When you have a winning strategy, then it's important to ‘rinse and repeat’ the business model in order to maximise performance. Take Supreme Plc (SUP )
A leading vertically integrated UK brand owner, licenser and distributor of FMCG products across Electricals (22% revenues), Vaping (55%) and Drinks & Wellness (22%). Selling these non-perishable (& ambient) items to more than 3,000 retailers - alongside offering a popular blend of quality and affordability that satisfies the more budget conscious tastes of cash strapped households.
What’s more, there are significant synergies created whenever Supreme PLC buys similar brands which can be quickly ‘lifted & shifted’ within its established distribution footprint. Indeed this ‘blueprint’ has already delivered attractive returns from its purchases of Clearly Drinks (Jun’24 for £15.6m) and Typhoo Tea (£10.2m, Nov’24).
Likewise I expect another positive outcome from today’s "earnings enhancing" £1.65m (plus £3m earnout) bolt-on acquisition of heritage household cleaning brand “1001” from WD-40.
1001 is best known for its carpet and upholstery care products (eg fresheners, stain removers, etc) - that delivered turnover of £4.5m for the year ended Aug’25 from servicing blue chip customers such as Aldi (new to hashtag#SUP), Tesco, Asda, Morrisons, Home Bargains and B&M Bargains. Moreover at its peak, the products generated £8m of sales - a target which I suspect is not insurmountable again if the right buttons are pushed, particularly as part of a well-oiled supply chain.
Wrt the numbers, Q1’26 trading was said in July to be positive, especially for soft drinks thanks to the favourable summer weather (re bottled water). With March FY26 revenues and EBITDA anticipated to come in at circa £240m and £36.0m respectively. Hence putting the stock at 180p on modest EV/EVITDA, EV/EBIT and PE multiples of 6.0x, 7.3x and 9.2x respectively – whilst equally sporting a 2.5% dividend yield with Equity Development valuing hashtag#SUP at 225p/share.
CEO Sandy Chadha commenting: “1001 is a heritage British brand with decades of trust and consumer recognition and we are thrilled to welcome it into the Supreme family. This acquisition highlights our ability to identify and reinvigorate brands with strong equity while leveraging our shared back-office capabilities. We see substantial potential to expand the 1001 range, invest in its growth, and build another successful vertical alongside our existing portfolio."
Finally, watch out for Supreme PLC’s AGM trading update on Thurs 18th Sept.
Disclosure: Supreme PLC is a Vox Markets client.