It’s all systems go for FMCG firm Supreme (SUP) , (Marketcap £129m) - who today posted record H1 results (Adj PBT up +103% to £11.8m on sales 63% higher at £105.1m). Alongside upgrading FY'24 guidance (Revs £210-£225m: Adjusted EBITDA £32m-£35m) as more consumers opt for its value conscious brands.

This impressive top and bottom line growth have been driven by stand-out performances from not only its own brands, especially Vaping (eg 88Vape) and Sports & Nutrition (+17%. Sci-MX, Sealions, Millions & Millions), but also its 3rd party brands (Lighting +21%, Batteries), the integration of past acquisitions, and the successful UK distribution agreement with Elfbar covering e-cigarettes.

Better still, input cost inflation has also eased. Which augmented by efficiency savings at its recently opened RDC in Trafford Park and further economies of scale - helped propel H1 Adj EPS to 8.1p (+80%) and enabled the Board to declare an 88% hike in the dividend to 1.5p.

Sure Sept’23 net debt came in at -£4.8m (<0.2x EBITDA) compared to +£3.2m 6 months earlier. Yet equally this simply reflected the initial working capital build for Elfbar and robust growth elsewhere.

Importantly too, Supreme PLC is fast becoming the sector’s ‘go-to voice’ for all things vaping. Having recently introduced best-in-class measures to stamp out underage use (eg plain packaging, flavours, retailer spot checks), as well as championing the adoption of re-usable pods.

Here the Government’s consultation process concerning e-cigarettes is due to conclude on 6th December. With SUP expecting policymakers to continue recognising the important role that vaping plays in achieving the country’s goal of becoming smoke-free. Plus, even if some left-field legislation was ever introduced, the Board has an enviable track record of being able to pivot quickly to embrace markedly different conditions.

Finally wrt the upside potential for investors - the stock (110p) trades on compelling FY’24 PER, EBIT & EBITDA multiples of 6.2x, 4.7x & 4.0x, whilst equally paying an est 4.5p dividend (4.1% yield). Similarly, I have raised my valuation to 225p/share from 200p before.

CEO Sandy Chadha commented: “As an industry leader, Supreme PLC acknowledges the wider concerns of youth vaping and remains fully supportive of any proactive measures or changes in legislation that potentially restricts specific products, packaging, flavours or point of sale in the UK."

"Looking ahead, H2 is shaping up to be another significant period for Supreme. The Group remains ideally placed to continue to deliver robust operational and financial progress as we strive to deliver ongoing profit momentum.”