interest
paid on leases
|
21
|
(139)
|
(153)
|
Lease
payments
|
21
|
(1,062)
|
(834)
|
Net cash used in financing
activities
|
|
(11,623)
|
(8,208)
|
|
|
|
|
Net increase in cash and
cash equivalents
|
|
4,162
|
3,509
|
Cash and cash equivalents
brought forward
|
|
7,536
|
3,926
|
Effects
of exchange rate changes
|
|
(67)
|
101
|
Cash and cash equivalents
carried forward
|
|
11,631
|
7,536
|
|
|
|
|
Cash and
cash equivalents
|
18
|
11,631
|
7,536
|
|
|
11,631
|
7,536
|
Notes to the Group Financial Statements
for the Year Ended 31 March
2024
1. Basis of preparation
Supreme PLC ("the Company") is a
public company limited by shares, registered in England and Wales
and domiciled in the UK, with company registration number 05844527.
The principal activity is the manufacture (vaping and sports
nutrition & wellness only) and wholesale distribution of
batteries, lighting, vaping, sports nutrition & wellness and
branded distribution. The registered office is 4 Beacon Road,
Ashburton Park, Trafford Park, Manchester, M17 1AF.
The financial information set out
in this preliminary announcement does not constitute statutory
accounts as defined by section 434 of the Companies Act
2006.
These Group financial statements
have been prepared on a going concern basis under the historical
cost convention, modified for the revaluation of certain forward
contracts derivatives; in accordance with UK-adopted International
Accounting Standards and with the requirements of the Companies Act
2006 as applicable to companies reporting under those
standards.
The results of the year ended 31
March 2024 have been extracted from the full accounts of the Group
for that year which received an unqualified auditor's report and
which have not yet been delivered to the Registrar of
Companies. The financial information for the year ended 31
March 2023 is derived from the statutory accounts for that year,
which have been delivered to the Registrar of Companies. The report
of the auditor on those filed accounts was unqualified. The
accounts for the year ended 31 March 2024 and 2023 did not contain
a statement under S498 (1) and (4) of the Companies Act 2006.
The statutory accounts for the year ended 31 March will be posted
to shareholders at least 21 days before the Annual General Meeting
and made available on our website www.supreme.co.uk
and on request by contacting the Company
Secretary at the Company's registered office.
The Directors have prepared this
financial information on the fundamental assumption that the Group
is a going concern and will continue to trade for at least 12
months following the date of approval of the financial
information.
2. Summary of material accounting
policies
The principal accounting policies
adopted are set out below.
2.1 Basis of
consolidation
The consolidated financial
statements present the results of the Company and its own
subsidiaries as if they form a single entity. Intercompany
transactions and balances between Group companies are therefore
eliminated in full.
The Group financial statements
incorporate the results of business combinations using the
acquisition method. In the Consolidated Statement of Financial
Position, the acquiree's identifiable assets, liabilities and
contingent liabilities are initially recognised at their fair
values at the acquisition date. The results of acquired operations
are included in the Consolidated Statement of Comprehensive Income
from the date on which control is obtained. They are deconsolidated
from the date control ceases. The merger reserve arose on a past
business combination of entities that were under common
control. The merger reserve is the
difference between the cost of investment and the nominal value of
the share capital acquired.
2.2 New standards,
amendments and interpretations
New and amended standards
and adopted by the Group
The Group acknowledges the
following changes that have taken effect during this financial
year. Except for IAS 1, these amendments are either not applicable
or have only an immaterial impact on the Group:
Standards and interpretations
|
Effective from
|
IAS 1 Presentation of Financial
Statements (Amendment to Disclosure of Accounting
Policies);
|
1 April 2023
|
IAS 8 Accounting Policies, Changes
in Accounting Estimates and Errors (Amendment to the Definition of
Accounting Estimates);
|
1 April 2023
|
IAS 12 Income Taxes (Amendment to
Deferred Tax related to Assets and Liabilities Arising from a
Single Transaction);
|
1 April 2023
|
IAS 12 Taxes (Amendment to
International Tax Reform - Pillar Two Model Rules - effective
immediately upon the issue of the amendments and retrospectively);
and
|
1 April 2023
|
IFRS 17 Insurance
Contracts.
|
1 April 2023
|
New standards and
interpretations not yet adopted
There are a number of standards,
amendments to standards, and interpretations which have been issued
by the IASB that are effective in future accounting periods that
the Group has decided not to adopt early.
The Group is currently assessing
the impact of these new accounting standards and amendments. The
Group does not expect any standards issued by the IASB, but are yet
to be effective, to have a material impact on the Group.
Standards and interpretations
|
Effective from
|
IFRS 16 Leases (Amendment to
Liabilities in a Sale and Leaseback);
|
1 April 2024
|
IAS 1 Presentation of Financial
Statements (Amendment to Classification of Liabilities as Current
or Non-current);
|
1 April 2024
|
IAS 1 Presentation of Financial
Statements (Amendment to Non-current Liabilities with Covenants);
and
|
1 April 2024
|
IFRS 7 Financial Instruments:
Disclosures (Amendment to Supplier Finance
Arrangements).
|
1 April 2024
|
IAS 21 Transactions in Foreign
Currencies (Amendment to Lack of Exchangeability)
|
1 April 2025
|
IFRS 9 Financial Instruments
(Amendments to the Classification and Measurement of Financial
Instruments
|
1 April 2026
|
IFRS 18 Presentation and
Disclosure in Financial Statements
|
1 April 2027
|
IFRS 19 Subsidiaries without
Public Accountability: Disclosures
|
1 April 2027
|
Judgements made by the Directors
in the application of these accounting policies that have a
significant effect on these financial statements together with
estimates with a significant risk of material adjustment in the
next year are discussed in Note 3.
2.3 Going
concern
In assessing the appropriateness of
adopting the going concern basis in the preparation of these
financial statements, the Directors have prepared cash flow
forecasts and projections for the two-year period to 31 March 2026.
These forecasts and projections, which the Directors consider to be
prudent, have been further sensitised by applying general
reductions to revenue and profitability, to consider downside risk.
Under both the base and sensitised cases the Group is expected to
have headroom against covenants, which are based on interest cover
and net leverage, and a sufficient level of financial resources
available through existing facilities when the future funding
requirements of the Group are compared with the level of committed
available facilities. (The applicable covenants relate to the
RCF facility held by the group, and are required to be met, even
when this facility is not being utilised.) In addition to
these general sensitivities, the Directors have specifically also
considered the proposed changes to the regulatory landscape within
the vaping industry, the increased cost of borrowing and the
ongoing cost of living crisis taking place in the UK, all of which
have been reflected in this forecast.
· The
Directors have performed a specific sensitivity in reference to the
upcoming ban on disposables vapes (currently scheduled for 1 April
2025) in which a scenario where all the revenue currently
attributable to disposable vapes does not transition to an
alternative form of vaping has been assessed. The sensitivity
confirmed that without the sale of disposable vapes or a likely
substitute product in its place, the remaining Supreme group would
remain profitable and cash-generative and therefore this does not
pose a problem in respect of going concern.
· In
addition to the specific sensitivity on the disposable vape ban,
the Directors have also performed reverse stress-testing on the
cash flow forecasts to see how far revenue would be required to
decline before a banking covenant would breach or the Group would
run out of cash. This exercise highlighted that revenue would need
to fall by 47% (with the overhead base remaining in place entirely)
before a banking covenant would breach.
· Whilst the Group's debt facilities are priced at a variable
rate (SONIA + a margin) the Group's current positive leverage ratio
(i.e. having no bank borrowings with at the balance sheet date or
since then), means that Supreme's exposure to any increases in
borrowing rates is limited. Should the Group increase its level of
bank borrowings during the forecast period (likely to be triggered
by M&A) then of course this increased cost of borrowing would
impact the Group (albeit expected to be offset by the incremental
earnings generated by any M&A target).
· Historically Supreme has been a net beneficiary in periods of
economic downturn, owing to the fact more than half of its revenue
is derived from the discount retail sector which typically trades
buoyantly during these periods (for prudence this has not been
assumed in the forecast). The inflationary cost increases
(specifically over salary costs, energy and transport) have been
specifically factored into the cost base throughout for the
forecast period.
Based on this, the Directors are
satisfied that the Group has adequate resources to continue in
operational existence for the foreseeable future. For this reason,
they continue to adopt the going concern basis in preparing the
Group and Company financial statements.
2.4
Currencies
Functional and presentational currency
Items included in the Group
financial statements are measured using the currency of the primary
economic environment in which the Company operates ("the functional
currency") which is UK sterling (£). The Group financial statements
are presented in UK sterling.
Transactions and balances
Foreign currency transactions are
translated into the functional currency using a standard exchange
rate for a period if the rates do not fluctuate significantly.
Foreign exchange gains and losses resulting from the settlement of
such transactions and from the translation at year-end exchange
rates of monetary assets and liabilities denominated in foreign
currencies are recognised in the statement of comprehensive income.
Non-monetary items that are measured in terms of historical cost in
a foreign currency are not retranslated.
Group companies
The results and financial position
of foreign operations (none of which has the currency of a
hyper-inflationary economy) that have a functional currency
different from the presentation currency are translated into the
presentation currency as follows:
· assets and liabilities for each statement of financial
position presented are translated at the closing rate at the date
of that statement of financial position;
· income and expenses for each statement of comprehensive
income are translated at average exchange rates (unless this is not
a reasonable approximation of the cumulative effect of the rates
prevailing on the transaction dates, in which case income and
expenses are translated at the dates of the transactions);
and
· all
resulting exchange differences are recognised in other
comprehensive income.
2.5 Revenue
recognition
Revenue solely relates to the sale
of goods and arises from the wholesale distribution and online
sales of batteries, lighting, vaping sports nutrition &
wellness and branded distribution.
To determine whether to recognise
revenue, the Company follows the 5-step process as set out within
IFRS 15:
1.
Identifying the contract with a customer.
2.
Identifying the performance obligations.
3.
Determining the transaction price.
4.
Allocating the transaction price to the performance
obligations.
5.
Recognising revenue when/as performance obligation(s) are
satisfied.
Revenue is measured at transaction
price, stated net of VAT, and other sales related taxes. Rebates to
customers take the form of volume discounts, which are a type of
variable consideration, and the transaction price is constrained to
reflect the rebate element. The transaction price equates to the
invoice amount less an estimate of any applicable rebates and
promotional allowances that are due to the customer. Rebate
accruals are recognised under the terms of these agreements, to
reflect the expected promotional activity and our historical
experience. These accruals are reported within trade and other
payables.
Revenue is recognised at a point
in time as the Company satisfies performance obligations by
transferring the promised goods to its customers as described
below. At any point in time where such obligations haven't been met
but the customer has been invoiced, revenue is deferred, as
disclosed in note 19. Variable consideration, in the form of
rebates, is also recognised at the point of transfer, however the
estimate of variable consideration is constrained at this point and
released once it is highly probable there will not be a significant
reversal.
Contracts with customers take the
form of customer orders. There is one distinct performance
obligation, being the distribution of products to the customer, for
which the transaction price is clearly identified. Revenue is
recognised at a point in time when the Group satisfies performance
obligations by transferring the promised goods to its customers,
i.e. when control has passed from the Group to the customer, which
tends to be on receipt by the customer. In respect of certain
direct shipments control passes when an invoice is raised, payment
received, and title formally transferred to the customer; at which
point the customer has the risks and rewards of the
goods.
2.6
Goodwill
The carrying value of goodwill has
arisen following the acquisition of subsidiary entities.
Such goodwill is subject to an impairment review,
both annually and when there is an indication that the carrying
value may be impaired. Any impairment is recognised immediately in
the Statement of Comprehensive Income and is not
reversed.
2.7 Other intangible
assets
Other intangible assets that are
acquired by the Group are stated at cost less accumulated
amortisation and accumulated impairment losses.
The amortisation is charged on a
straight-line bases as follows:
Domain name - 10%
Trademarks - 10%
Customer relationships -
20%
Trade names - 20%
Know how - 10%
Computer software - 20%
2.8 Property, plant and
equipment
Property, plant and equipment are
stated at cost less accumulated depreciation and any impairment
losses. Cost includes the original purchase price of the asset and
the costs attributable to bringing the asset to its working
condition for its intended use. Depreciation is charged so as to
write off the costs of assets over their estimated useful lives, on
a straight-line basis starting from the month they are first used,
as follows:
Land - not depreciated
Assets under construction -
0%
Plant and machinery -
25%
Fixtures and fittings -
25%
Motor vehicles - 25%
Computer equipment -
33%
Buildings - 2%
The gain or loss arising on the
disposal of an asset is determined as the difference between the
sales proceeds and the carrying amount of the asset and is
recognised in the Statement of Comprehensive Income.
At each reporting date, the
Company reviews the carrying amounts of its property, plant and
equipment assets to determine whether there is any indication that
those assets have suffered an impairment loss. If any such
indication exists, the recoverable amount of the asset is estimated
in order to determine the extent of the impairment loss (if
any).
2.9
Inventories
Inventories are valued using a
first in, first out method and are stated at the lower of cost and
net realisable value. Cost includes expenditure incurred in the
normal course of business in bringing the products to their present
location and condition.
At the end of each reporting
period inventories are assessed for impairment. If an item of
inventory is impaired, the identified inventory is reduced to its
selling price less costs to complete and sell and an impairment
charge is recognised in the income statement. Where a reversal of
the impairment is recognised the impairment charge is reversed, up
to the original impairment loss, and is recognised as a credit in
the income statement.
2.10
Leases
The
Company applies IFRS 16 in the Group financial statements. At
inception of a contract, the Group assesses whether a contract is,
or contains, a lease. A contract is, or contains, a lease if the
contract conveys the right to control the use of an identified
asset for a period of time in exchange for
consideration.
The Group recognises a
right-of-use asset and a lease liability at the lease commencement
date. The right-of-use asset is initially measured at cost, which
comprises the initial amount of the lease liability adjusted for
any lease payments made at or before the commencement date, plus
any initial direct costs incurred and an estimate of costs to
restore the underlying asset, less any lease incentives
received.
