Nichols PLC 2022 Interim Results

Nichols Plc                                                 

2022 INTERIM RESULTS

Encouraging revenue and earnings growth as Out of Home recovers from the pandemic

Nichols plc ('Nichols' or the 'Group'), the diversified soft drinks Group, announces its unaudited Interim Results for the half year ended 30 June 2022 (the 'period').

Vimto Brand value in the UK +5.7%⁵

• Vimto continues to outperform the dilutes market, by +9.1%⁵

UK revenues increased by 29.3% to £62.6m (H1 2021: £48.4m)

• UK Packaged route to market volume flat versus UK soft drinks down 4.3% as consumer spending slows

Out of Home (OoH) continues to recover from the pandemic, with revenues +131.9%

• Strategic review of OoH progressing
• International revenues -7.2% to £17.6m (H1 2021: £19.0m), (Q2 +4%)

Middle East phasing of shipments largely weighted to H2

In-market' volume of cordial Oct to Apr, +10%, post completion of marketing investment

• Continued progress in Africa, +2.0%
• Q2 +11%, Q1 -4% impacted by national driver industrial action in Spain  

US shipments constrained through 2022 due to ongoing container shortages

• Gross margin 42.8% (H1 2021: 44.4%)

Higher proportion of lower margin UK carbonate revenues as OoH recovers

• Exceptional charge of £1.2m largely relating to Operational Change Programme

Transfer of Dilutes contract manufacturing successfully completed

• Strong cash and cash equivalents at £49.2m (31 December 2021: £56.7m)

Completion of the Group's treasury share buyback programme (H1 2022 spend £5.5m)

• Facilitates the Group's SAYE Option Scheme and/or Long-Term Incentive Plan

Renewed post pandemic working capital investment, net £5.9m outflow

• Interim dividend of 12.4p, +26.5% (H1 2021: 9.8p)
• 2022 Group expectations⁶ remain unchanged 

Significant and accelerating inflationary pressures, particularly ingredient and packaging costs

Customer, supplier and operational mitigation actions underway

1 Excluding Exceptional items of £1.2m (H1 2021: £0.3m)

2 EBITDA is the statutory profit before tax, interest, depreciation, and amortisation

3 The comparison is to 31 December 2021. All other comparatives compare to the six months ending 30 June 2021 unless otherwise stated

4 Return on Capital Employed is the rolling 12 months adjusted operating profit as a percentage of the average period-end capital employed, excluding the effect of Goodwill impairment

5 Source: Nielsen IQ RMS data for the Total Soft Drinks category for the YTD ending 18 June 2022 for the GB Total Coverage market

6 FY22 expectations refers to a Group compiled market consensus of adjusted PBT 25.2m

John Nichols, Non-Executive Chairman, commented:

“I'm pleased to report an encouraging financial performance in the first half of the year with 27% increases to both Adjusted PBT¹ 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.

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 PBT¹ expectations² 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.”