Last checked at 14 Mar 2023 14:30
14 March 2023
Supreme plc
("Supreme," the "Company" or the "Group")
Disposal of the IP of T-Juice
- €4.5 million upfront payment for the IP of T-Juice brand and ongoing consultancy services provides additional financing for the Group;
- New strategic partnership for exclusive manufacturing rights to T-Juice brand;
- A minimum of €15 million of revenue over five years under partnership, with adjusted earnings profile of the Group largely unchanged following these arrangements.
Supreme (AIM:SUP), a leading manufacturer, supplier, and brand owner of fast-moving consumer products, is pleased to announce it has entered into an agreement for the disposal of the intellectual property ("IP") of T-Juice (including the Red Astaire brand), to an associated company of La Vape Professional Distribution ("LVP"), one of France's largest wholesalers of electronic cigarettes and e-liquids with €4.5 million payable on completion.
Supreme and LVP have entered into a new strategic partnership under which Supreme retains the exclusive manufacturing rights to T-Juice with minimum €15 million of revenue over five years for Supreme (together "the Agreements"). Consequently, the adjusted earnings profile is largely unchanged following the Agreements. The brand was originally acquired as part of the Cuts Ice asset deal which completed in August 2022 where the total value of the intangible assets acquired was £1.4 million.
Strategic Rationale
· The Agreements enable Supreme to focus on its core manufacturing expertise and margin expansion
· De-risks both European distribution and expansion, while simplifying Supreme's costs to serve to one customer, LVP
· Under the Agreements, Supreme retains the flavour development and flavour manufacturing responsibility, ensuring it continues to generate supply chain synergies as originally outlined
· A strategic partnership with LVP provides future cross-sell opportunities for the wider Supreme portfolio
Sandy Chadha, Chief Executive Officer of Supreme, commented:
"We are delighted to be entering into a long-term partnership with LVP, who are ideally placed to fully capitalise on the strength of the brand across Europe given their extensive and well-established distribution. These agreements will enable Supreme to do what it does best - to further leverage our manufacturing footprint and maximise our margin potential across our product mix in the near term. Not only does this deliver a significant return on our initial investment, but we have secured a highly lucrative five-year manufacturing agreement, which ensures Supreme remains well positioned to fully capitalise with LVP on their established European market presence and sales footprint."
The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 which is part of UK law by virtue of the European Union (withdrawal) Act 2018. Upon the publication of this announcement, this inside information is now considered to be in the public domain.
Enquiries:
Supreme plc Sandy Chadha, Chief Executive Officer Suzanne Smith, Chief Finance Officer
| via Vigo Consulting |
Grant Thornton UK LLP (Nominated Adviser) Samantha Harrison / Harrison Clarke / Samuel Littler
| +44 (0)20 7383 5100 |
Berenberg (Broker) Chris Bowman / Mark Whitmore / Mara Grasso
| +44 (0)20 3207 7800 |
Vigo Consulting (Financial Public Relations) Jeremy Garcia / Kendall Hill supreme@vigoconsulting.com | +44 (0)20 7390 0230 |
About Supreme
Supreme supplies products across five key categories; batteries, lighting, vaping, sports nutrition & wellness, and branded household consumer goods. The Company's capabilities span from product development and manufacturing through to its extensive retail distribution network and direct to consumer capabilities. This vertically integrated platform provides an excellent route to market for well-known brands and products.
The Group has over 3,300 active business accounts with retail customers who manage over 10,000 branded retail outlets. Customers include B&M, Home Bargains, Poundland, Tesco, Sainsburys, Morrisons, Amazon, The Range, Costcutter, Asda, Halfords, Iceland and HM Prison & Probation Service.
In addition to distributing globally-recognised brands such as Duracell, Energizer and Panasonic, and supplying lighting products exclusively under the Energizer, Eveready, Black & Decker and JCB licences across 45 countries, Supreme has also developed brands in-house, most notably 88Vape and has a growing footprint in Sports Nutrition and Wellness via its principal brands Sci-MX and Battle Bites.
www.investors.supreme.co.uk