UK saves the day for Vimto maker

Vimto

Vimto manufacturer Nichols has seen a small rise in revenues and profits over the last 12 months.

The firm, which has its headquarters in Newton-le-Willows, saw group revenues increase by 2.3% to £65m. As a result operating profit rose 2.7% to £13.1m.

Total Group revenue increased by 2.3% in the first six months of 2018, driven by a strong performance from the UK business.

UK sales totalled £53.8m in the period, an increase of 13.2% compared to the prior year.

The Vimto brand, which is 110 years old this year, continued to significantly outperform the market.

Year to date sales of Vimto are up 9% compared to the total UK market which increased by 3.7%.

Elsewhere in the UK, Out of Home revenue increased by 13.6%, with the growth coming from both dispense and frozen product sales.

The UK growth was delivered in both the still and fizzy drinks.

Total international sales were in line with expectations at £11.2m, £4.8m lower than the same period in 2017.

The reduction is a result of lower sales to the Middle East due to the ongoing conflict in Yemen and the timing of shipments to Saudi Arabia.

Elsewhere in the international business, sales to Africa totalled £6.8m a fall of 3.7%.

The firm has announces an interim dividend of 11.3 pence per share, an increase of 11.9% compared to the previous year.

The board said it is pleased with the Group’s trading performance in the first half of 2018.

John Nichols, non-executive chairman, said: “Nichols has delivered a solid performance in the first half of 2018 with growth in revenue, profit before tax and earnings per share.

“The performance during the first half is testament to the benefits of Nichols’ diversified business model.

“The strong sales performance in the UK was driven by the strength of the Vimto brand, which continues to outperform the wider market, and we expect this momentum to continue following the launch of an exciting new marketing campaign in May.

“We have been managing the widely reported market challenges in the Middle East and as a result, the board is confident of delivering full year results in line with expectations.”

Chris Wickham, analyst at Equity Development said: “It was very much a case of “UK saves the day” for Nichols’ first half results.

“Flagship brand Vimto stormed ahead to show 9% growth year to date as the group gained market share overall. But international slipped, largely for conflict related reasons, as both Middle East and Africa recorded lower sales than a year earlier.

“Overall, management is optimistic about recovery prospects with guidance maintained and its interim dividend increased by a sizeable 12%. And there is more good weather in prospect, which even a North West based soft drinks company like Nichols looks set to enjoy.”

Click here to sign up to receive our new South West business news...
Close