According to the World Health Organization approximately 1.8m people die each year from lung cancer, including 35,000 in the UK. The vast majority of fatalities, around 80% in fact, are tragically caused by either direct or passive smoking.

One of most effective ways of encouraging hardened smokers to quit cigarettes is to switch them to vaping. That is why the NHS is in the process of handing out 1m free devices - indeed it's been proven that people are twice as likely to give up tobacco by using e-cigarettes, as opposed to other nicotine replacements such as patches or gum.

However the only problems with vaping is preventing underage usage and disposing of cartridges, which mostly contain hard-to-recycle lithium ion batteries. That dual issue has prompted current media speculation that the UK government will soon ban single-use devices.

But one leading vape manufacturer has been pre-empting this problem, Supreme (SUP), which as well as distributing vapes sells other everyday products across batteries, lighting, and sports & nutrition. It operates best-in-class regulatory compliance to stop underage vaping, conducting third-party testing to ensure products are consistently in compliance with all UK laws, and spot checking retail stores to ensure adequate age verification protocols are being implemented.

The company also announced today that - in addition to its existing non-disposable product range - it would soon launch its own rechargeable 88Vape pod system that is much better for the environment. 

In a brief trading update today, Supreme added that it remains on track to deliver "adjusted FY24 EBITDA in line with market expectations" of £25.6m. It also said it will "undertake a comprehensive review to measure the impact of any proposed changes across the medium to long term, once further clarity is provided."

At 96p, the stock trades on compelling FY24 PER, EBIT & EBITDA multiples of 7.1x, 5.2x & 4.4x, respectively, based on my forecasts of £25.5m and 13.5p in adjusted EBITDA and EPS on revenues up +16% to £181m. The associated sum-of-the-parts valuation remains unchanged at 195p a share.