Vimto maker Nichols posts first half revenue and profits improvements
Soft drinks group Nichols has reported better interim revenues and profits for the Newton-le-Willows-based maker of the iconic Vimto brand.
Sales in the six months to June 30, 2022, were £80.232m, up from £67.392m.
UK revenues increased by 29.3% to £62.6m. However, international revenues were down by 7.2% to £17.6m. This was due to the phasing of Middle East shipments to the second half of the year, national driver industrial action in Spain, and US shipments being constrained through 2022 due to ongoing container shortages.
A pre-tax profit of £10.097m was an improvement on the previous year’s profit of £8.630m.
An interim dividend of 12.4p per share represents a 26.5% increase for shareholders.
The group incurred an exceptional charge of £1.2m largely relating to it operational change programme.
Nichols said it has strong cash and cash equivalents of £49.2m, although this was down from £56.7m at December 31, 2021.
The group has also completed its share buyback programme, worth £5.5m.
It said its 2022 expectations for an adjusted profit before tax of £25.2m remain unchanged, despite significant and accelerating inflationary pressures, particularly ingredient and packaging costs, with customer, supplier and operational mitigation actions under way.
Executive chairman, John Nichols, said: “I’m pleased to report an encouraging financial performance in the first half of the year with 27% increases to both adjusted PBT and the half year dividend.
“In the UK, the Vimto brand continues to outperform the broader squash market, and the group’s out of home route to market experienced good growth as the wider leisure sector continues to recover from the impact of the pandemic.
“After some disruption to shipments affecting our international business in Q1, I am pleased to report a recovery in Q2 which has so far continued into the second half of the year.”
He added: “Whilst the group is not immune to the significant and accelerating inflationary pressures impacting the consumer and the soft drinks market, we have taken swift mitigating actions where possible and the group’s adjusted PBT expectations for the full year remain unchanged.
“The board remains mindful of the potential earnings impact of continued inflation into FY23 and beyond. We have a long term track record of growth, a proven, diversified strategy, and a quality range of brands.
“All of this is underpinned by a strong balance sheet. As a result, the board remains confident that the group is well positioned to deliver its long term growth plans.”
