Supreme Imports, the manufacturer of vaping brands 88vape and KiK, has announced plans to float on AIM next month, targeting a valuation of £120m-£140m.

City interest in Supreme, which also manufactures batteries and lightbulbs, took off after vaping regulations were resolved in May 2017, said CEO Sandy Chadha.

“Before the regulations were finalised I don’t think any investors would have taken the risk.

“We will be the first UK-listed vaping business so will see ourselves as the spokesperson for the industry, but we will also use it to raise money for a new factory, to potentially fund acquisitions and also raise the profile of the whole business,” he said.

Supreme plans to continue growth in the retail sector and is currently in talks with a number of high street chains.

Current stockists include Asda, Iceland, B&M, Home Bargains and Heron Foods, as well as wholesalers Booker and Bestway.

Chadha added: “We are also a lot bigger now as a company. We are now producing 40-odd million bottles of e-liquid a year which makes us probably one of the biggest producers in the country. We are very dominant in discount retail and now we have started to do more in convenience and mainstream retail, including Asda.”

The total vaping market is tipped to exceed £2bn by 2020, while tough legislation and changing habits has seen over £300m disappear from the cigarette industry in the past year [Nielsen].

Volumes of e-cigarettes sold increased by 5.7% in 2017, and the five biggest selling e-cigarette devices in the UK are now owned by big tobacco firms, but Supreme’s sales have outperformed.

In the year ending March 31 2017, Supreme’s sales reached £70.7m with a CAGR of 29% between 2015 and 2017.

The business has continued to grow by 50% over the past year, according to Chadha, and has seen a 40% growth in like-for-like retail sales. In its last financial year, Supreme also sold roughly 35 million lighting products and 200 million batteries.

As tobacco sales tumble, major tobacco brands have acquired or launched vaping brands, as well as heated tobacco devices. Philip Morris International, for example, started the year by announcing its ambition to stop selling cigarettes in the UK, pushing its smokeless products including e-cigarettes.