The right-of-use asset is
subsequently depreciated using the straight-line method from the
commencement date to the earlier of the end of the useful life of
the right-of-use asset or the end of the lease term. In addition,
the right-of-use asset is periodically reduced by impairment
losses, if any, and adjusted for certain remeasurements of the
lease liabilities.
The lease liability is initially
measured at the present value of lease payments that were not paid
at the commencement date, discounted using the rate implicit in the
lease. Where there is no rate implicit in the lease then the
Group's incremental borrowing rate is used.
The lease liability is measured at
amortised cost using the effective interest method. If there is a
remeasurement of the lease liability, a corresponding adjustment is
made to the carrying amount of the right-of-use asset, or is
recorded directly in profit or loss if the carrying amount of the
right of use asset is zero.
Short term leases and low value assets
The Group has elected not to
recognise right-of-use assets and lease liabilities for short-term
lease of machinery that have a lease term of 12 months or less or
leases of low value assets. These lease payments are expensed on a
straight-line basis over the lease term.
2.11 Share based
payments
Where share options are awarded to
employees, the fair value of the options at the date of grant is
charged to profit or loss over the vesting period. Non-market
vesting conditions are taken into account by adjusting the number
of equity instruments expected to vest at each Statement of
Financial Position date so that, ultimately, the cumulative amount
recognised over the vesting period is based on the number of
options that eventually vest. Market vesting conditions are
factored into the fair value of the options granted. The cumulative
expense is not adjusted for failure to achieve a market vesting
condition.
The fair value of the award also
takes into account non-vesting conditions. These are either factors
beyond the control of either party (such as a target based on an
index) or factors which are within the control of one or other of
the parties (such as the Group keeping the scheme open or the
employee maintaining any contributions required by the
scheme).
Where the terms and conditions of
options are modified before they vest, the increase in the fair
value of the options, measured immediately before and after the
modification, is also charged to the Statement of Comprehensive
Income over the remaining vesting period.
Where
equity instruments are granted to persons other than employees, the
Statement of Comprehensive Income is charged with fair value of
goods and services received.
2.12 Segmental
reporting
The Directors consider there to be
one segment for reporting purposes because although revenue is
grouped within five product categories, as the directors analyse
revenue at this gross level, the directors do not analyse, monitor
or review the Groups KPIS (being adjusted EBITDA and profit before
tax) by product category. Due to this, the Group do not believe
there are any IFRS 8 considerations around the requirement to
report operating segments for reporting purposes.
2.13 Adjusted
items
The Company's income statement
separately identifies Adjusted items. Such items are those that in
the Directors' judgement need to be disclosed separately by virtue
of either: their volatility year-on-year; their one-off nature;
their size, their non-operating nature; or because the adjustment
of a particular item is widely accepted and conducted by peers (to
ensure comparability with other listed businesses). These may
include, but are not limited to, professional fees and other costs
directly related to refinancing, acquisitions and capital
transactions, fair value movements on open forward contracts, share
based payment charges, material impairments of inventories and
gains/losses on disposal of intangible assets. In determining
whether an item should be disclosed as an Adjusted item, the
Directors consider quantitative and qualitative factors such as the
frequency, predictability of occurrence and significance. This is
consistent with the way financial performance is measured by
management and reported to the Board.
2.14 Financial
instruments
Financial assets and financial
liabilities are recognised in the Group Statement of Financial
Position when the Group becomes party to the contractual provisions
of the instrument. Financial assets are de-recognised when the
contractual rights to the cash flows from the financial asset
expire or when the contractual rights to those assets are
transferred. Financial liabilities are de-recognised when the
obligation specified in the contract is discharged, cancelled or
expired.
2.15 Trade and other
receivables
Trade and other receivables are
initially measured at transaction price less provisions for
expected credit losses. The Group applies the IFRS 9 simplified
approach to measuring expected credit losses which uses a lifetime
expected loss allowance. This lifetime expected credit losses is
used in cases where the credit risk on other receivables has
increased significantly since initial recognition. In cases where
the credit risk has not increased significantly, the Group measures
the loss allowance at an amount equal to the 12-month expected
credit loss. This assessment is performed on a collective basis
considering forward-looking information.
IFRS 9's impairment requirements
use forward-looking information to recognise expected credit losses
- the 'expected credit loss (ECL) model'.
Recognition of credit losses is
determined by considering a broad range of information when
assessing credit risk and measuring expected credit losses,
including past events, current conditions and reasonable and
supportable forecasts that affect the expected collectability of
the future cash flows of the instrument.
Measurement of the expected credit
losses is determined by a probability-weighted estimate of credit
losses over the expected life of the financial
instrument.
Credit Insurance is also in place
which also mitigates the credit risk in relation to the respective
customer. This insurance is applied to most accounts over £5,000
with exception of proforma accounts and accounts agreed by the CEO,
although some accounts are excluded from the credit insurance
having been assessed by the Board on a cost-benefit analysis -
these equate largely to the largest grocery retailers.
3. Critical accounting estimates and
judgements
The preparation of the Group
financial statements require management to make judgements and
estimates that affect the reported amounts of assets and
liabilities at each Statement of Financial Position date and the
reported amounts of revenue during the reporting periods. Actual
results could differ from these estimates. Information about such
judgements and estimations are contained in individual accounting
policies. The key judgements and sources of estimation uncertainty
that could cause an adjustment to be required to the carrying
amount of asset or liabilities within the next accounting period
are outlined below:
Accounting
estimates
3.1 Share-based
payments
Estimating fair value for
share-based payment transactions requires determination of the most
appropriate valuation model, which depends on the terms and
conditions of the grant. This estimate also requires determination
of the most appropriate inputs to the valuation model including the
expected life of the share option or appreciation right, volatility
and dividend yield and making assumptions about them. Options with
both market and non-market conditions are most impacted by these
estimates. The share options charge is subject to an assumption
about the number of options that will vest as a result of the
expected achievement of certain non-market conditions.
Accounting
judgements
3.2 Inventory
obsolescence
Management applies judgement in
determining whether certain inventory items are obsolete,
considering factors such as expiry dates and sales forecasts. Based
on these judgements, estimates are made regarding the recoverable
value of inventory, which could materially affect the financial
statements if these estimates are incorrect.
4. Revenue analysis
|
Batteries
|
Lighting
|
Vaping
|
Sports nutrition &
wellness
|
Branded
distribution
|
Year Ended
31 March
2024
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
|
|
|
|
|
|
Revenue
|
40,527
|
16,498
|
82,792
|
17,955
|
63,477
|
221,249
|
Cost of
sales
|
(34,975)
|
(10,010)
|
(46,742)
|
(12,813)
|
(54,288)
|
(158,828)
|
Gross profit before foreign
exchange
|
5,552
|
6,488
|
36,050
|
5,142
|
9,189
|
62,421
|
|
|
|
|
|
|
|
Foreign
exchange
|
|
|
|
|
|
1,112
|
Gross
Profit
|
|
|
|
|
|
63,533
|
|
|
|
|
|
|
|
|
Batteries
|
Lighting
|
Vaping
|
Sports nutrition &
wellness
|
Branded
distribution
|
Year Ended
31 March
2023
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
|
|
|
|
|
|
Revenue
|
39,533
|
15,426
|
76,098
|
16,748
|
7,807
|
155,612
|
Cost of
sales
|
(35,613)
|
(11,301)
|
(48,018)
|
(14,089)
|
(6,992)
|
(116,013)
|
Gross profit before foreign
exchange
|
3,920
|
4,125
|
28,080
|
2,659
|
815
|
39,599
|
|
|
|
|
|
|
|
Foreign
exchange
|
|
|
|
|
|
1,255
|
Gross
Profit
|
|
|
|
|
|
40,854
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Analysis of revenue by geographical
destination
|
Year Ended
31 March
2024
|
Year Ended
31 March
2023
|
|
£'000
|
£'000
|
United
Kingdom
|
206,858
|
140,713
|
Ireland
|
7,354
|
8,645
|
Netherlands
|
3,372
|
1,766
|
France
|
1,007
|
2,428
|
Rest of
Europe
|
1,123
|
942
|
Rest of
the World
|
1,535
|
1,118
|
|
221,249
|
155,612
|
The above revenues are all
generated from contracts with customers and are recognised at a
point in time. All assets of the Group reside in the UK except for
total net assets of £3,641,000 (2023: £3,192,000) held in
Europe.
5. Operating
segments
The Chief Operating Decision Maker
("CODM") has been identified as the Board of Directors. The
Board reviews the Group's Internal reporting in order to assess the
performance and allocate resources. The Board of Directors
deem the Group to be one operating segment because they do not
assess performance or allocate resources at a disaggregated
level.
Information about major customers
The Group has generated revenue
from individual customers that accounted for greater than 10% of
total revenue. The total revenue from each of these 3 customers
(2023: 3 customers) was £33,843,000, £25,027,000 and £21,151,000
(2023: £24,938,000, £19,364,000, and £16,045,000). These revenues
related to all divisions.
6. Expenses by
nature
|
|
|
|
Year Ended
31 March
2024
|
Year Ended
31 March
2023
|
|
£'000
|
£'000
|
The profit is stated after
charging/(crediting) expenses as follows:
|
|
|
Cost of
sales
|
|
|
Inventories recognised as an expense
|
142,833
|
103,129
|
Impairment of inventories
|
(347)
|
892
|
Direct
Labour (note 8)
|
5,103
|
3,551
|
Other
direct cost of sales
|
10,127
|
7,186
|
|
157,716
|
114,758
|
Administrative
expenses
|
|
|
Impairment of trade receivables
|
181
|
63
|
Wages and
salaries (note 8)
|
11,085
|
8,794
|
Establishment costs
|
3,306
|
2,142
|
Auditor's
remuneration for audit services
|
220
|
170
|
Selling,
professional and other expenses
|
10,625
|
10,293
|
Adjusted
items (note 7)
|
593
|
828
|
Depreciation of property, plant and equipment
|
2,087
|
1,268
|
Depreciation of right of use assets
|
1,685
|
932
|
Amortisation of intangible assets
|
1,733
|
915
|
|
31,515
|
25,405
|
Total
cost of sales and administrative expenses
|
189,231
|
140,163
|
During the year, Auditor's
remuneration in respect of non-audit services was £nil (2023:
£nil). During the year Auditor's remuneration in respect of the
parent company audit was £15,000 (2023: £15,000).
The group has revised the
presentation of the above disclosure to enhance clarity, allowing a
clearer understanding of the nature of expenses between cost of
sales and overheads. These changes have been applied
retrospectively, and the prior year comparatives have been
represented accordingly. The revision does not affect the overall
financial position or performance of the group.
7. Adjusted
items
|
Year Ended
31 March
2024
|
Year Ended
31 March
2023
|
|
£'000
|
£'000
|
Fair
value movements on forward contracts
|
(600)
|
1,119
|
Share
based payments charge (note 26)
|
1,226
|
1,460
|
Acquisition costs
|
703
|
1,036
|
Transaction costs
|
(736)
|
-
|
Profit on
disposal of intangible fixed assets
|
-
|
(2,787)
|
|
593
|
828
|
Fair value movements on forward contracts
The Group typically holds 1 years'
worth of USD-denominated purchases on open forward contracts. The
credit (2023: charge) in the year ended 31 March 2024 reflect the
movement in the fair value of these open forward contracts at the
balance sheet date. The movement is reported each year as Adjusted
due to its volatility. The liability at 31 March 2024 is £52,000
and is reported as 'forward contract derivative' in the statement
of financial position. This is a non-cash item and is not taxable
for corporation tax purposes. The
resulting tax impact is therefore £nil.
Share based payments charge
The Group operates a number of
share incentive arrangements as set out in Note 26. The aggregate
expense recognised in the year has been reported as an Adjusted
item in line with its treatment by other comparable businesses. The
charge is a non-cash item and was disallowable for corporation tax
purposes. The resulting tax impact is
therefore £nil.
Acquisition costs
Acquisition costs related to the
operational integrations that took place in the year ended 31 March
2024 of the businesses and assets acquired in the year ended 31
March 2023 (Liberty Flights Limited and Superdragon TCM Limited)
and in the year ended 31 March 2024 (Food IQ Limited). The
integration costs related largely to redundancy costs and fixed
asset (machinery) write-off costs that arose when the businesses'
operations were transferred to Manchester (Supreme's principal
operating site).
£83,000 of these costs were
reported within Accruals at year end.
Similarly, in 2023, the
acquisition costs related to the operational integration that took
place following the acquisition of Cuts Ice Limited and related
largely to redundancy costs that arose when the business'
operations were transferred to Manchester. These costs were paid in
the year.
Acquisition costs of this nature
were treated as allowable for the purpose of corporation tax and
the corporation tax impact was £176,000 in 2024 (25%) and £197,000
(19%) in 2023.
Transaction costs
Transaction costs related to the
release of the contingent consideration accrual that arose on the
acquisition of Liberty Flights Limited. The original estimate for
contingent consideration was £2.2 million, based on the performance
of the business during the 12 months immediately after the
acquisition. Only £1.4 million was paid and the remainder was
released. The release of this accrual is not taxable for
corporation tax purposes. The resulting tax impact is therefore
£nil.
Profit on disposal of intangible fixed
assets
In 2023, the profit on disposal of
the T-Juice brand represents the difference between the cost of
acquiring the brand (£1,231,000) and the proceeds on disposal
(£4,018,000). The disposal of the brand was deemed to be one-off in
nature and therefore reported as Adjusted.
8. Employees and
Directors
|
Year Ended
31 March
2024
|
Year Ended
31 March
2023
|
|
No.
|
No.
|
Monthly
average number of employees (including Directors):
|
|
|
Management and administration
|
104
|
116
|
Warehouse
|
89
|
70
|
Sales
|
44
|
46
|
Manufacturing
|
178
|
124
|
|
415
|
356
|
|
Year Ended
31 March
2024
|
Year Ended
31 March
2023
|
|
£'000
|
£'000
|
Aggregate
remuneration of staff (including Directors):
|
|
|
Wages and
salaries
|
15,018
|
10,670
|
Social
security costs
|
1,432
|
1,193
|
Other
pension costs
|
310
|
482
|
|
16,760
|
12,345
|
Amounts
classified as Adjusted Items
|
572
|
-
|
Amounts
recorded as cost of sales and Admin expenses
|
16,188
|
12,345
|
Directors'
remuneration
|
Year Ended
31 March
2024
|
Year Ended
31 March
2023
|
|
£'000
|
£'000
|
Directors' emoluments
|
1,157
|
600
|
Social
security costs
|
172
|
83
|
Company
contributions to defined contribution pension schemes
|
4
|
3
|
|
1,333
|
686
|
The highest paid director received
remuneration of £653,000 (2023: £232,000).
