(Correcting dividend information.)

Supreme PLC on Tuesday expressed optimism in its outlook, buoyed by vaping products, despite reporting a big profit drop.

The Manchester-based firm manufactures and distributes battery, lighting and vaping products.

For the six months to September 30, pretax profit fell 48% to £4.4 million from £8.5 million a year ago. Revenue climbed 5.7% to £64.6 million from £61.1 million.

Shares in Supreme were down 3.0% to 105.75 pence each in London on Tuesday afternoon.

However, administrative expenses increased by 43% to £13.4 million from £9.4 million. Cost of sales widened by 8.2% to £46.5 million from £43.0 million. The company also incurred an adjusted items cost of £1.4 million, compared to a gain of £42,000.

Last year at the interim stage, Supreme had declared a maiden dividend of 2.2 pence per share. It cut this to 0.8p for the recent half-year, explaining this was in line with its policy of paying out 25% of after-tax profit.

Looking forward, Supreme said it had a positive start to the second half of its financial year 2023, which started in October. ‘The business continues to navigate global trading challenges arising from raw material cost price increases, and inflationary increases to its overhead base,’ it assured.

The company is confident in the medium to long-term growth prospects for Supreme, it said.

‘Pleasingly, the business has delivered a solid trading performance in the period, buoyed by excellent sales growth from within our Vaping category. The additional expansion of our Vaping and Sports Nutrition & Wellness product portfolios, combined with our enhanced retail and online footprint and the rationalisation of our manufacturing operations, continues to support our value consumer proposition,’ said Chief Executive Officer Sandy Chadha.

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