Entrepreneurial talent, strategic thinking, organic growth, and opportunistic M&A run through the DNA of FMCG group Supreme PLC (SUP) .
Indeed, in order to future-proof its rapidly expanding (H1'24 revenues up 17%) sports nutrition and wellness division - including brands Sci-MX, Sealions, Millions & Millions - the company said today that it had acquired out of receivership FoodIQ UK Holdings Limited for £175,000 from the administrator Kroll Advisory.
To me, this 'bolt-on' purchase has all the hallmarks of another excellent deal, particularly as it grants Supreme PLC access to a purpose-built, state-of-the-art facility that only opened 18 months ago and cost £1.2m to build.
While the transaction may be marginally dilutive on day 1, once integrated and fully up and running, the facility should increase Supreme PLC's wellness manufacturing capacity by around 40%.
CEO Sandy Chadha commenting: "We are delighted to have completed this acquisition, which provides our fast-growing Sports Nutrition & Wellness division with the manufacturing capacity required to meet growing demand. We have used Food IQ in the past to manage capacity requirements in our Sports Nutrition & Wellness division, so are familiar with their capability."
Regarding numbers, I make no changes to my March FY'24 adjusted PBT forecasts of £27.1m (+77% YoY) on sales up 44% to £220m, delivering a fair value of 225p/share.
What’s more, at 114p the stock trades on attractive FY’24 PER, EBIT & EBITDA multiples of 6.4x, 4.8x & 4.1x, whilst equally paying an est 4.5p dividend (3.9% yield).
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