The value of the Company's
contributions paid to a defined contribution pension scheme in
respect of the highest paid director amounted to £1,000 (2023:
£1,000).
During the year, retirement
benefits were accruing to 3 directors (2023: 2) in respect of
defined contribution pension schemes.
9. Finance
(income)/costs
|
Year Ended
31 March
2024
|
Year Ended
31 March
2023
|
|
£'000
|
£'000
|
Finance
income
|
|
|
Bank
interest receivable
|
(147)
|
(25)
|
|
|
|
Finance
costs
|
|
|
Bank interest payable
|
602
|
828
|
Invoice discounting
fees
|
147
|
-
|
Unwind of discounting on deferred
consideration
|
245
|
-
|
Facility fees
|
115
|
-
|
Amortisation of capitalised
arrangement fees
|
55
|
55
|
Interest on lease
liabilities
|
881
|
154
|
|
2,045
|
1,037
|
10. Taxation
|
Year Ended
31 March
2024
|
Year Ended
31 March
2023
|
Current
tax
|
£'000
|
£'000
|
Current
year - UK corporation tax
|
7,560
|
2,967
|
Adjustments to tax charge in respect of prior
periods
|
175
|
-
|
Foreign
tax on income
|
48
|
-
|
Total current
tax
|
7,783
|
2,967
|
|
|
|
Deferred
tax
|
|
|
Origination and reversal of temporary differences
|
350
|
(566)
|
Adjustments to tax charge in respect of prior
periods
|
(439)
|
-
|
Adjustments to tax charge due to change in rates
|
-
|
68
|
Total deferred
tax
|
(89)
|
(498)
|
|
|
|
Total tax
expense
|
7,694
|
2,469
|
|
|
|
Equity
Items
|
|
|
Current
tax
|
-
|
-
|
Deferred
tax
|
(154)
|
(608)
|
Total deferred
tax
|
(154)
|
(608)
|
Factors affecting the
charge
|
Year Ended
31 March
2024
|
Year Ended
31 March
2023
|
|
£'000
|
£'000
|
Profit
before taxation
|
30,120
|
14,437
|
Tax at
the UK corporation tax rate of 25% (2023: 19%)
|
7,530
|
2,743
|
|
|
|
Effects
of expenses not deductible for tax purposes
|
531
|
123
|
Income
not taxable for tax purposes
|
(186)
|
-
|
Adjustments to tax charge due to change in rates
|
-
|
68
|
Adjustments to tax charge in respect of prior
periods
|
(264)
|
-
|
Exercise
of share options
|
-
|
(123)
|
Deferred
tax on Share Based Payments
|
83
|
(118)
|
Enhanced
Relief
|
-
|
(224)
|
Total tax
expense
|
7,694
|
2,469
|
Factors that may affect
future tax charges
In the Spring Budget 2021, the
Government announced that from 1 April 2024 the corporation tax
rate will increase to 25% rather than remaining at 19% as
previously enacted. This new law was substantively enacted on 24
May 2021 and the impact of this rate change has been considered
when recognising deferred tax in these financial statements. Where
the asset or liability is expected to unwind after 1 April 2024 the
deferred tax has been recognised at 25% in these financial
statements. In the Autumn Statement in November 2022, the
government confirmed the increase in corporation tax rate to 25%
from April 2024 will go ahead.
11. Earnings per
share
Basic earnings per share is
calculated by dividing the net income for the year attributable to
ordinary equity holders after tax by the weighted average number of
ordinary shares outstanding during the year.
Diluted earnings per share is
calculated with reference to the weighted average number of shares
adjusted for the impact of dilutive instruments in issue. For the
purposes of this calculation an estimate has been made for the
share price in order to calculate the number of dilutive share
options.
The basic and diluted calculations
are based on the following:
Statutory
EPS
|
Year Ended
31 March
2024
|
Year Ended
31 March
2023
|
|
£'000
|
£'000
|
Profit
for the year after tax
|
22,426
|
11,968
|
|
|
|
|
No.
|
No.
|
Weighted
average number of shares for the purposes of basic earnings per
share
|
117,237,891
|
116,731,311
|
Weighted
average dilutive effect of conditional share awards
|
6,455,776
|
6,720,523
|
Weighted
average number of shares for the purposes of diluted earnings per
share
|
123,693,667
|
123,451,834
|
|
|
|
|
Pence
|
Pence
|
Basic
earnings per share
|
19.1
|
10.3
|
Diluted
earnings per share
|
18.1
|
9.7
|
Adjusted
EPS
The calculation of adjusted
earnings per share is based on the after tax adjusted operating
profit after adding back certain costs as detailed in the table
below. Adjusted earnings per share figures are given to exclude the
effects of depreciation, amortisation and adjusted items, all net
of taxation, and are considered to show the underlying performance
of the Group.
|
Year Ended
31 March
2024
|
Year Ended
31 March
2023
|
|
£'000
|
£'000
|
Adjusted
earnings (see below)
|
24,459
|
13,790
|
|
|
|
|
No.
|
No.
|
Weighted
average number of shares for the purposes of basic earnings per
share
|
117,237,891
|
116,731,311
|
Weighted
average dilutive effect of conditional share awards
|
6,455,776
|
6,720,523
|
Weighted
average number of shares for the purposes of diluted earnings per
share
|
123,693,667
|
123,451,834
|
|
|
|
|
Pence
|
Pence
|
Adjusted
basic earnings per share
|
20.9
|
11.8
|
Adjusted
diluted earnings per share
|
19.8
|
11.2
|
The calculation of basic adjusted
earnings per share is based on the following data:
|
Year Ended
31 March
2024
|
Year Ended
31 March
2023
|
|
£'000
|
£'000
|
Profit for the year attributable
to equity shareholders
|
22,426
|
11,968
|
Add back/(deduct):
|
|
|
Amortisation of acquisition
related intangible assets
|
1,616
|
874
|
Adjusted items
|
593
|
828
|
Tax effect of the above
|
(176)
|
120
|
Adjusted earnings
|
24,459
|
13,790
|
12. Goodwill and other intangible
assets
|
Domain
name
£'000
|
Trademarks
£'000
|
Customer
relationships
£'000
|
Trade
names
£'000
|
Know how
£'000
|
Computer
software
£'000
|
Goodwill
£'000
|
Total
£'000
|
Cost
|
|
|
|
|
|
|
|
|
At 1
April 2022
|
249
|
1,501
|
760
|
221
|
-
|
18
|
1,602
|
4,351
|
Additions
|
-
|
-
|
-
|
-
|
-
|
23
|
-
|
23
|
On
acquisition
|
62
|
43
|
3,043
|
4,384
|
262
|
-
|
5,906
|
13,700
|
Disposals
|
-
|
-
|
-
|
(1,231)
|
-
|
-
|
-
|
(1,231)
|
At 31
March 2023
|
311
|
1,544
|
3,803
|
3,374
|
262
|
41
|
7,508
|
16,843
|
|
|
|
|
|
|
|
|
|
Additions
|
-
|
-
|
-
|
-
|
-
|
115
|
-
|
115
|
At 31
March 2024
|
311
|
1,544
|
3,803
|
3,374
|
262
|
156
|
7,508
|
16,958
|
|
|
|
|
|
|
|
|
|
Accumulated
amortisation
|
|
|
|
|
|
|
|
|
At 1
April 2022
|
75
|
166
|
311
|
88
|
-
|
7
|
-
|
647
|
Amortisation charged in the year
|
25
|
150
|
359
|
359
|
6
|
16
|
-
|
915
|
At 31
March 2023
|
100
|
316
|
670
|
447
|
6
|
23
|
-
|
1,562
|
|
|
|
|
|
|
|
|
|
Amortisation charged in the year
|
87
|
154
|
761
|
675
|
26
|
30
|
-
|
1,733
|
At 31
March 2024
|
187
|
470
|
1,431
|
1,122
|
32
|
53
|
-
|
3,295
|
|
|
|
|
|
|
|
|
|
Carrying
amount
|
|
|
|
|
|
|
|
|
At 1
April 2022
|
174
|
1,335
|
449
|
133
|
-
|
11
|
1,602
|
3,704
|
At 31
March 2023
|
211
|
1,228
|
3,133
|
2,927
|
256
|
18
|
7,508
|
15,281
|
At 31
March 2024
|
124
|
1,074
|
2,372
|
2,252
|
230
|
103
|
7,508
|
13,663
|
The amortisation charge for the
year has been included in Administrative expenses in the Statement
of Comprehensive Income.
Individually material intangible assets
The individually material
intangible assets at the year end are summarised below:
Intangible asset
name
|
Asset
category
|
Net book value at year
end
£'000
|
Remaining amortisation
period
Years
|
Description
|
Sci-MX
trademark
|
Trademarks
|
1,005
|
7
|
The Sci-MX
trademark was acquired in FY22 from the administrators of Sci-MX
Nutrition Limited.
|
Liberty
Flights customer relationships
|
Customer
relationships
|
1,420
|
3
|
These
customer relationships were acquired in FY23 as part of the
acquisition of Liberty Flights.
|
Liberty
Flights trade name
|
Trade
names
|
2,207
|
3
|
This trade
name was acquired in FY23 as part of the acquisition of Liberty
Flights.
|
The individually material
intangible assets at the prior year end are summarised
below:
Intangible asset
name
|
Asset
category
|
Net book value at year
end
£'000
|
Remaining amortisation
period
Years
|
Description
|
Sci-MX
trademark
|
Trademarks
|
1,149
|
8
|
The Sci-MX
trademark was acquired in FY22 from the administrators of Sci-MX
Nutrition Limited.
|
Liberty
Flights customer relationships
|
Customer
relationships
|
1,825
|
4
|
These
customer relationships were acquired in FY23 as part of the
acquisition of Liberty Flights.
|
Liberty
Flights trade name
|
Trade
names
|
2,838
|
4
|
This trade
name was acquired in FY23 as part of the acquisition of Liberty
Flights.
|
Superdragon customer relationships
|
Customer
relationships
|
978
|
4
|
These
customer relationships were acquired in FY23 as part of the
acquisition of Superdragon.
|
Goodwill arises on acquisitions
where the fair value of the consideration given for the business
exceeds the fair value of the assets acquired and liabilities
assumed.
Following acquisition of a
business, the directors identify the individual Cash Generating
Units (CGUs) acquired and, where possible, allocate the underlying
assets acquired and liabilities assumed to each of those
CGUs.
In the prior year, the Board
concluded that its CGUs were Supreme Imports Limited, Vendek
Limited and Liberty Flights Limited as these were the smallest
groups of assets that generated cash inflows that were largely
independent of the cash inflows from other assets. As no goodwill
arose as a result of the acquisition or subsequent performance of
Vendek then Vendek was not deemed a required CGU for the purpose of
the annual test for impairment of goodwill. Therefore, the
resulting CGUs in the prior year were Supreme Imports Limited and
Liberty Flights Limited.
In the current year, owing to the
hive up of Liberty Flights' operations in Supreme Imports Limited,
the Board no longer deemed that Liberty Flights was a viable CGU as
its cashflows were no longer separately identifiable.
Therefore the only remaining viable CGU for the purpose of the
annual test for impairment of goodwill was Supreme
Imports.
|
As at
31 March
2024
|
As at
31 March
2023
|
|
£'000
|
£'000
|
Supreme
|
7,508
|
3,364
|
Liberty
Flights
|
-
|
4,144
|
|
7,508
|
7,508
|
The key assumptions for the value
in use calculations are:
· cash
flows before income taxes are based on approved budgets and prior
experience and management projections for the next 3
years;
· a
long term growth rate of 2.0% (2023: 2.0%) for the period beyond
which detailed budgets and forecasts do not exist; based on
external sources of macroeconomic projections for the geographies
in which the entity operates; and
· a
post tax discount rate of 10.6% (2023: 10.4%) based upon risk free
rate for government bonds adjusted for a risk premium to reflect
increased risk of investing in equities and investing in the
Group's specific sector and regions.
· a
pre tax discount rate of 13.6% based upon risk free rate for
government bonds adjusted for a risk premium to reflect increased
risk of investing in equities and investing in the Group's specific
sector and regions
Impairment testing of goodwill is
performed at least annually by reference to value in use
calculations which management consider to be in line with the
requirements of IAS 36. These calculations show no reasonably
possible scenario in which any of the goodwill balances could be
impaired as at 31 March 2024 or 31 March 2023. There were
no charges for
impairment of goodwill in 2024 (2023: nil).
Sensitivity to goodwill impairment
Management has applied
sensitivities to the key assumptions, including discount rates and
growth rates and believes there are no reasonably possible
scenarios which would result in an impairment of
goodwill.
