Vimto brand helps sustain drinks group through tumultuous year
Nichols, the soft drinks company which includes the iconic Vimto brand, has seen revenues and profits slide as a result of the coronavirus impact.
In annual results released today, the Newton-le-Willows-based group revealed turnover of £118.7m for the year to December 31, 2020, a fall of 19.3%, and pre-tax profits of £6.5m, down 79.8% from £32.4m the previous year.
The proposed final dividend has been slashed from 28p per share to 8.8p per share.
Ahead of the pandemic, the group was achieving good revenue growth with a 6.2% increase in the first quarter versus the prior year.
The arrival of the pandemic at the end of the quarter was a watershed moment for the year. The introduction of social distancing, the enforced closure of the group’s Out of Home (OoH)customers and the various lockdown measures introduced across the globe materially impacted the business.
Revenues between quarters two and four were 26.1% lower compared with the prior year.
The Still and Carbonates product categories were impacted significantly by the pandemic, predominantly as a result of the enforced closures of the group’s OoH customers. Revenue of Still products decreased by 8.3% to £65.7m (2019: £71.7m). Revenue from Carbonates was down 29.7% to £53.0m (2019: £75.3m) as outlets closed and impulse sales reduced.
In the UK, revenue decreased by 22.0% to £91.6m (2019: £117.5m) driven by a 61.4% reduction within the OoH sector.
However, within this, the Vimto brand’s value increased by 6.7% against a soft drinks market performance of +2.5%, reflecting further market share gains.
Sales across international markets were £27.0m (2019: £29.5m). This represented a year-on-year decrease of 8.3%.
Despite COVID-19 restrictions in the Middle East the Vimto brand was resilient throughout Ramadan and ‘in-market’ sales were broadly in line with the prior year.
This performance, combined with African sales growth of 7.4% to £14.0m (2019: £13.0m) and rest of world sales growth of 17.3% to £5.7m (2019: £4.9m), demonstrates the continuing strength of the Vimto brand internationally.
In November last year, Nichols revealed that it had opened talks with its workforce over redundancies due to the impact of the pandemic.
Meanwhile, Andrew Milne was appointed group chief executive from January 1, 2021, replacing Marnie Millard. David Rattigan was also appointed as new chief financial officer, replacing Tim Croston, last March.
Non-executive chairman, John Nichols, said: “The COVID-19 pandemic presented us with unequalled challenges in 2020 and our first and most important objective through this unprecedented period has been the protection and wellbeing of our employees and customers.
“Throughout these difficult times, our colleagues have consistently demonstrated their values and commitment to our business, and I would like to wholeheartedly thank everyone for their efforts.
“The strength of the Vimto brand, the group’s robust balance sheet and our diversified business model has ensured a resilient financial performance in the period, despite the challenging trading conditions across our markets.
“We have achieved significant outperformance from the Vimto brand in the UK, solid growth in Africa and a good performance in the Middle East despite the impact of the recently introduced Sweetened Beverage Tax (SBT) and COVID-19 restrictions.”
He added: “Whilst recognising the current and near-term impact of the pandemic on the soft drinks market, the board continues to believe that Nichols, underpinned by the strength of the Vimto brand, the group’s diversified business model and the skill and commitment of our colleagues, remains well placed to deliver its long term strategic ambitions. Given the continued near term uncertainty, 2021 guidance remains withdrawn.”