Priced as a vape distributor; the evidence says UK FMCG roll-up platform

• Mis-categorised. Vape was 56% of FY25 revenue and the market still treats it as the entire identity — SUP trades at 4.5x EV/EBITDA versus AG Barr at 11x and Nichols at 9.5x on identical 14% operating margins. Non-vape revenue reached roughly half the group at H1 FY26.
• The flywheel is real. Four bolt-ons closed in fourteen months — Clearly Drinks, Typhoo from administration, 1001 carpet care, SlimFast UK/Europe — at a disclosed 2-4x post-synergy EBITDA. FY25 ROCE held at 39.7% as the asset base nearly doubled.
• The number that resolves it. Non-vape gross profit needs to clear $54M at the FY26 print to force re-categorisation; FY25 ran at roughly $32M. Below $40M says the platform thesis is intellectually correct but economically inert.

30% ROIC, 0.3x leverage, 7.8x earnings — and FCF turns negative once you net out the deals

Headline cash conversion looks clean — three-year cumulative operating cash flow of $90.5M tops cumulative net income of $73.6M at 1.23x. Net $33.1M of FY25 acquisition spend against $32.5M of operating cash, however, and free cash flow flips to negative $4.7M while year-end cash dropped from $15.0M to $4.1M. The 36% gap to the five-year mean P/E either closes on FY26 mean-reversion or the cheap multiple is the market correctly pricing a debt-financed flywheel.

From battery distributor to vape windfall to deliberately diluted FMCG platform

Before: Sandy Chadha joined the family business in 1988 at sixteen and spent four decades quietly compounding cash on a base of household batteries (~35% UK share), licensed lighting and 88Vape e-liquid. AIM IPO landed February 2021 at $1.84 with revenue of $168M.

Pivot: Early 2023 the company signed a master-distribution agreement for ElfBar and Lost Mary disposable vapes. By FY24 disposables were 32% of group revenue at $90M and Adjusted EBITDA almost doubled to $48M. Management called the regulatory cliff early and pre-funded the diversification before it hit.

Today: The June 2025 UK disposable ban took effect on schedule, vape revenue still grew 13% in H1 FY26 as refillable pods absorbed the volume, and four bolt-ons in fourteen months rebuilt the company as a three-division platform. The next chapter is whether non-vape gross profit can double from $32M to $54M before the October 2026 vape excise levy lands.

Two prints inside seven months decide the rerating debate

• Mid-late June 2026 — FY26 full-year results. Three open questions resolve on one day: vape revenue durability versus the $167M FY25 base, non-vape gross profit run-rate, and whether acquisition-adjusted FCF returns to positive territory. Management has signposted ~$47M EBITDA on a 15% margin guide, down from FY25's 17.5% print.
• October-November 2026 — UK vape excise levy. The autumn fiscal event publishes the per-millilitre rate on refillable e-liquid and the treatment of pod systems versus disposables. Pod parity with disposables caps 56% of FY25 revenue at a 4-5x EBITDA multiple permanently; lighter pod treatment removes the largest overhang on the multiple.
• July-August 2026 — AGM credibility test. BDO faces an eleven-year reappointment vote with no internal audit function in place; the new one-year SIP that paid 93.33% of max gets its first advisory vote. Free-float dissent above 25% on either resolution forces a board commitment; below 10% confirms minorities accept the package.