Supreme Imports Limited
|
Discount
rate
Change in value in
use
£'000
|
Long term growth
rate
Change in value in
use
£'000
|
Used in the value in use
model
|
13.6%
|
2%
|
Value in use
|
246,884
|
246,884
|
1% increase
|
228,603
|
265,311
|
1% decrease
|
268,095
|
231,382
|
13. Property, plant and
equipment
|
Buildings
£'000
|
Plant and
machinery
£'000
|
Fixtures
and
fittings
£'000
|
Motor
vehicles
£'000
|
Computer
equipment
£'000
|
Leasehold
improvements
£'000
|
Assets under
construction
£'000
|
Right of use
assets
|
Total
£'000
|
Cost or
valuation
|
|
|
|
|
|
|
|
|
|
At 1
April 2022
|
-
|
6,139
|
993
|
287
|
336
|
-
|
-
|
5,078
|
12,833
|
Additions
|
57
|
724
|
66
|
111
|
340
|
-
|
686
|
14,393
|
16,377
|
On
acquisition
|
1,492
|
423
|
33
|
7
|
11
|
-
|
-
|
-
|
1,966
|
Disposals
|
-
|
-
|
-
|
(28)
|
-
|
-
|
-
|
-
|
(28)
|
At 31
March 2023
|
1,549
|
7,286
|
1,092
|
377
|
687
|
-
|
686
|
19,471
|
31,148
|
|
|
|
|
|
|
|
|
|
|
Additions
|
-
|
1,000
|
59
|
138
|
155
|
3,280
|
-
|
25
|
4,657
|
Disposals
|
-
|
(1,470)
|
(845)
|
(82)
|
(82)
|
-
|
-
|
-
|
(2,479)
|
Transfers
|
(57)
|
-
|
-
|
-
|
-
|
743
|
(686)
|
-
|
-
|
At 31
March 2024
|
1,492
|
6,816
|
306
|
433
|
760
|
4,023
|
-
|
19,496
|
33,326
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
impairment
|
|
|
|
|
|
|
|
|
|
At 1
April 2022
|
-
|
4,182
|
822
|
91
|
103
|
-
|
-
|
2,962
|
8,160
|
Depreciation charged in the year
|
-
|
949
|
63
|
51
|
205
|
-
|
-
|
932
|
2,200
|
Eliminated on disposal
|
-
|
-
|
-
|
(27)
|
-
|
-
|
-
|
-
|
(27)
|
At 31
March 2023
|
-
|
5,131
|
885
|
115
|
308
|
-
|
-
|
3,894
|
10,333
|
|
|
|
|
|
|
|
|
|
|
Depreciation charged in the year
|
-
|
1,036
|
70
|
57
|
269
|
655
|
-
|
1,685
|
3,772
|
Eliminated on disposal
|
-
|
(1,244)
|
(819)
|
(56)
|
(76)
|
-
|
-
|
-
|
(2,195)
|
At 31
March 2024
|
-
|
4,923
|
136
|
116
|
501
|
655
|
-
|
5,579
|
11,910
|
|
|
|
|
|
|
|
|
|
|
Carrying
amount
|
|
|
|
|
|
|
|
|
|
At 1
April 2022
|
-
|
1,957
|
171
|
196
|
233
|
-
|
-
|
2,116
|
4.673
|
At 31
March 2023
|
1,549
|
2,155
|
207
|
262
|
379
|
-
|
686
|
15,577
|
20,815
|
At 31
March 2024
|
1,492
|
1,893
|
170
|
317
|
259
|
3,368
|
-
|
13,917
|
21,416
|
The depreciation charge for the
year has been included in Administrative expenses in the Statement
of Comprehensive Income.
Of the additions in the financial
year £5,322,000 (2023: £1,254,000) was paid during the year
including £730,000 of cash paid for additions recognised in the
prior year.
14. Investments
|
As at
31 March
2024
|
As at
31 March
2023
|
|
£'000
|
£'000
|
Balance
at the beginning of the year
|
7
|
7
|
Amounts
written off
|
(7)
|
-
|
Balance
at the end of the year
|
-
|
7
|
Investments held within Provider
Distribution, a company which was part of the group until its
dissolution were written off during the year as they were no longer
deemed to have a value to the group.
Audit exemption
statement
Under section 479A of the
Companies Act 2006, the Group is claiming exemption from audit for
the subsidiary companies listed below.
The parent undertaking, Supreme
plc, guarantees all outstanding liabilities to which the subsidiary
company is subject at the end of the financial year. The guarantee
is enforceable against the parent undertaking by any person to whom
the subsidiary company is liable in respect of those
liabilities.
|
Company
number
|
Liberty Flights Holdings
Limited
|
07137952
|
Liberty Flights Limited
|
07089691
|
15. Deferred tax
Deferred tax consists of the
following temporary differences
|
As at
31 March
2024
|
As at
31 March
2023
|
|
£'000
|
£'000
|
Share
based payments
|
778
|
1,016
|
Short
term temporary differences
|
390
|
-
|
Deferred tax
asset
|
1,168
|
1,016
|
|
|
|
Excess of
depreciation over taxable allowances
|
(687)
|
(550)
|
Short
term temporary differences
|
-
|
339
|
Tax
losses carried forward
|
-
|
(104)
|
Fixed
asset timing differences
|
(104)
|
-
|
Acquired
intangible assets
|
(1,231)
|
(1,490)
|
Deferred tax
liability
|
(2,022)
|
(1,805)
|
Net deferred tax
liability
|
(854)
|
(789)
|
Movement in deferred tax in
the year
|
As at
31 March
2024
|
As at
31 March
2023
|
|
£'000
|
£'000
|
Balance
at the beginning of the year
|
(789)
|
1,156
|
Credited
to profit or loss
|
89
|
498
|
Debited
to reserves
|
(154)
|
(608)
|
Arising
on business combination
|
-
|
(1,849)
|
Other
|
-
|
14
|
Balance
at the end of the year
|
(854)
|
(789)
|
The Directors consider that the
deferred tax assets in respect of temporary differences are
recoverable based on the forecast future taxable profits of
the Group. All deferred
tax arises within the UK.
16. Inventories
|
As at
31 March
2024
|
As at
31 March
2023
|
|
£'000
|
£'000
|
Goods for
resale
|
19,587
|
21,080
|
Raw
materials
|
4,847
|
4,526
|
|
24,434
|
25,606
|
The Directors believe that the
replacement value of inventories would not be materially different
than book value.
Inventories at 31 March 2024 are
stated after provisions for impairment of £1,076,000 (2023:
£1,492,000).
17. Trade and other
receivables
|
As at
31 March
2024
|
As at
31
March
2023
|
|
£'000
|
£'000
|
Trade
receivables not past due
|
19,352
|
15,748
|
Trade
receivables past due
|
9,613
|
3,007
|
Provision
for expected credit losses
|
(262)
|
(189)
|
Total
trade receivables
|
28,703
|
18,566
|
Other
receivables
|
5,377
|
1,507
|
Prepayments
|
1,546
|
826
|
|
35,626
|
20,899
|
Currency analysis
|
As at
31 March
2024
|
As at
31
March
2023
|
|
£'000
|
£'000
|
Sterling
|
28,670
|
19,348
|
Euro
|
1,309
|
292
|
US
Dollar
|
5,647
|
1,259
|
|
35,626
|
20,899
|
The Directors believe that the
carrying value of trade and other receivables represents their fair
value. Trade and other receivables are considered past due once
they have passed their contracted due date. Trade and other
receivables are assessed for impairment based upon the expected
credit loss model.
The movement in provisions for
impairment are shown below:
|
Year Ended
31 March
2024
|
Year Ended
31 March
2023
|
|
£'000
|
£'000
|
Balance at the beginning of the
year
|
189
|
32
|
Charged to the statement of
comprehensive income
|
181
|
63
|
Arising on acquisition
|
-
|
111
|
Utilisation of
provision
|
(108)
|
(17)
|
Balance at the end of the
year
|
262
|
189
|
The Group's customer base is
predominantly made up of high-quality organisations with a high
credit rating. In order to manage credit risk, the Directors set
limits for customers based on a combination of payment history and
third-party credit references. Credit limits are reviewed on a
regular basis in conjunction with debt ageing and collection
history. The maturity analysis of trade receivables is analysed
below.
Ageing of trade
receivables
31 March 2024
|
Current
|
31 - 60
days
|
61 - 90
days
|
90 days +
|
Total
|
Expected loss rate
|
0%
|
0%
|
0%
|
61%
|
|
Gross trade receivables
|
14,238
|
13,170
|
1,208
|
349
|
28,965
|
Loss allowance
|
-
|
-
|
-
|
(262)
|
(262)
|
Net trade receivables
|
14,238
|
13,170
|
1,208
|
87
|
28,703
|
31 March 2023
|
Current
|
31 - 60
days
|
61 - 90
days
|
90 days +
|
Total
|
Expected loss rate
|
0%
|
0%
|
8%
|
100%
|
|
Gross trade receivables
|
11,936
|
5,253
|
1,492
|
74
|
18,755
|
Loss allowance
|
-
|
-
|
(115)
|
(74)
|
(189)
|
Net trade receivables
|
11,936
|
5,253
|
1,377
|
-
|
18,566
|
In determining the recoverability
of a trade receivable, the Group
considers any change in the credit quality of the
trade receivable from the date credit was initially granted up to
the reporting date, taking into account the extent of credit
insurance held on the receivable. The Group uses IFRS 9's
simplified approach to measure the loss allowance at an amount
equal to lifetime expected credit losses for trade receivables. The
concentration of credit risk is limited due to the customer base
being large and unrelated. Accordingly, the Directors believe that
no further credit provision is required in excess of the provision
for impairment of receivables.
Details on the Group's credit risk management policies are
shown in Note 24. The Group does not hold
any collateral as security for its trade and other
receivables.
18. Cash and cash
equivalents
|
As at
31
March
2024
|
As at
31
March
2023
|
|
£'000
|
£'000
|
Cash and
cash equivalents
|
11,631
|
7,536
|
Currency analysis
|
As at
31 March
2024
|
As at
31
March
2023
|
|
£'000
|
£'000
|
Sterling
|
10,119
|
7,025
|
Euro
|
1,421
|
453
|
US
Dollar
|
91
|
58
|
|
11,631
|
7,536
|
19. Trade and other
payables
|
As at
31 March
2024
|
As at
31
March
2023
|
|
£'000
|
£'000
|
Trade
payables
|
9,676
|
8,697
|
Accruals
|
10,673
|
5,651
|
Deferred
income
|
-
|
259
|
Other
creditors
|
525
|
3,415
|
Other tax
and social security
|
6,427
|
3,951
|
Deferred
consideration (note 20)
|
-
|
1,942
|
Contingent consideration (note 20)
|
-
|
2,200
|
Directors
loan account
|
2
|
2
|
|
27,303
|
26,117
|
Currency analysis
|
As at
31 March
2024
|
As at
31
March
2023
|
|
£'000
|
£'000
|
Sterling
|
25,702
|
23,953
|
Euro
|
1,337
|
760
|
US
Dollar
|
264
|
1,404
|
|
27,303
|
26,117
|
Trade payables principally consist
of amounts outstanding for trade purchases and ongoing costs. They
are non-interest bearing and are normally settled on 30 to 60 day
terms.
The Directors consider that the
carrying value of trade and other payables approximates their fair
value. Supreme PLC has financial risk management policies in place
to ensure that all payables are paid within the credit timeframe
and no interest has been charged by any suppliers as a result of
late payment of invoices during the period.
At 31 March 2023, £2,470,000 was
included within Other creditors in respect of the Superdragon
consideration. This was paid in full in the year.
20. Deferred and
contingent consideration
|
Acquisition
of
Superdragon
£'000
|
Acquisition of Liberty
Flights £'000
|
Grand
Total
£'000
|
Balance at 31 March
2023
|
|
|
|
Deferred
consideration
|
187
|
1,755
|
1,942
|
Contingent consideration
|
-
|
2,200
|
2,200
|
Balance
at 31 March 2023
|
187
|
3,955
|
4,142
|
|
|
|
|
Movements during the
year
|
|
|
|
Payment
of deferred consideration
|
(187)
|
(2,000)
|
(2,187)
|
Payment
of contingent consideration
|
-
|
(1,451)
|
(1,451)
|
Unwind of
discount
|
-
|
245
|
245
|
Credited
to the Income Statement
|
-
|
(749)
|
(749)
|
Balance
at 31 March 2024
|
-
|
-
|
-
|
21. Borrowings
|
As at
31 March
2024
|
As at
31 March
2023
|
|
£'000
|
£'000
|
Current
|
|
|
Bank
loans
|
-
|
4,307
|
Lease
liabilities (note 22)
|
1,268
|
719
|
|
1,268
|
5,026
|
|
|
|
Non-current
|
|
|
Lease
liabilities (note 22)
|
13,449
|
14,293
|
|
13,449
|
14,293
|
|
|
|
Total
borrowings
|
14,717
|
19,319
|
The earliest that the lenders of
the above borrowings require repayment is as follows:
|
As at
31 March
2024
|
As at
31 March
2023
|
|
£'000
|
£'000
|
In less
than one year
|
1,268
|
5,026
|
Between
two and five years
|
7,095
|
6,980
|
In more
than five years
|
6,354
|
7,313
|
|
14,717
|
19,319
|
These amounts when presented gross
on an undiscounted basis are as follows:
|
As at
31 March
2024
|
As at
31 March
2023
|
|
£'000
|
£'000
|
In less
than one year
|
2,189
|
5,499
|
Between
two and five years
|
6,867
|
7,699
|
In more
than five years
|
11,725
|
13,065
|
|
20,781
|
26,263
|
The Group is funded by revolving
credit facility ("RCF") of £25 million provided by HSBC that is
secured by way of a fixed and floating charge over all assets with
a further £10 million (Accordion) facility pre-agreed and available
on request. Interest is charged at a margin of 2.3% over SONIA for
all drawn amounts and 35% of the margin for undrawn amounts. The
facility is for 3 years and expires 31 March 2025 and HSBC have
already indicated their interest and support of Supreme to renew
this facility. There are 2 principal covenants attached to the RCF
and these are tested quarterly.
Current bank facilities include an
invoice discounting facility of £20 million, which is secured by an
assignment of, and fixed charge over the trade debtors of Supreme
Imports Limited. The facility was not drawn down at year end (2023:
undrawn).
Therefore undrawn but committed
facilities at 31 March 2024 were £35 million for the RCF (2023:
£20.7 million) and £20 million for the invoice discounting facility
(2023: £8.5 million).
