Strength in Vimto brand underpins first half for Nichols

Soft drinks maker Nichols reported a 13.8% improvement in group revenue in its first half on Wednesday, to £67.4m.

The AIM-traded company said its adjusted operating profit was ahead 32.9% year-on-year in the six months ended 30 June at £9m, while its adjusted profit before tax grew by 31.6% to £8.9m.

Its adjusted profit before tax margin was 13.2% for the period, up 1.7 percentage points over a year earlier, while its EBITDA totalled £11.2m, 20.4% higher than the first half of 2020.

Basic adjusted earnings per share were up 30.7% at 19.52p, and at period end, the company had cash and cash equivalents of £47.4m, 0.2% higher than at the same time last year.

On the operational front, Nichols said the brand value of Vimto in the UK was up 2.7% for the year-to-date, with Vimto dilutes “significantly outperforming” the market.

UK revenue was up 5.5%, with out-of-home revenues broadly in line with the prior year, following an “encouraging” second quarter performance.

Vimto international growth, meanwhile, was 42.3% over the prior year, with the brand’s in-market Middle East volumes resilient through Ramadan, and full-year in-market volumes expected to remain in line with pre-sweetened beverage tax levels.

In Africa, Vimto delivered “strong” revenue growth of 22.8%, while the brand continued to progress across the rest of the world, delivering revenue growth of 49.3%.

Nichols said it was continuing to invest in UK operational change, in order to ensure continued agility and growth given future prospects.

It reported cash and cash equivalents of £47.4m at period end, in line with the £47.3m it had at the end of December, as the board declared an interim dividend of 9.8p.

The company left its financial guidance unchanged for 2021.

“The continued strong performance of the Vimto brand, the group's robust balance sheet and our diversified business model has ensured a resilient financial performance in the period with growth across each of our reporting segments,” said non-executive chairman John Nichols.

“The UK government's planned roadmap out of lockdown continues and although at a more cautious pace than originally planned, the group's positive start to the year means that we remain confident that it will achieve the board's expectations for the year.

“Longer term, the board is currently assessing the impact of inflationary pressures affecting logistics, labour, plastics and costs associated with increasing environmental legislation.”

At 0924 BST, shares in Nichols were up 3.66% at 1,492.75p.