By Michael Susin
Supreme PLC shares have rebounded after the company assured investors that its outlook for fiscal 2025 will not be affected by the U.K. government’s recent proposal to ban disposable vaping devices.
At 1531 GMT, shares were up 7.1% to 112.5 pence, recovering from an earlier decline of 17%. On a 12-month basis, shares have seen a 2.3% increase.
The U.K.-based consumer-products manufacturer announced on Monday that it expects a temporary increase in revenue as a result of the planned ban on disposable vapes by the end of 2025. The company anticipates that retailers will introduce alternative vaping devices such as pod-system vaping devices and refillable vape kits.
“Supreme remains ahead of the curve and welcomes the government’s decision. We have already taken several proactive measures, including narrowing down and renaming flavors, as well as adapting packaging, as part of our commitment to eliminate underage vaping,” the company stated.
According to Supreme, disposable vapes are projected to contribute approximately £75 million ($95.3 million), or 33% of revenue for fiscal 2024. This estimate represents an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of £9 million.
The group forecasts that its revenue for fiscal 2024 ending on March 31 will surpass market expectations, reaching at least £225 million, while adjusted EBITDA is expected to double to at least £38 million, outperforming the estimated range of £32 million to £35 million.
Demonstrating confidence in the company’s future prospects, Supreme has proposed a £1 million share buyback program.