Net cash disclosure
|
As at
31 March
2024
|
As at
31 March
2023
|
|
£'000
|
£'000
|
Cash and cash
equivalents
|
11,631
|
7,536
|
Total borrowings
|
(14,717)
|
(19,319)
|
Net Cash position
|
(3,086)
|
(11,783)
|
21. Borrowings
Net debt analysis
|
|
Cash flows
|
Non-cash
movements
|
|
|
Net debt as
at 1 April 2022
|
Payments
|
Drawdowns
|
Interest payments
|
Arising on acquisition
|
New leases
|
Foreign exchange adjustments
|
Interest expense
|
Movement
on loan costs
|
Non current to current movement
|
Net debt as
at 31 March 2023
|
Long term loan - current
|
(3,984)
|
3,984
|
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Long term loan - non current
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
RCF
- non current
|
-
|
14,000
|
(18,418)
|
776
|
-
|
-
|
-
|
(883)
|
218
|
-
|
(4,307)
|
Leases - current
|
(902)
|
834
|
-
|
7
|
-
|
(647)
|
-
|
(7)
|
-
|
(4)
|
(719)
|
Leases - non current
|
(1,294)
|
-
|
-
|
146
|
-
|
(13,003)
|
-
|
(146)
|
-
|
4
|
(14,293)
|
Amount owed to related parties - current
|
(1,779)
|
1,779
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Sub-total
|
(7,959)
|
20,597
|
(18,418)
|
929
|
-
|
(13,650)
|
-
|
(1,036)
|
218
|
-
|
(19,319)
|
Cash and cash
equivalents
|
3,926
|
1,643
|
-
|
-
|
1,866
|
-
|
101
|
-
|
-
|
-
|
7,536
|
Total
|
(4,033)
|
22,240
|
(18,418)
|
929
|
1,866
|
(13,650)
|
101
|
(1,036)
|
218
|
-
|
(11,783)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows
|
Non-cash
movements
|
|
|
Net debt as
at 1 April 2023
|
Payments
|
Drawdowns
|
Interest payments
|
Arising on acquisition
|
New leases
|
Foreign exchange adjustments
|
Interest expense
|
Movement
on loan costs
|
Non current to current movement
|
Net debt as
at 31 March 2024
|
RCF
- non current
|
(4,307)
|
9,918
|
(5,500)
|
559
|
-
|
-
|
-
|
(602)
|
(68)
|
-
|
-
|
Leases - current
|
(719)
|
1,062
|
-
|
76
|
-
|
(7)
|
-
|
(76)
|
-
|
(1,604)
|
(1,268)
|
Leases - non current
|
(14,293)
|
-
|
-
|
63
|
-
|
(18)
|
-
|
(805)
|
-
|
1,604
|
(13,449)
|
Sub-total
|
(19,319)
|
10,980
|
(5,500)
|
698
|
-
|
(25)
|
-
|
(1,483)
|
(68)
|
-
|
(14,717)
|
Cash and cash
equivalents
|
7,536
|
4,162
|
-
|
-
|
-
|
-
|
(67)
|
-
|
-
|
-
|
11,631
|
Total
|
(11,783)
|
15,142
|
(5,500)
|
698
|
-
|
(25)
|
(67)
|
(1,483)
|
(68)
|
-
|
(3,086)
|
22. Leases
The group leases buildings and
cars. Rental contracts are typically made for fixed periods of 3 to
5 years. There are no judgements over the length of the lease term
for any of the Group's leases. There are no variable lease payments
in any of the Group's leases.
The lease payments are discounted
using the interest rate implicit in the lease. If that rate cannot
be readily determined, which is generally the case for leases of
the Group, the incremental borrowing rate is used, being the rate
that the Group would have to pay to borrow the funds necessary to
obtain an asset of similar value to the right-of-use asset in a
similar economic environment with similar terms, security and
conditions.
Amounts recognised in the
Statement of Financial Position
The balance sheet shows the
following amounts relating to leases:
Right-of-use assets
|
£'000
|
At 1 April 2022
|
2,116
|
Additions
|
12,656
|
Lease modification
|
1,737
|
Depreciation charge for the
year
|
(932)
|
At 31 March 2023
|
15,577
|
Additions
|
25
|
Depreciation charge for the
year
|
(1,685)
|
At
31 March 2024
|
13,917
|
The net book value of the right of
use assets is made up as follows:
|
As at
31 March
2024
|
As at
31 March
2023
|
|
£'000
|
£'000
|
Buildings
|
13,899
|
15,576
|
Cars
|
18
|
1
|
|
13,917
|
15,577
|
Lease liabilities
|
As at
31 March
2024
|
As at
31 March
2023
|
|
£'000
|
£'000
|
Maturity analysis - contractual
undiscounted cash flows
|
|
|
Less than one year
|
2,189
|
1,192
|
More than one year, less than two
years
|
2,129
|
2,181
|
More than two years, less than
three years
|
1,715
|
2,121
|
More than three years, less than
four years
|
1,683
|
1,714
|
More than four years, less than
five years
|
1,340
|
1,683
|
More than five years
|
11,725
|
13,065
|
Total undiscounted lease
liabilities at year end
|
20,781
|
21,956
|
Finance costs
|
(6,064)
|
(6,944)
|
Total discounted lease liabilities
at year end
|
14,717
|
15,012
|
|
|
|
Lease liabilities included in the
statement of financial position
|
|
|
Current
|
1,268
|
719
|
Non-current
|
13,449
|
14,293
|
|
14,717
|
15,012
|
Amounts recognised in the
Consolidated Statement of Comprehensive Income
The Consolidated Statement of
Comprehensive Income shows the following amounts relating to
leases:
|
Year Ended
31 March
2024
|
Year Ended
31 March
2023
|
|
£'000
|
£'000
|
Depreciation charge -
Buildings
|
1,677
|
925
|
Depreciation charge -
Cars
|
8
|
7
|
|
1,685
|
932
|
|
|
|
Interest expense (within finance
expense)
|
881
|
154
|
There are no restrictions or
covenants imposed by leases and there have been no sale and
leaseback transactions.
Any
expense for short-term and low-value leases is not material and has
not been presented.
23. Provisions
|
As at
31 March
2024
|
As at
31 March
2023
|
|
£'000
|
£'000
|
Dilapidations provision related to right-of-use
assets
|
|
|
At 1 April
|
775
|
-
|
Additions
|
-
|
774
|
Unwind of discounting
|
26
|
1
|
At 31 March
|
801
|
775
|
|
|
|
Provisions included in the
statement of financial position
|
|
|
Current
|
349
|
-
|
Non-current
|
452
|
775
|
|
801
|
775
|
24. Financial
instruments
The Group
is exposed to the risks that arise from its financial instruments.
The policies for managing those risks and the methods to measure
them are described in Note 2. Further quantitative information in
respect of these risks is presented below and throughout these
Group financial statements.
24.1 Capital
risk management
The Group's objectives when managing
capital are to:
•
safeguard their ability to continue as a going
concern, so that they can continue to provide returns for
shareholders and benefits for other stakeholders; and
•
maintain an optimal capital structure to reduce
the cost of capital.
In order to maintain or adjust the
capital structure, the Group might adjust the amount of dividends
paid to shareholders, return capital to shareholders or issue new
shares.
The Group does not monitor capital
on a formal basis. However, the Group ensures that it operates
within the requirements of its loan covenants, which are designed
to ensure that sufficient capital is maintained. These covenants
are outlined below and the Group consistently meets these
requirements. Regular reviews of financial performance and position
are conducted by management to ensure ongoing compliance with these
covenants and to maintain financial flexibility.
Loan
covenants
Under the terms of the revolving
credit facility, which was undrawn at the year end (2023:
£4,307,000), the Group is required to comply with the following
financial covenants at the end of each quarter:
•
Interest cover - EBITDA to Net Finance Charges
will not be less than 4.0:1.
•
Leverage - Total Net Debt (RCF, IF & Trade
drawings less cash) to EBITDA will not exceed 2.5:1.
The Group has complied with these
covenants throughout the reporting period. There are no indications
that the entity may have difficulties complying with the covenants
in the next financial year.
24.2 Market
risk
Competitive pressures remain a
principal risk for the Group. The risk is
managed through focus on quality of product and service levels,
coupled with continuous development of new products to offer
uniqueness to the customer. Furthermore, the Group's focus on
offering its customers a branded product range provides some
protection to its competitive position in the market. Stock
obsolescence risk is managed through closely monitoring slow moving
lines and prompt action to manage such lines through the various
distribution channels available to the Group.
In addition, the
Group's operations expose it to a variety of
financial risks that include price risk, credit risk, liquidity
risk, foreign currency risk and interest rate cash flow risk. The
Group has in place a risk management programme that seeks to limit
the adverse effects on the financial performance of the Group by
regularly monitoring the financial risks referred to
above.
Given the size of the
Group, the Directors have not delegated the
responsibility of monitoring financial risk management to a
sub-committee of the board. The policies set by the Board are
implemented by the Group's finance department.
24.3 Credit
risk
The Group's sales are primarily
made with credit terms of between 0 and 30 days, exposing the Group
to the risk of non-payment by customers. The Group has implemented
policies that require appropriate credit checks on potential
customers before sales are made. The amount of exposure to any
individual counterparty is subject to a limit, which is reassessed
regularly by the board. In addition, the Group maintains a suitable
level of credit insurance against its debtor book. The maximum
exposure to credit risk is £5,000 per individual customer that is
covered by the policy, being the insurance excess.
The Group applies the IFRS 9
simplified approach to measuring expected credit losses using a
lifetime expected credit loss provision for trade receivables.
Expected losses are based on the Group's historical credit losses,
adjusted for current and forward-looking information on
macroeconomic factors affecting the Group's customers. The Group's
B2B historic credit losses have been minimal on the back of strong
credit control, in addition to the insurance cover in place. This
results in an immaterial expected credit loss being provided
for.
An analysis of past due but not
impaired trade receivables is given in Note 17.
24.4 Liquidity risk
management
The Group is funded by external
banking facilities provided by HSBC. Within these facilities,
the Group actively maintains a mixture of
long-term and short-term debt finance that is designed to ensure
the Group has sufficient available funds for operations and planned
expansions. This is monitored on a monthly basis, including
re-forecasts of the borrowings required.
24.5 Foreign currency risk
management
The Group's activities expose it
to the financial risks of changes in foreign currency exchange
rates. The Group's exposure to foreign currency risk is partially
hedged by virtue of invoicing a proportion of its turnover in US
Dollars. When necessary, the Group uses foreign exchange forward
contracts to further mitigate this exposure.
The following is a note of the
assets and liabilities denominated at each period end in US
dollars:
|
As at
31 March
2024
|
As at
31 March
2023
|
|
£'000
|
£'000
|
Trade
receivables
|
498
|
-
|
Cash and
cash equivalents
|
91
|
58
|
Trade
payables
|
(181)
|
1,154
|
|
408
|
1,212
|
The effect of a 20 percent
strengthening of Pound Sterling at 31 March 2024 on the foreign
denominated financial instruments carried at that date would, all
variables held constant, have resulted in a decrease to total
comprehensive income for the year and a decrease to net assets of
£68,000 (2023: £202,000). A 20 percent weakening of the exchange rate on the same
basis, would have resulted in an increase to total comprehensive
income and an increase to net assets of £102,000 (2023:
£303,000).
The following is a note of the
assets and liabilities denominated at each period end in
Euros:
|
As at
31 March
2024
|
As at
31 March
2023
|
|
£'000
|
£'000
|
Trade
receivables
|
1,215
|
200
|
Cash and
cash equivalents
|
1,421
|
453
|
Trade
payables
|
(771)
|
(364)
|
|
1,865
|
289
|
The effect of a 20 percent
strengthening of Pound Sterling at 31 March 2024 on the foreign
denominated financial instruments carried at that date would, all
variables held constant, have resulted in an increase to total
comprehensive income for the year and a decrease to net assets of
£311,000 (2023: decrease of £48,000). A 20 percent weakening of
the exchange rate on the same basis, would have resulted in a
decrease to total comprehensive income and an increase in net
assets of £466,000 (2023: increase of £73,000).
Forward contracts
The Group
mitigates the exchange rate risk for certain foreign currency
creditors by entering into forward currency contracts. The Group's
forex policy is to purchase forward contracts to mitigate changes
in spot rates, based on the timing of purchases to be made.
Management forecast the timing of purchases and make assumptions
relating to the exchange rate at which the Group costs its products
and take out forward contracts to mitigate fluctuations to an
acceptable level. At 31 March 2024, the outstanding contracts
mature between 1 and 12 months of the year end, (2023: 1 and 10 months). At 31
March 2024 the Group was committed to buy $30,000,000 (2023:
$32,500,000) in the next financial year.
The forward currency contracts are
measured at fair value using the relevant exchange rates for
GBP:USD and GBP:EUR. The fair value of the contracts at 31 March
2024 is a liability of £52,000 (2023: liability of £652,000).
During the year ended 31 March 2024, a gain of £600,000 (2023: loss
of £1,119,000)
was recognised Adjusted items for changes in the fair value of the
forward foreign currency contracts.
Forward currency contracts are
valued using level 2 inputs. The valuations are calculated using
the year end exchange rates for the relevant currencies which are
observable quoted values at the year-end dates. Valuations are
determined using the hypothetical derivative method which values
the contracts based on the changes in the future cashflows based on
the change in value of the underlying derivative.
24.6 Interest rate cash flow
risk
The Group's interest-bearing
liabilities relate to its variable rate banking facilities. The
Group has a policy of keeping the rates associated with funding
under review in order to react to any adverse changes in the
marketplace that would impact on the interest rates in place. The
effect of a 1% increase in interest rates would have resulted in a
decrease in net assets of £61,000 (2023: £141,000).
24.7 Price
risk
The Group's profitability is
affected by price fluctuations in the sourcing of its products. The
Group continually monitors the price and availability of materials
but the costs of managing the exposure to price risk exceed any
potential benefits given the extensive range of products and
suppliers. The Directors will revisit the appropriateness of this
policy should the Group's operations change in size or
nature.
24.8 Maturity of financial
assets and liabilities
All of the Group's non-derivative financial liabilities and its
financial assets at the reporting date are either payable or
receivable within one year, except for borrowings as disclosed in
Note 21.
24.9 Summary of financial
assets and liabilities by category
The carrying amount of financial
assets and liabilities recognised may also be categorised as
follows:
|
As at
31 March
2024
|
As at
31 March
2023
|
|
£'000
|
£'000
|
Financial assets
|
|
|
Financial assets measured at amortised cost
|
|
|
Trade and other
receivables
|
34,080
|
20,073
|
Cash and cash
equivalents
|
11,631
|
7,536
|
|
45,711
|
27,609
|
Financial liabilities
|
|
|
Financial liabilities measured at amortised
cost
|
|
|
Non-current:
|
|
|
Borrowings
|
(13,449)
|
(14,293)
|
Current:
|
|
|
Borrowings
|
(1,268)
|
(5,026)
|
Trade payables
|
(9,676)
|
(8,697)
|
Directors loan account
|
(2)
|
(2)
|
Deferred consideration
|
-
|
(1,942)
|
Contingent consideration
|
-
|
(2,200)
|
Other creditors
|
(525)
|
(3,415)
|
Accruals
|
(10,673)
|
(5,651)
|
|
(35,593)
|
(41,226)
|
|
|
|
Financial liabilities measured at fair value through profit
and loss
|
|
|
Forward contracts
|
(52)
|
(652)
|
|
(52)
|
(652)
|
|
|
|
Net financial assets /
(liabilities)
|
10,066
|
(14,269)
|
25.
