Acquisition of Typhoo Tea for £10.2m

Supreme PLC has acquired the trade and selected assets of Typhoo Tea out of administration for a total cash consideration of £10.2m, including Typhoo’s stock and trade debtors with a book value of £7.5m.

For the year to 30th September 2024 Typhoo generated revenue of c.£20.0m, and a pre-tax loss of c.£4.6m. Supreme estimates that the acquisition will boost the annualised contribution from non-vape revenue to c.50% of total, and with full integration into Supreme’s cap-ex-light out-sourced manufacturing and distribution model, should contribute a 30% gross margin, which is in line with the Group’s recent Interim 29.6% margin. In August 2023 Typhoo had suffered from what it called “a group of organised trespassers” at its Merseyside factory which caused extensive damage and loss of stock resulting in £24.1m of exceptional costs. Typhoo entered administration on 28th November; Supreme has acted quickly to assess and act upon the opportunity created for its operations.

Supreme recently reported H1 25 results (ED report, ‘H1 25: margin improvement and FY25 outlook raised’) with revenue +8%YoY and a 22%YoY increase in (adj.) EBITDA reflecting cost control and gross margin improvement. As further details of the acquisition of Typhoo Tea emerge we will update our earnings outlook accordingly.