Vimto-maker Nichols reinstates dividend

Nichols is to reinstate its dividend, the soft drink manufacturer confirmed on Wednesday, despite reporting a slide in revenues after the Covid-19 pandemic dented global demand.

The owner of Vimto also announced that its chief executive, Marnie Millard, had resigned after seven years with the UK firm. She will be replaced by chief operating officer Andrew Milne from 1 January 2021.

Group revenue for the six months to 30 June fell 17% to £59.2m, while pre-tax profits tumbled 78% to £2.9m. Net cash, however, rose 14% to £46.8m, prompting the firm to announce an interim dividend of 28.0p, compared to a payout of 12.4p a year earlier.

The board withdrew the final 2019 dividend of 28.0p in March, citing uncertainties concerning the financial impact of Covid-19.

But Nichols said on Wednesday: “As a result of the adjusted profit after tax in the first half of 2020, and our strong cash performance, we are now able – with confidence – to reinstate the value of the final proposed dividend from 2019 as the interim dividend for 2020.”

Adjusted profit after tax came in at £6.8m, compared to £13.3m a year previously.

Nichols said revenue had been affected by Covid-19 in both the carbonates and still product categories, alongside the introduction of a sweetened beverage tax in the Middle East, although the Vimto brand had remained “resilient” during Ramadan. African sales grew nearly 9% to £8.3m.

In the UK, the out of home segment was effectively closed from 23 March, and a “large proportion” of its workforce was furloughed. The majority have now returned to work.

Looking ahead, chairman John Nichols said: “Uncertainty remains concerning the outlook for the second half, particularly in terms of the degree to which the out of home sector will recover, and the development of the pandemic in Africa.

“As a result, the board is still not in a position to provide financial guidance for the rest of 2202 and beyond.

“We remain confident in Nichols’ ability to emerge from this period well-placed to continue to deliver the group’s long-term strategic plans.”

Nichols also announced on Wednesday that it had entered into a relationship agreement with the founding Nichols family. Under the agreement, board representation of the family will be formalised but the company will continue to operate as an independent business, Nichols said. As part of the agreement, James Nichols joins John Nichols on the board.