Share capital and reserves
Share capital and share
premium
Equity
instruments issued by the Company are recognised at the proceeds
received, net of direct issue costs. The
excess of proceeds of a share issue over the nominal value is
presented within share premium.
Number of shares authorised
and in issue
|
Ordinary
£0.10
|
|
No.
|
£
|
At 1
April 2022
|
116,627,074
|
11,662,707
|
Issued
|
688,968
|
68,897
|
At 31 March 2023
|
117,316,042
|
11,731,604
|
Issued
|
27,961
|
2,796
|
Cancelled
|
(828,000)
|
(82,800)
|
At 31 March 2024
|
116,516,003
|
11,651,600
|
Issued shares in the
year
Date
|
Number of
shares
|
Type of share
|
Subscription
price
|
Share
capital
|
Share
premium
|
Total cost
|
3 Apr 2023
|
5,084
|
Ordinary £0.10
|
£0.3837
|
£508
|
£1,442
|
£1,950
|
5 Oct 2023
|
12,709
|
Ordinary £0.10
|
£0.3837
|
£1,271
|
£3,606
|
£4,877
|
14 Dec 2023
|
5,084
|
Ordinary £0.10
|
£0.3837
|
£508
|
£1,442
|
£1,950
|
27 Mar 2024
|
5,084
|
Ordinary £0.10
|
£0.3837
|
£508
|
£1,442
|
£1,950
|
Total
|
27,961
|
n/a
|
n/a
|
£2,795
|
£7,932
|
£10,727
|
Cancelled shares in the
year
Buy back
date
|
Number of shares bought
back
|
Type of
share
|
Subscription
price
|
Total
price
|
Cancellation
date
|
Number of shares
cancelled
|
Share capital value
cancelled
|
13 Feb
2024
|
75,000
|
Ordinary
£0.10
|
£1.2165
|
£91,238
|
16 Feb
2024
|
75,000
|
£7,500
|
20 Feb
2024
|
140,000
|
Ordinary
£0.10
|
£1,2923
|
£180,922
|
26 Feb
2024
|
140,000
|
£14,000
|
27 Feb
2024
|
57,500
|
Ordinary
£0.10
|
£1.2886
|
£74,095
|
29 Feb
2024
|
57,500
|
£5,750
|
5 Mar
2024
|
250,000
|
Ordinary
£0.10
|
£1.2311
|
£307,775
|
8 Mar
2024
|
250,000
|
£25,000
|
12 Mar
2024
|
170,000
|
Ordinary
£0.10
|
£1.0908
|
£185,436
|
15 Mar
2024
|
170,000
|
£17,000
|
19 Mar
2024
|
90,000
|
Ordinary
£0.10
|
£1.1868
|
£106,812
|
26 Mar
2024
|
90,000
|
£9,000
|
22 Mar
2024
|
45,500
|
Ordinary
£0.10
|
£1.1803
|
£53,704
|
26 Mar
2024
|
45,500
|
£4,550
|
Total
|
828,000
|
n/a
|
n/a
|
£999,982
|
n/a
|
828,000
|
£82,800
|
On 29 January 2024, Supreme PLC
announced a Share Buyback programme of up to £1million. Between 16
February 2024 and 26 March 2024, 828,000 shares were bought back by
Supreme PLC and then subsequently cancelled.
Dividends
Dividends of £4,341,000 (2023:
£5,365,000) were declared and paid in the year; a final dividend in
respect of 2023 of £0.022 per share (2023: £0.038 per share) and an
interim dividend in respect of 2024 of £0.015 per share (2023:
£0.008 per share).
Merger reserve
The merger reserve arose on a past
business combination of entities that were under common control.
The merger reserve is the difference between the cost of investment
and the nominal value of the share capital acquired.
Share-based payments reserve
The share-based payments reserve
represents the cumulative impact of the share-based payments
charge.
Retained earnings
Retained earnings includes all
current and prior period retained profits and losses, including
foreign currency translation differences arising from the
translation of financial statements of the Company's foreign
entities.
All transactions with owners of
the parent are recorded separately within equity.
26. Share based
payments
The Group operates a number of
share incentive arrangements as set out below.
The Supreme plc Enterprise
Management Incentive Scheme ("the EMI Scheme")
On 14 September 2018, the
Group implemented an Enterprise Management
Incentive Scheme. This was granted to employees to acquire shares
in the Company for a number of ordinary shares of 10p each at the
exercise price at the option of the employee. The exercise of these
options was originally subject to the occurrence of a relevant
event (a disposal or a listing) in accordance with the EMI Scheme
rules, but this condition was satisfied by the 2021 listing of the
Company. These options will expire 10 years from grant date. A
second scheme was implemented alongside the EMI scheme ('2018
unapproved scheme') for one employee who was eligible for more
options that the EMI scheme rules allowed for. All conditions of
this scheme were the same as the EMI Scheme.
These options were fairly valued
upon a valuation of the entity that had been performed by an
independent expert.
2018 EMI
scheme
|
Weighted average exercise
price 2024 £
|
2024
No.
|
Weighted average exercise
price 2023 £
|
2023
No.
|
At
the start
of the year
|
£0.38
|
622,725
|
£0.38
|
1,148,850
|
Lapsed
|
£0.38
|
(5,084)
|
£0.38
|
(30,504)
|
Granted
|
-
|
-
|
-
|
-
|
Exercised
|
£0.38
|
(27,961)
|
£0.38
|
(495,621)
|
At
the end of the
year
|
£0.38
|
589,680
|
£0.38
|
622,725
|
The profit and loss expense that
has been recognised in the current year in respect of these awards
is £nil (2023: £nil).
2018 unapproved
scheme
|
Weighted average exercise
price 2024 £
|
2024
No.
|
Weighted average exercise
price 2023 £
|
2023
No.
|
At the
start of the year
|
£0.38
|
193,347
|
£0.38
|
386,694
|
Lapsed
|
-
|
-
|
-
|
-
|
Granted
|
-
|
-
|
-
|
-
|
Exercised
|
-
|
-
|
£0.38
|
(193,347)
|
At the end of the
year
|
£0.38
|
193,347
|
£0.38
|
193,347
|
The profit and loss expense that
has been recognised in the current year in respect of these awards
is £nil (2023: £94,000).
The Supreme plc Sharesave
Scheme 2021 ("the SAYE Scheme")
The Company established the SAYE
Scheme on 26 January 2021. The SAYE Scheme is open to all employees
who have achieved the qualifying length of service at the proposed
date of grant (initially set at 3 months). Under the SAYE Scheme,
an individual who wishes to accept an invitation to apply form
options to be granted to him or her must take out a 3 or 5 year
savings contract with an approved savings body selected by the
Company. The
individual makes a fixed monthly
contribution over the life of the savings contract and on maturity
receives a tax-free bonus. The monthly contribution can be a
minimum of £10 and a maximum of £500.
The price at which options may be
exercised will be set by the Directors at the date of grant and may
be at a discount of up to a maximum of 20 per cent. against the
market value at the date of grant of the Shares over which they are
granted. The Option will generally be exercisable by the holder
within six-month period after the bonus becomes payable on his or
her relevant savings contract.
All employees of the Group
(including executive directors) at 3 March 2021 were
invited to participate in the SAYE Scheme. Employees were invited
to subscribe for options over the Company's ordinary shares of 10p
each with an exercise price of 152p, which represents a 20%
discount to the closing middle market price of 190p per Share
("Options") on 2 March 2021, being the trading day before the
invitation for employees to participate was made. Other than in the
case of a takeover or demerger or similar event, an option will
generally be exercisable by the holder in relation to the SAYE
Scheme within the 6-month period after the bonus becomes payable on
his or her relevant savings contract. Any option not so exercised
will lapse. There are no conditions of exercise in relation to
options granted under the SAYE Scheme.
2021 SAYE
scheme
|
Weighted average exercise
price 2024 £
|
2024
No.
|
Weighted average exercise
price 2023 £
|
2023
No.
|
At the
start of the year
|
£1.52
|
195,167
|
£1.52
|
354,078
|
Lapsed
|
£1.52
|
(47,387)
|
£1.52
|
(158,911)
|
Granted
|
-
|
-
|
-
|
-
|
Exercised
|
-
|
-
|
-
|
-
|
At the end of the
year
|
£1.52
|
147,780
|
£1.52
|
195,167
|
The profit and loss expense that
has been recognised in the current year in respect of these awards
is £34,000 (2023: £43,000)
The Supreme plc Company
Share Option Plan 2021 ("the CSOP Scheme")
The Company established the CSOP
Scheme on 26 January 2021. Grants under the CSOP Scheme may be made
by the Company as subscription Options or, with the consent of the
Remuneration Committee, by an existing shareholder over shares
already issued.
Under the CSOP Scheme certain
eligible employees have been granted options to subscribe for
ordinary shares in the Company of 10p each with an exercise price
of 174 pence per ordinary share equal to the closing
middle market price on 15 February 2021. The options were
granted on 16 February 2021 and may be exercisable by the
holder at any time between the third and tenth anniversaries of the
date of the grant. Upon exercise, the relevant Shares will be
allotted. A number of employees have been granted additional
options on the same basis under the Unapproved Scheme detailed
below to the extent that the total number of options granted to
them exceeded the maximum number permitted to be granted under the
CSOP Scheme by HMRC rules.
23 employees were granted options
under the CSOP over a total of 206,886 shares and 4 employees have
been granted options under the Unapproved Scheme over a total of
94,825 Shares, being in aggregate 301,711 shares. By 31 March 2024,
a total of 97,697 options had lapsed and 204,014 remained under
option.
2021 CSOP
|
Weighted average exercise
price 2024 £
|
2024
No.
|
Weighted average exercise
price 2023 £
|
2023
No.
|
At the
start of the year
|
£1.74
|
181,026
|
£1.74
|
201,140
|
Lapsed
|
£1.74
|
(31,608)
|
£1.74
|
(20,114)
|
Granted
|
-
|
-
|
-
|
-
|
Exercised
|
-
|
-
|
-
|
-
|
At the end of the
year
|
£1.74
|
149,418
|
£1.74
|
181,026
|
2021 unapproved
scheme
|
Weighted average exercise
price 2024 £
|
2024
No.
|
Weighted average exercise
price 2023 £
|
2023
No.
|
At the
start of the year
|
£1.74
|
54,596
|
£1.74
|
94,825
|
Lapsed
|
-
|
-
|
£1.74
|
(40,229)
|
Granted
|
-
|
-
|
-
|
-
|
Exercised
|
-
|
-
|
-
|
-
|
At the end of the
year
|
£1.74
|
54,596
|
£1.74
|
54,596
|
The profit and loss expense that
has been recognised in the current year in respect of these awards
is a credit of £2,600 (2023: £57,000).
The Supreme plc Unapproved
Share Option Scheme 2021 ("the Unapproved
Scheme")
The Company established the
Unapproved Scheme on 26 January 2021. Grants under the CSOP Scheme
may be made by the Company as subscription Options or, with the
consent of the Remuneration Committee, by an existing shareholder
over shares already issued.
As described in the Directors'
Remuneration Report, on 9 March 2021 the Company awarded the
following options to the executive directors under the Unapproved
Scheme.
Options to subscribe for a total
of 5,825,000 Shares at nominal value were granted to the CEO in two
equal tranches. Each tranche of options will be subject to a
performance condition which must be wholly satisfied for the
relevant option to be exercisable. The performance condition for
the first tranche of options is that total shareholder return per
Share ("TSR") from Admission until the third anniversary of
Admission is at least 100 per cent. of the placing price
of 134 pence as at Admission (the "Placing Price"). The
performance condition for the second tranche of options is that the
TSR from Admission until the fifth anniversary of Admission is at
least 200 per cent. of the Placing Price.
Options to subscribe for up to
111,940 Shares at nominal value were granted to the CFO in the year
ended 31 March 2022. The options are subject to a performance
condition requiring an average annual TSR of 7.5 per cent. to
become exercisable in part and an annual average TSR of 10 per
cent. to become fully exercisable, in each case measured over a
period of 3 years from Admission as against the Placing
Price.
Options to subscribe for a further
174,650 shares at nominal value were granted to the CFO during the
year ended 31 March 2023. These options are subject to performance
conditions. 50% of the options require an average annual TSR of
7.5% to become exercisable in part and an annual average of TSR of
10% to become fully exercisable measured over a 3-year period. The
remaining 50% of options are linked to an EPS performance target
where a threshold of 33.7p by the end of a 3-year period is
required in order for the options to become exercisable and 41.1p
in order for the options to be fully exercisable.
Options to subscribe for a further
157,516 shares at nominal value were granted to the CFO during the
year ended 31 March 2024. These options are subject to performance
conditions. 50% of the options require an average annual TSR of
7.5% to become exercisable in part and an annual average of TSR of
10% to become fully exercisable measured over a 3-year period. The
remaining 50% of options are linked to an EPS performance target
where a threshold of 36.0p by the end of a 3-year period is
required in order for the options to become exercisable and 44.0p
in order for the options to be fully exercisable.
