Economic downturns are all different, but one common theme is that the best run companies tend to punch above their weight and outperform rivals.
Take UK FMCG products group Supreme PLC, that owns and distributes many iconic brands across Drinks (Typhoo Tea), Wellness (SlimFast UK), Vaping (88Vape), Electricals & Household (1001). These non-perishable (& ambient) products are sold to over 3,000 retailers, and offer a rich blend of both quality and affordability that satisfies even the most budget conscious tastes.
Exactly the type of goods needed during today’s tough macro conditions with the latest ASDA income tracker saying that the spending power of low (-9.5%) and middle (-2.5%) income households continues to decline.
Nonetheless Supreme is bucking the trend – this morning posting positive H1’26 results and in line March FY’26 guidance with revenues climbing 17% (3.7% LFL) to £132.6m.
Elsewhere EBITDA came in flat at £18.5m (14.0% margin vs 16.4% LY) with adjusted PBT falling -13% due to headwinds in lighting (lower LED prices) & batteries (Panasonic exit), alongside incurring duplicate overheads reflecting recent M&A (re Typhoo Tea). That said, this profit reset should only be temporary, as costs will be right-sized in line with the delivery of planned integration synergies.
For instance, I suspect the £20.1m purchase of weight-loss brand SlimFast in October, will ultimately generate 20%+ EBITDA margins on revenues of >£25m in FY27.
Elsewhere, Supreme PLC has successfully transitioned to vaping pods and other alternatives following the 1 June 2025 ban on disposables. Whilst in terms of valuation, the stock at 168p trades on compelling EV/EVITDA, EV/EBIT and PE multiples of 6.1x, 7.4x and 8.4x respectively – sporting a 3.0% dividend yield to boot with Equity Development instead valuing hashtag#SUP at 237p/share. Sept H1 net debt (excl IFRS16 leases) closed at a comfortable £4.1m.
CEO Sandy Chadha commenting: “I’m delighted to report another period of sales growth supported by organic growth coupled with the positive impact from acquisitions. Supreme is now home to over 40 brands and licenses, including Typhoo, SlimFast and 1001, with access to an extensive retail footprint. This unique market reach will continue to enable the business to further leverage our growing product portfolio, alongside developing new products to further expand our market share. Following a solid start in H1, Supreme expects trading for FY‘26 to be in line with market expectations (ie £37m adjusted EBITDA on £245m of sales).”
Disclosure: Supreme PLC is a Vox Markets client.