Supreme eyes AIM float funds to power up battery and vaping growth

E-cigarette liquid manufacturer and battery distributor Supreme plans to raise some new cash as it floats on London's AIM junior market next month, with Grant Thornton as nominated adviser and Berenberg broker.

Manchester-based Supreme, which is principally focussed on the supply of batteries, lighting and vaping products, is aiming to raise around £10m of new cash, with chief executive Sandy Chadha also selling some of his 100% stake, according to a source with knowledge of the initial public offer.

The flotation comes as the company is looking to build on its solid, cash-generative battery and lighting divisions by broadening its customer base in the UK and internationally and expanding into new verticals such as sports nutrition and leverage existing distribution and customer relationships with well-known global brands such as Duracell, Panasonic, Eveready, Energizer, and JCB.

Any new funds are expected to be partly used to pay down debt and fund the expansion of their Manchester based vaping e-liquid manufacturing plant. This plant manufactured an average of over 130,000 bottles of e-liquid per day at its cleanroom manufacturing facility during March 2018, which Chadha said makes it one of the largest producers of vaping e-liquids in the UK by volume.

In the year ended 31 March 2017, Supreme generated revenues of £70.7m, up 20% on the previous year, as it sold more than 200m batteries and 35m lighting products to customers including discount retail, wholesale, independent retail, supermarket and export sectors. Earnings before income and tax came increased 22% to £7.2m.

Chadha, who plans to sell roughly 25-40% of his shares, said: "Over the last two decades we have established Supreme as a leading manufacturer and distributor of batteries and lighting, and more recently vaping, demonstrating our ability to leverage our extensive distributor and customer relationships to drive growth.

"With a track-record of growing revenues, achieving long-term profitability and strong cash generation, we remain well-placed to build upon this."