2021 3-year CEO
award
|
Weighted average exercise
price 2024 £
|
2024
No.
|
Weighted average exercise
price 2023 £
|
2023
No.
|
At the
start of the year
|
£0.00
|
2,912,500
|
£0.00
|
2,912,500
|
Lapsed
|
£0.00
|
(2,912,500)
|
-
|
-
|
Granted
|
-
|
-
|
-
|
-
|
Exercised
|
-
|
-
|
-
|
-
|
At the end of the
year
|
-
|
-
|
£0.00
|
2,912,500
|
|
|
|
|
|
|
|
|
|
|
2021 5-year CEO
award
|
Weighted average exercise
price 2024 £
|
2024
No.
|
Weighted average exercise
price 2023 £
|
2023
No.
|
At the
start of the year
|
£0.00
|
2,912,500
|
£0.00
|
2,912,500
|
Lapsed
|
-
|
-
|
-
|
-
|
Granted
|
-
|
-
|
-
|
-
|
Exercised
|
-
|
-
|
-
|
-
|
At the end of the
year
|
£0.00
|
2,912,500
|
£0.00
|
2,912,500
|
|
|
|
|
|
|
|
|
|
|
2021 CFO
award
|
Weighted average exercise
price 2024 £
|
2024
No.
|
Weighted average exercise
price 2023 £
|
2023
No.
|
At the
start of the year
|
£0.00
|
111,940
|
£0.00
|
111,940
|
Lapsed
|
£0.00
|
(111,940)
|
-
|
-
|
Granted
|
-
|
-
|
-
|
-
|
Exercised
|
-
|
-
|
-
|
-
|
At the end of the
year
|
-
|
-
|
£0.00
|
111,940
|
2022 Senior management
awards (TSR)
|
Weighted average exercise
price 2024 £
|
2024
No.
|
Weighted average exercise
price 2023 £
|
2023
No.
|
At the
start of the year
|
£0.00
|
87,325
|
-
|
-
|
Lapsed
|
-
|
-
|
£0.00
|
(24,950)
|
Granted
|
-
|
-
|
£0.00
|
112,275
|
Exercised
|
-
|
-
|
-
|
-
|
At the end of the
year
|
£0.00
|
87,325
|
£0.00
|
87,325
|
2022 Senior management
awards (EPS)
|
Weighted average exercise
price 2024 £
|
2024
No.
|
Weighted average exercise
price 2023 £
|
2023
No.
|
At the
start of the year
|
£0.00
|
87,325
|
-
|
-
|
Lapsed
|
-
|
-
|
£0.00
|
(24,950)
|
Granted
|
-
|
-
|
£0.00
|
112,275
|
Exercised
|
-
|
-
|
-
|
-
|
At the end of the
year
|
£0.00
|
87,325
|
£0.00
|
87,325
|
2023 Senior management £nil
cost awards (TSR)
|
Weighted average exercise
price 2024 £
|
2024
No.
|
Weighted average exercise
price 2023 £
|
2023
No.
|
At the
start of the year
|
-
|
-
|
-
|
-
|
Lapsed
|
-
|
-
|
-
|
-
|
Granted
|
£0.00
|
108,011
|
-
|
-
|
Exercised
|
-
|
-
|
-
|
-
|
At the end of the
year
|
£0.00
|
108,011
|
-
|
-
|
2023 Senior management £nil
cost awards (EPS)
|
Weighted average exercise
price 2024 £
|
2024
No.
|
Weighted average exercise
price 2023 £
|
2023
No.
|
At the
start of the year
|
-
|
-
|
-
|
-
|
Lapsed
|
-
|
-
|
-
|
-
|
Granted
|
£0.00
|
108,011
|
-
|
-
|
Exercised
|
-
|
-
|
-
|
-
|
At the end of the
year
|
£0.00
|
108,011
|
-
|
-
|
The profit and loss expense that
has been recognised in the current year in respect of the
Unapproved Scheme is £1,046,000 (2023: £1,309,000).
The vesting of most of these
awards is subject to the Group achieving certain performance
targets under the Unapproved Scheme, measured over a three or five
year period, as set out in the Remuneration Report. The options
will vest depending on achievement of the Group's absolute total
shareholder return ("TSR") as follows:
The awards under the CSOP Scheme
and Unapproved Scheme to employees other than as noted above are
not subject to performance conditions and vest subject to continued
employment only.
In respect of the CFO and CFO
awards, the fair value at grant date is independently determined
using a Monte Carlo simulation model which calculates a fair value
based on a large number of randomly generated projections of the
Company's future share prices. In respect of the CSOP and
Unapproved Schemes, the fair value at grant date has been
determined using a Black-Scholes model that takes into account the
exercise price, the term of the option, the share price at grant
date and expected price volatility of the underlying share, and the
risk-free interest rate for the term of the option as shown
overleaf:
26. Share based
payments
|
Grant date
|
Share price at grant date
(pence)
|
Exercise price
(pence)
|
Expected volatility
(%)
|
Projection period
(yrs)
|
Expected lift
(yrs)
|
Expected dividend yield
(%)
|
Risk free interest rate
(%)
|
Fair value per award
(pence)
|
2018 unapproved
schemes
|
4 Jan
2021
|
134p
|
38.38p
|
45%
|
2.65
|
3
|
5.94%
|
-0.09%
|
71p
|
2021 CSOP
|
16 Feb
21
|
176p
|
174p
|
45%
|
n/a
|
3
|
4.10%
|
0.34%
|
50p
|
2021 unapproved
schemes
|
16 Feb
21
|
176p
|
174p
|
45%
|
n/a
|
3
|
4.10%
|
0.34%
|
50p
|
2021 3 year CEO
award
|
9 Mar
21
|
185p
|
nil
|
45%
|
2.89
|
3
|
3.90%
|
0.12%
|
74p
|
2021 5 year CEO
award
|
9 Mar
21
|
185p
|
nil
|
45%
|
0.89
|
5
|
3.90%
|
0.31%
|
59p
|
2021 CFO
|
9 Mar
21
|
185p
|
nil
|
45%
|
2.89
|
3
|
3.90%
|
0.12%
|
109p
|
2021 SAYE
|
18 Mar
21
|
190p
|
154p
|
55%
|
3.16
|
3
|
3.79%
|
0.14%
|
59p
|
2022 Senior management £nil
cost awards (TSR)
|
5 Aug
21
|
101p
|
10p
|
55%
|
2.65
|
3
|
5.94%
|
1.92%
|
31p
|
2022 Senior management £nil
cost awards (EPS)
|
5 Aug
21
|
101p
|
10p
|
55%
|
n/a
|
3
|
5.94%
|
1.92%
|
75p
|
2023 Senior management £nil
cost awards (TSR)
|
30 Nov
23
|
124p
|
10p
|
53%
|
2.33
|
3
|
2.98%
|
4.30%
|
79p
|
2023 Senior management £nil
cost awards (EPS)
|
30 Nov
23
|
124p
|
10p
|
53%
|
n/a
|
3
|
2.98%
|
4.30%
|
105p
|
The expected volatility has been
estimated based upon the historical volatility of the FTSE AIM
Retailers and Personal & Household goods sub
sectors.
No awards are exercisable at the
end of the year. The charge for share-based payments in the year
was £1,226,000 (2023: £1,460,000) which is included within Adjusted
items. Of this, £148,000 (2023 £177,000) related to Employers
National Insurance Contributions and £1,078,000 (2023: £1,283,000)
related to the share-based payments charge.
27.
Ultimate controlling party
The Directors consider the
ultimate controlling party to be S Chadha and his concert
party.
28.
Other financial commitments
See note
24.5 for details of the financial commitments under US dollar
forward exchange contracts.
29.
Related party transactions
29.1 Remuneration of key
personnel
Remuneration of key management
personnel, considered to be the Directors of the Company and
members of the senior management team is as follows:
|
Year Ended
31 March
2024
|
Year Ended
31 March
2023
|
|
£'000
|
£'000
|
|
|
|
Short-term employee benefits
|
1,793
|
1,152
|
Social
security costs
|
254
|
159
|
Employee
share schemes
|
1,184
|
1,405
|
Post-employment benefits
|
9
|
8
|
Total
compensation
|
3,240
|
2,724
|
29.2
Transactions and balances with key
personnel
|
As at
31 March
2024
|
As at
31 March
2023
|
|
£'000
|
£'000
|
Loan balances with Directors:
|
|
|
Balance outstanding from
director
|
(2)
|
(2)
|
29.3
Transactions and balances with related
companies and businesses
|
Year Ended
31 March
2024
|
Year Ended
31 March
2023
|
|
£'000
|
£'000
|
Transactions with related
companies:
|
|
|
Rent paid
to SC8 Limited
|
365
|
-
|
Rent paid
to Chadha Properties Limited
|
-
|
180
|
On 30 March 2023 the landlord of
Beacon Road, Supreme's principal operating site, changed from
Chadha Properties Limited to SC8 Limited (formerly Supreme 8
Limited), both of which are related parties. SC8 Limited is owned
entirely by Sandy Chadha, a director of Supreme PLC. On 5 May 2023
a new lease was signed between SC8 Limited and Supreme Imports Ltd
for a term of 5 years from 16 March 2023. Rent to be paid to
SC8 Limited in respect of Beacon Road will be £374,000 per annum
(plus VAT) and will continue to be disclosed as a transaction with
related parties.
There are no year end balances due
to any related company.
The above companies are related
due to common control and Directors.
30. Acquisition of assets of Food IQ
Limited
No acquisitions took place in the
year that met the definition of a business combination under IFRS
3. The business did however acquire the plant and machinery of
FoodIQ UK Holdings Limited ("Food IQ"), a protein manufacturer, for
consideration of £175,000. Owing to the lack of operational
employees, active customer contracts or intellectual property
acquired as part of the acquisition the assets acquired did not
constitute a "business" under IFRS 3 and therefore this was not
deemed to be a business combination. The acquired assets are
reported within additions within note 13.
31.
Post balance date events
On 21 June 2024, Supreme acquired
the entire share capital of Acorn Topco Limited, the parent company
of Clearly Drinks Limited, a long-established and well-known UK
manufacturer and brand owners of specialised canned and
bottled-at-source spring water and soft drinks, for a net
consideration of £15 million. Given the proximity of the
acquisition to the signing of these financial statements, the
purchase price allocation exercise had not been finalised and is
therefore not disclosed as part of these financial
statements.
Company Statement of
Financial Position
as at 31 March 2024
|
|
As at
31 March
2024
|
As at
31 March
2023
|
|
Note
|
£'000
|
£'000
|
Fixed
assets
|
|
|
|
Investments
|
6
|
26,150
|
26,112
|
|
|
26,150
|
26,112
|
|
|
|
|
Current
assets
|
|
|
|
Debtors
|
7
|
10,599
|
10,962
|
Cash at
bank and in hand
|
|
3
|
4
|
|
|
10,602
|
10,966
|
|
|
|
|
Creditors: amounts falling
due within one year
|
8
|
(768)
|
(620)
|
|
|
|
|
Net current
assets
|
|
9,834
|
10,346
|
|
|
|
|
Total assets less current
liabilities
|
|
35,984
|
36,458
|
|
|
|
|
Net assets
|
|
35,984
|
36,458
|
|
|
|
|
Capital and
reserves
|
|
|
|
Share
capital
|
9
|
11,652
|
11,732
|
Share
premium
|
9
|
7,435
|
7,427
|
Capital
redemption reserve
|
|
83
|
|
Share-based payments reserve
|
|
3,948
|
2,729
|
Retained
earnings
|
|
12,866
|
14,570
|
Total
Equity
|
|
35,984
|
36,458
|
The Company has taken advantage of
the exemption permitted by Section 408 of the Companies Act 2006
not to produce its own profit and loss account. The profit for the
year dealt within the financial statements of the Company was
£3,637,000 (2023:
£4,195,000).
The notes are an integral part of
these Company financial statements.
The Company financial statements
were approved by the Board of Directors on 1 July 2024 and were
signed on its behalf by:
S
Smith
Director
Registered number: 05844527
Company Statement of Changes
in Equity
for the
Year Ended 31 March 2024
|
Share
Capital
|
Share
premium
|
Capital redemption
reserve
|
Share-based payments
reserve
|
Retained
earnings
|
Total
equity
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
As at 1 April
2022
|
11,663
|
7,231
|
-
|
2,066
|
15,740
|
36,700
|
|
|
|
|
|
|
|
Profit
for the year
|
-
|
-
|
-
|
-
|
4,195
|
4,195
|
Total
comprehensive income for the year
|
-
|
-
|
-
|
-
|
4,195
|
4,195
|
|
|
|
|
|
|
|
Transactions with
shareholders:
|
|
|
|
|
|
|
Issue of
shares (note 9)
|
69
|
196
|
-
|
-
|
-
|
265
|
Employee
share schemes - value of employee services (note 11)
|
-
|
-
|
-
|
1,271
|
-
|
1,271
|
Deferred
tax on share-based payment charge (note 5)
|
-
|
-
|
-
|
(608)
|
-
|
(608)
|
Dividends
(note 9)
|
-
|
-
|
-
|
-
|
(5,365)
|
(5,365)
|
Total transactions with
owners, recognised in equity
|
69
|
196
|
-
|
663
|
(5,365)
|
(4,437)
|
As at 31 March
2023
|
11,732
|
7,427
|
-
|
2,729
|
14,570
|
36,458
|
|
|
|
|
|
|
|
Profit
for the year
|
-
|
-
|
-
|
-
|
3,637
|
3,637
|
Total
comprehensive income for the year
|
-
|
-
|
-
|
-
|
3,637
|
3,637
|
|
|
|
|
|
|
|
Transactions with
shareholders:
|
|
|
|
|
|
|
Issue of
shares (note 9)
|
3
|
8
|
-
|
-
|
-
|
11
|
Share buy
back (note 9)
|
-
|
-
|
-
|
-
|
(1,000)
|
(1,000)
|
Cancellation of shares (note 9)
|
(83)
|
-
|
83
|
-
|
-
|
-
|
Employee
share schemes - value of employee services (note 11)
|
-
|
-
|
-
|
1,078
|
-
|
1,078
|
Deferred
tax on share-based payment charge (note 5)
|
-
|
-
|
-
|
141
|
-
|
141
|
Dividends
(note 9)
|
-
|
-
|
-
|
-
|
(4,341)
|
(4,341)
|
Total transactions with
owners, recognised in equity
|
(80)
|
8
|
83
|
1,219
|
(5,341)
|
(4,111)
|
As at 31 March
2024
|
11,652
|
7,435
|
83
|
3,948
|
12,866
|
35,984
|
The notes form part of these
Company financial statements.
1. General
Information
Supreme PLC ("the Company") is a
public company, limited by shares, registered in England and Wales
and domiciled in the UK, with company registration number 05844527.
