Another Strong Performance by Nichols
Although group revenue remained flat at £55.1 million, UK soft drinks group Nichols managed to increase profit before tax by 9% to £9.0 million for the first half ended 30 June 2013.
Nichols’ brands portfolio includes Vimto, which is sold in more than 65 countries, and Levi Roots, Weight Watchers, Sunkist, Panda and Extreme Sports and Energy, which are sold in the UK. The group has a leading market position in both the ‘still’ and ‘carbonate’ drinks categories and also in the soft drinks on dispense market, where its brands include Cabana and Ben Shaws.
In recent years, Nichols’ UK margins have been under pressure from a combination of increased promotional activity and raw material cost inflation. However, its has been addressing this by reducing its promotional participation in the heavily discounted carbonate category and growing market share in the still category. At the half year this plan has been successful, delivering increased gross margin and cash profit compared to the prior year.
Nichols’ international sales grew by 2% on the prior year driven by further growth in its African markets, offset by lower sales of concentrate to theMiddle East.
John Nichols, non-executive chairman, comments: “UK consumer spending remains cautious and for the remainder of 2013 we expect the soft drinks market to be characterised by low volume growth and significant promotional activity. Against this backdrop, we are pleased with the group’s performance in the first half of 2013, in particular the success of our strategy to improve margin and increase profitability. “
He adds: “We expect group performance for the remainder of 2013 will be similar to the first half of the year and therefore anticipate the full year results will be in line with current expectations.”
