Nichols plc
2023 PRELIMINARY RESULTS
Strong performance underpinned by diversified business model and core Vimto brand
Nichols plc (‘Nichols’, the ‘Company’ or the ‘Group’), the diversified soft drinks group, announces its Preliminary Results for the year ended 31 December 2023 (the ‘Period’).
| Year ended31 December 2023 | Year ended31 December 2022 | Movement | |
| Group Revenue | £170.7m | £164.9m | +3.5% |
| Adjusted Profit Before Tax (PBT)1 | £27.2m | £25.0m | +8.7% |
| Profit Before Tax (PBT) | £24.3m | £13.8m | +75.3% |
| Adjusted PBT Margin1 | 15.9% | 15.1% | +0.8ppts |
| PBT Margin | 14.2% | 8.4% | +5.8ppts |
| EBITDA2 | £24.7m | £26.9m | (8.1%) |
| Adjusted earnings per share (basic)1 | 56.41p | 55.38p | +1.9% |
| Earnings per share (basic) | 50.34p | 31.86p | +58.0% |
| Cash and cash equivalents | £67.0m | £56.3m | +19.0% |
| Free Cash Flow3 (FCF) | £20.9m | £14.6m | +43.1% |
| Adjusted Return on Capital Employed4 | 26.3% | 27.2% | (0.9ppts) |
| Return on Capital Employed5 | 23.3% | 14.2% | +9.1ppts |
| Proposed Final Dividend | 15.6p | 15.3p | +2.0% |
| Total Dividend | 28.2p | 27.7p | +1.8% |
Financial Highlights
· Revenue +3.5% at £170.7m (2022: £164.9m)
o Overall Packaged business revenue increased by +6.1%
§ International Packaged revenue increased by +16.8% with double digit growth in all geographic segments
§ UK Packaged revenue increased by +1.3%
o Out of Home (“OoH”) business revenue decreased by -3.4% in line with revised strategy post restructuring
§ As anticipated following exit from unprofitable accounts
· Gross Margin of 42.3% (2022: 43.1%)
o UK Packaged gross margin maintained despite inflationary pressures
o Market mix resulted in lower percentage margin
· Adjusted Operating Profit increased by +£0.6m (+2.4%)
o Investment made across the Group to prepare for further growth, including distribution channels within the International Packaged business, additional marketing and enhanced operational capabilities
o Savings in overheads associated with restructured OoH business
· Adjusted Operating Margin maintained at 14.8% (2022: 14.9%)
· Adjusted Profit before Tax +8.7% to £27.2m
· Exceptional items: Net charge of £2.9m (2022: £11.1m)
o Costs associated with restructuring OoH and Business Change Programme and Systems Development
· Strong FCF of £20.9m (2022: £14.6m) resulting in cash and cash equivalents of £67.0m (2022: £56.3m)
o Assessment of forward cash and investment requirements
o Identification of surplus cash in order to return to shareholders during 2024
· Final dividend proposed at 15.6p (2022: 15.3p). Total dividend of 28.2p (2022: 27.7p).
Strategic and Operational Highlights
· Strong growth across our Packaged business from continued investment in our brands, including product range extension and geographical expansion
o Continued strong progress in international markets reflecting strong market penetration across existing and new territories in Africa and the Middle East
o Celebrated 100th Ramadan season during 2023 with outstanding in-store displays that generated increased consumer engagement and purchases
· Successful mitigation of the strong inflationary headwinds
· OoH division realising benefits from the strategic review earlier than expected
o Restructuring refocuses the business on profitability and reduces overall scale and complexity
· Progress against ESG strategy (‘Happier Future’)
o New responsible sourcing policy with supplier code of conduct
o Roadmap for Scope 3 emissions established
Current Trading and Outlook
· 2024 trading has started well, with a performance in line with management expectations
· The Company remains confident in its ability to deliver further strategic progress across its business in FY24
Andrew Milne, Chief Executive Officer of Nichols, commented:
“2023 was a year of strong progress and execution for Nichols, as the Packaged business delivered another year of growth underpinned by the Vimto brand, and benefits from the newly streamlined OoH business were delivered earlier than anticipated. The Group delivered a very strong performance in international markets driven by strong market penetration across existing and new territories in Africa and the Middle East. Innovation remained a critical growth driver and we have an exciting pipeline of new products planned for 2024.
Building on the progress achieved in 2023, I am confident about our prospects for 2024 and the well-defined strategy we have in place to drive further growth. Our diversified business model provides the foundation for continued success, reinforced by our well-established portfolio of owned and licensed brands, the close partnerships we have with our suppliers and customers and our long-term strategic focus. These strengths, coupled with a resilient soft drinks market and the dedication of our people, will enable us to continue to deliver value to shareholders.”
References:
1 Excluding exceptional items
2 EBITDA is the profit before tax, interest, depreciation and amortisation
3 Free Cash Flow is the net increase in cash and cash equivalents before acquisition funding and dividends
4 Adjusted return on capital employed is the adjusted operating profit divided by the average period-end capital employed
5 Return on capital employed is the operating profit divided by the average period-end capital employed
Contacts
| Nichols plcAndrew Milne, Chief Executive OfficerDavid Taylor, Interim Chief Financial OfficerRichard Newman, Chief Financial Officer Designate | Telephone: 0192 522 2222 |
| Singer Capital Markets (NOMAD & Broker)Steve Pearce / Jen Boorer | Telephone: 0207 496 3000Website: www.singercm.com |
| Hudson Sandler (Financial PR)Alex Brennan / Hattie Dreyfus / Harry Griffiths | Telephone: 0207 796 4133Email: nichols@hudsonsandler.com |