The principal activity is that of a holding company. The registered
office is 4 Beacon Road, Ashburton Park, Trafford Park, Manchester,
M17 1AF.
2. Summary of
material accounting policies
2.1 Reporting
framework
The separate financial statements
of the Company have been prepared in accordance with Financial
Reporting Standard 101, "Reduced Disclosure Framework" ("FRS 101"),
on the going concern basis under the historical cost convention,
and in accordance with the Companies Act 2006 as applicable to
companies reporting under FRS 101.
The financial information is
presented in sterling and has been rounded to the nearest thousand
(£'000).
The principal accounting policies,
which have been applied consistently to all the years presented,
are set out below.
2.2 Financial Reporting
Standard 101 - reduced disclosure
exemptions
The following exemptions from the
requirements in IFRS have been applied in the preparation of these
financial statements:
· The
requirement of IFRS 1, 'First-time adoption of International
Financial Reporting Standards', to present a statement of financial
position at the date of transition.
· IFRS
7, "Financial Instruments: Disclosures".
· Paragraphs 91 to 99 of IFRS 13, "Fair value measurement"
(disclosure of valuation techniques and inputs used for fair value
measurements of assets and liabilities).
· Paragraph 38 of IAS 1, "Presentation of financial statements"
- comparative information requirements in respect of:
i.
Paragraph 79(a)(iv) of IAS 1;
ii.
Paragraph 73 (e) of IAS 16, "Property, plant and equipment";
and
iii. Paragraph
118 (e) of IAS 38, "Intangible assets" (reconciliations between the
carrying amount at the beginning and end of the period).
· The
following paragraphs of IAS 1, "Presentation of financial
statements":
iv. 10(d)
(statement of cash flows);
v. 16
(statement of compliance with all IFRS);
vi. 38A
(requirement of minimum of two primary statements, including cash
flow statements);
vii. 38B-D (additional
comparative information);
viii. 111 (statement of cash
flows information); and
ix. 134-136
(capital management disclosures).
· IAS
7, "Statement of cash flows".
· Paragraphs 30 and 31 of IAS 8, "Accounting policies, changes
in accounting estimates and errors" (requirement for the disclosure
of information when an entity has not applied a new IFRS that has
been issued but is not yet effective).
· Paragraph 17 of IAS 24, "Related party disclosures" (key
management compensation).
· The
requirements in IAS 24, "Related party disclosures", to disclose
the related party transactions entered into between two or more
members of a Group.
· Paragraphs 130(f)(ii)(iii), 134(d)-(f) and 135(c)-(e) of IAS
36, "Impairment of assets".
· Paragraphs 113(a), 114, 115, 118, 119(a) to (c), 120 to 127
and 129 and the second sentence of paragraph 110 of IFRS
15.
This information is included in
the consolidated financial statements found earlier in this
report.
2.3 Company profit and loss
account
The Company has not presented its
own profit and loss account as permitted by Section 408 of the
Companies Act 2006. The Company's profit after taxation for the
period was £3,637,000 (2023: £4,195,000). There are no material
differences between the loss after taxation in the current period
and its historical cost equivalent. Accordingly, no note of
historical cost profits and losses has been presented.
2.4 Going
concern
In assessing the appropriateness of
adopting the going concern basis in the preparation of these
financial statements, the Directors have prepared cash flow
forecasts and projections for the two-year period to 31 March 2026.
These forecasts and projections, which the Directors consider to be
prudent, have been further sensitised by applying general
reductions to revenue and profitability, to consider downside risk.
Under both the base and sensitised cases the Group is expected to
have headroom against covenants, which are based on interest cover
and net leverage, and a sufficient level of financial resources
available through existing facilities when the future funding
requirements of the Group are compared with the level of committed
available facilities. In addition to these general sensitivities,
the Directors have specifically also considered the proposed
changes to the regulatory landscape within the vaping industry, the
increased cost of borrowing and the ongoing cost of living crisis
taking place in the UK, all of which have been reflected in this
forecast.
· The
Directors have performed a specific sensitivity in reference to the
upcoming ban on disposables vapes (currently scheduled for 1 April
2025) in which a scenario where all the revenue currently
attributable to disposable vapes does not transition to an
alternative form of vaping has been assessed. The sensitivity
confirmed that without the sale of disposable vapes or a likely
substitute product in its place, the remaining Supreme group would
remain profitable and cash-generative and therefore this does not
pose a problem in respect of going concern.
· In
addition to the specific sensitivity on the disposable vape ban,
the Directors have also performed reverse stress-testing on the
cash flow forecasts to see how far revenue would be required to
decline before a banking covenant would breach or the Group would
run out of cash. This exercise highlighted that revenue would need
to fall by 47% (with the overhead base remaining in place entirely)
before a banking covenant would breach.
· Whilst the Group's debt facilities are priced at a variable
rate (SONIA + a margin) the Group's current positive leverage ratio
(i.e. having no bank borrowings with at the balance sheet date or
since then), means that Supreme's exposure to any increases in
borrowing rates is limited. Should the Group increase its level of
bank borrowings during the forecast period (likely to be triggered
by M&A) then of course this increased cost of borrowing would
impact the Group (albeit expected to be offset by the incremental
earnings generated by any M&A target).
· Historically Supreme has been a net beneficiary in periods of
economic downturn, owing to the fact more than half of its revenue
is derived from the discount retail sector which typically trades
buoyantly during these periods (for prudence this has not been
assumed in the forecast). The inflationary cost increases
(specifically over salary costs, energy and transport) have been
specifically factored into the cost base throughout for the
forecast period.
Based on this, the Directors are
satisfied that the Group has adequate resources to continue in
operational existence for the foreseeable future. For this reason,
they continue to adopt the going concern basis in preparing the
Group and Company financial statements.
2.5 Financial
instruments
Financial assets and financial
liabilities are recognised in the Company's Statement of Financial
Position when the Company becomes party to the contractual
provisions of the instrument. Financial assets are de-recognised
when the contractual rights to the cash flows from the financial
asset expire or when the contractual rights to those assets are
transferred. Financial liabilities are de-recognised when the
obligation specified in the contract is discharged, cancelled or
expired.
2.6 Share-based
payments
Where share options are awarded to
employees, the fair value of the options at the date of grant is
charged to profit or loss over the vesting period. Non-market
vesting conditions are taken into account by adjusting the number
of equity instruments expected to vest at each Statement of
Financial Position date so that, ultimately, the cumulative amount
recognised over the vesting period is based on the number of
options that eventually vest. Market vesting conditions are
factored into the fair value of the options granted. The cumulative
expense is not adjusted for failure to achieve a market vesting
condition.
The fair value of the award also
takes into account non-vesting conditions. These are either factors
beyond the control of either party (such as a target based on an
index) or factors which are within the control of one or other of
the parties (such as the Group keeping the scheme open or the
employee maintaining any contributions required by the
scheme).
Where the terms and conditions of
options are modified before they vest, the increase in the fair
value of the options, measured immediately before and after the
modification, is also charged to the Statement of Comprehensive
Income over the remaining vesting period. Where equity instruments
are granted to persons other than employees, the Statement of
Comprehensive Income is charged with fair value of goods and
services received. The value of the awards made to the employees of
the Company's subsidiaries are treated as an increase in the cost
of investment in the subsidiary, with the credit taken to the
share-based payments reserve.
3. Critical
accounting estimates and judgements
In the preparation of the Company
financial statements, the Directors, in applying the accounting
policies of the Company, make some judgements and estimates that
effect the reported amounts in the financial statements. The
following are the areas requiring the use of judgement and
estimates that may significantly impact the financial
statements.
Accounting estimates
Information about estimates and
assumptions that may have the most significant effect on
recognition and measurement of assets, liabilities, income and
expenses is provided below. Actual results may be substantially
different.
3.1 Non-current asset
impairment
The carrying value of the
Company's investments in subsidiaries was £26,150,000 at 31 March
2024. The Directors have performed an impairment review by
comparing the carrying value to the higher of the value-in-use and
fair value less costs to sell of the underlying assets. The
value-in-use calculations require the use of estimates in
calculating the future cash forecasts based upon management
judgement. Future events could cause the assumptions to change,
therefore this could have an adverse effect on the future results
of the Company. The fair value less costs to sell calculations
include an element of judgement.
The estimates used in the
impairment calculation are set out in Note 12 to the Group
financial statements.
Accounting judgements
Judgements in applying accounting
policies and key sources of estimation uncertainty.
The following are the areas
requiring the use of judgement that may significantly impact the
Company financial statements:
3.2 Non-current asset
impairment
The calculation of fair value less
costs to sell is based upon management's judgement by reference to
the Group's market capitalisation. Taking into account movements in
the share price the Directors consider there to be no reasonably
possible scenario in which the asset would be impaired. No
reasonable change in inputs would result in impairment.
4. Remuneration of
Directors and auditors
Details of Directors' remuneration
are shown in the Directors' Remuneration Report in note 8 of the
Group financial statements. Details of auditors' remuneration are
shown in note 6 of the Group financial statements. The Company has
no employees.
5. Deferred
tax
Deferred tax consists of the
following temporary differences
|
As at
31 March
2024
|
As at
31 March
2023
|
|
£'000
|
£'000
|
Share
based payments
|
607
|
640
|
|
607
|
640
|
Movement in deferred tax in
the year
|
As at
31 March
2024
|
As at
31 March
2023
|
|
£'000
|
£'000
|
Balance
at the beginning of the year
|
640
|
759
|
(Debited)/credited to profit or loss
|
(174)
|
489
|
Credited/(debited) to reserves
|
141
|
(608)
|
Balance
at the end of the year
|
607
|
640
|
6.
Investments
|
As at
31 March
2024
|
As at
31 March
2023
|
|
£'000
|
£'000
|
Balance at the beginning of the
year
|
26,112
|
25,979
|
Capital Contribution
|
38
|
133
|
Balance at the end of the
year
|
26,150
|
26,112
|
At 31 March 2024, the Company
directly owned 100% of the ordinary share capital of the following
subsidiaries, which are incorporated in England and Wales unless
stated:
Subsidiary
|
Registered address
|
Principal activity
|
Supreme Imports Limited
|
4 Beacon Road, Ashburton Park,
Trafford Park, Manchester M17 1AF
|
Distribution of consumer
goods
|
Provider Distribution
Limited
|
Unit 1 Rosewood Park, St James
Road, Blackburn, Lancashire BB1 8ET
|
Distribution of consumer
goods
|
At 31 March 2024, the Company
indirectly owned 100% of the ordinary
share capital of the following subsidiaries, which are incorporated
in England and Wales unless stated:
Subsidiary
|
Registered address
|
Principal activity
|
VN Labs Limited
|
4 Beacon
Road, Ashburton Park, Trafford Park, Manchester M17 1AF
|
Distribution of consumer
goods
|
Battery Force Limited
|
Dormant
|
Powerquick Limited
|
Holding company
|
Supreme 88 Limited
|
Holding company
|
Supreme Nominees
Limited
|
Holding of shares as
nominee
|
Holding Esser Affairs
B.V.
|
Vanadiumweg 13, 3812 PX,
Armersfoort, Netherlands
|
Holding company
|
AGP Trading B.V.
|
Distribution of consumer
goods
|
Vendek Limited
|
Unit C5, South City Business Park,
Whitestown Way, Tallaght, Dublin 24, D24 A993
|
Distribution of consumer
goods
|
Liberty Flights Holdings
Limited
|
4 Beacon Road, Trafford Park,
Manchester, England, M17 1AF
|
Holding company
|
Liberty Flights Limited
|
Distribution of consumer
goods
|
The Directors believe that the
carrying value of the investments is supported by their underlying
net assets.
7.
Debtors
Amounts Held in Current Assets
|
As at
31 March
2024
|
As at
31 March
2023
|
|
£'000
|
£'000
|
Amounts owed by Group
undertakings
|
9,992
|
10,322
|
Deferred Tax (note 5)
|
607
|
640
|
|
10,599
|
10,962
|
The Directors believe that the
carrying value of trade and other receivables represents their fair
value. In determining the recoverability of trade receivables, the
Company considers any change in the credit quality of the
receivable from the date credit was granted up to the reporting
date.
All the amounts owed by Group
undertakings shown above are repayable on demand. Historically,
there have not been any incidents of credit losses on intercompany
balances.
The deferred tax asset of £607,000
(2023: £640,000) falls due in more than one year.
8. Creditors:
amounts falling due within one year
|
As at
31 March
2024
|
As at
31 March
2023
|
|
£'000
|
£'000
|
Amounts owed to Group
undertakings
|
300
|
-
|
Amounts owed to related
parties
|
-
|
300
|
Other tax and social
security
|
468
|
320
|
|
768
|
620
|
Amounts owed to Group undertakings
are interest free and repayable on demand. Amounts owed to related
parties accrue interest at 3% and are repayable on
demand.
9. Share capital
and reserves
Details of movements in share
capital and reserves are set out in Note 25 to the Group financial
statements.
10.
Related party
transactions
The Company has taken advantage of
the exemption included in IAS 24 'Related Party Disclosures' not to
disclose details of transactions with Group undertakings, on the
grounds that it is the parent company of a Group whose financial
statements are publicly available.
Directors'
transactions
Details of the Directors'
interests in the ordinary share capital of the Company are provided
in the Directors' Remuneration Report.
11. Share based
payments
The Company operates a number of
share option arrangements for key executives and employees, further
details of which can be found in note 26 to the Group financial
statements. Further details of the arrangements for senior
executives can be found in the Directors' Remuneration Report in
the Group financial statements.
The Company recognised total
expenses of £1,184,000 in respect of the equity-settled share-based
payment transactions in the year ended 31 March 2024 (2023:
£1,271,000). This included £144,000 of Employers National Insurance
contributions (2023: £157,000). The additional charge to equity of
£38,000 reflects the options granted to employees of Supreme
Imports Ltd and corresponds to the increase in the investment in
the subsidiary as shown in note 6.
12. Post balance date
events
On 21 June 2024 Supreme Imports
Limited, a 100% owned subsidiary of the Company acquired
the entire share capital of Acorn Topco Limited,
the parent company of Clearly Drinks Limited. Further details
of this can be found in note 31 to the Group financial
statements.