MIDAS SHARE TIPS: In Surpreme good health The vaping to protein shake firm aiming to become a £1bn business

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Sandy Chadha did not do well in school. Subjected to bullying and stunned by dyslexia, he left without qualification and joined his father’s firm, Supreme, which sold radios and watches in Manchester.

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That was 30 years ago – and the business was struggling. Today Supreme is worth more than £120 million a year, following a listing on the London Stock Exchange’s Junior AIM market in February, is valued at £220 million and Chadha is determined to turn it into a £1 billion business .

The shares are worth £1.87 and should rise significantly in price as Chadha attempts to achieve his ambition.

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Spending a fortune: Supreme’s latest, and perhaps most ambitious, venture is its foray into the world of vitamins and wellness.

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Chaddha got her big break in the early 1990s when she started selling batteries.

While watches and radios were only stocked by a few retailers, batteries could be found in stores large and small, from corner stores to major DIY groups.

Chadha sold his goods to as many people as he could and became supremely prosperous.

The group then went into licensing, signing contracts with the likes of Philips and JCB, to sell batteries under the names of these well-known firms. Deals, which continue to this day, allow consumers to buy branded goods at affordable prices.

The idea worked so well that Chaddha went into lightbulb licensing, with firms like Eveready and Energizer.

Today, Supreme sells more than 1,000 products under license to thousands of stores, including discounters such as B&M and Home Bargains, as well as supermarkets such as Tesco, Morrisons and Asda.

Few business owners would have been happy to stay there. But Chaddha is a born entrepreneur and, in 2014, he switched to vaping, at that time still in its infancy.

Realizing that this was another area where he could make his mark, Chadha decided to create 88vape, his own brand of Supreme.

The group is now a leader in the segment with 30 per cent market share and over 10 per cent growth per annum.

From its headquarters in Manchester’s Trafford Park, Supreme dispenses about 300,000 bottles of vapor liquid a day, helping millions of smokers quit the habit.

Supreme even considers Prison and Probation Service as one of its major customers. Riots erupted among nicotine-addicted convicts after a smoking ban in prison, with the service agreeing to allow e-cigarettes.

Star Supporter: Davina McCall Promotes Supreme K Vitamins

Star Supporter: Davina McCall Promotes Supreme K Vitamins

With around 100,000 prisoners across the UK, at least 80 per cent of whom describe themselves as smokers, the demand for vaping products is huge and the inmates’ brand of choice is 88vape.

Supreme’s latest, and perhaps most ambitious, venture is its foray into the world of vitamins and wellness.

Even before the pandemic, British consumers were spending a lot of money on vitamins and supplements. Now they are buying even more, with sales expected to be around £1 billion this year.

Most of these pills and drugs are very expensive, so Chadha felt the market was ready for a revolution.

After setting up an online business for 88vape, they’ve done the same with vitamins, offering the popular vitamin supply in plastic-free pouches for just £5.

The company has created its own wellness brand, Sealions, and sales are growing at more than 30 percent a year.

Protein shakes and bars are also on the agenda and Chadha hopes to build a thriving online health shop in the next few years.

At the same time, the company is launching a vitamin range for its retail customers.

Known as Lakhs & Lakhs and pioneered by TV personality Davina McCall, the brand is already on offer at discount stores and should be introduced more widely later this year.

To some observers, Apex may appear to be moving very rapidly and in too many directions. But the group’s results are strong and the broker is optimistic about the future.

Turnover increased by 33 percent to £122 million by the end of March 2021, and the group estimates sales of £128million this fiscal year, increasing to £137million in 2022-3.

Pre-tax profit fell slightly year-on-year to £13 million in February due to listing-related costs on AIM, but figures are expected to return strongly.

Supreme also intends to pay dividend in this financial year and brokers have penciled in 6.6p, which has increased to 7.6p a year later.

Midas Verdict: Supreme has grown steadily for over three decades, never taking a loss and borrowing almost nothing from the bank. But the best is yet to come.

Chadha, who is in his early 50s, is a man of tremendous energy and drive, his team is well selected and getting listed on AIM gives further impetus to the business. At £1.87, the shares are a buy.

traded on: aim Ticker: swell contact: Supreme.co.uk or 0161 872 5151

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