Nichols Q1 revenue rises amid strong international performance

In a brief statement ahead of its annual general meeting, the company said total group revenue in the first quarter of 2019 rose 10.1% from the same period a year ago to £30.6m.

International sales were up 24.4% from Q118 to £6.5m as the Middle East returned to growth following the relatively softer comparatives last year. In the UK, meanwhile, sales were up 6.8% at £24.1m.

"Whilst we believe that trading conditions will remain challenging in 2019, we anticipate that full year earnings will be in line with market expectations," Nichols said.

Shore Capital analyst Alex Smith said: "Although we view this as a strong start to the year, as per the group’s cautionary comments on the outlook, the UK faces demanding weather related comps whilst also having benefited from last year’s CO2 shortage, whilst there is no certainty of further delivery of shipments to Yemen.

"Consensus currently has FY19E profit before tax at £32.9m (up +3.5% on 2018) and earnings per share of 72.6p (up +5.0% versus 2018)."

Numis also said the update signals a positive start to the year. "This momentum is encouraging, but it should be remembered that Q1 is a relatively quiet month for soft drinks and that the majority of the growth was driven by a return to normal trading in the Middle East.

"As such, we are not extrapolating the Q1 performance for FY 2019 and maintain forecasts for 3.8% adjusted profit before tax growth to £33.0m in FY 2019e. Given the current rating of 24.3x price-to-earnings and limited growth prospects, we see limited reasons to change our hold rating."

At 1020 BST, the shares were down 0.1% at 1,780p.