Typhoo Tea rescue deal eyed up by vapes giant Supreme
Supreme, which sells products such as vapes and vitamins, is eyeing up a rescue deal for Typhoo Tea after the 120-year-old brand collapsed into administration.
Greater Manchester-headquartered Supreme has confirmed it is “currently participating in a process regarding the potential acquisition” and added that discussions are at ‘an advanced stage”.
However, the company said that no final terms have been agreed but that a potential offer “would be funded by Supreme’s existing bank facilities”.
In a statement issued to the London Stock Exchange, AIM-listed Supreme said: “The board of Supreme can confirm that it is currently participating in a process regarding the potential acquisition of Typhoo Tea.
“Whilst discussions with the administrators are now at an advanced stage, there can be no certainty that the potential acquisition will be completed.
“No final terms of the potential acquisition have been agreed but the company can however confirm that any potential offer would be funded by Supreme’s existing bank facilities.
“Further announcements will be made as and when appropriate.”
In its half-year results, Supreme posted a revenue of £113m, up eight per cent, and a pre-tax profit of £12.9m, a five per cent rise.
The update comes after Kroll was appointed to oversee the administration of Typhoo Tea.
The Bristol-headquartered business made a loss of almost £40m in the year to 30 September, 2023, after trespassers caused “extensive damage” to its Merseyside factory.
The company incurred one-off costs of more than £20m after its Moreton factory was broken into and occupied for several days during August 2023.
As a result, Typhoo Tea reported a pre-tax loss of £37.9m for the year, compared to a loss of £9.6m in the prior 12 months.
Its revenue also fell from £33.6m to £25.3m over the same period.
The last time Typhoo Tea made a pre-tax profit was the £220,000 it posted in the year to March 31, 2017. Since then, the company has made over £100m in pre-tax losses.
A spokesman for Kroll, in a statement issued before the Supreme talks were made public, said: “As reported recently, the company has experienced significant cash flow constraints as a result of supply chain disruptions and subsequent service issues.
“The company has been exploring a sale of the business and assets which is in the process of concluding.
“The administration process provides Typhoo Tea with protection, allowing the joint administrators to finalise the sale in order to rescue the business.”