Nichols plc
INTERIM RESULTS
Nichols plc ('Nichols' or the 'Group'), the soft drinks Group, announces its Interim results for the period ended 30 June 2016 (the 'period').
Nichols is an international soft drinks business with sales in over 70 countries, selling products in both the Still and Carbonate categories. The Group is home to the iconic Vimto brand which is popular in the UK and around the world, particularly in the Middle East and Africa. Other brands in its portfolio include Feel Good, Starslush, Levi Roots and Sunkist.
Financial Highlights:
|
All references below are pre-exceptional items |
Half Year ended 30 June 2016 |
Half Year ended 30 June 2015 |
% movement |
|
|
£m |
£m |
|
|
|
|
|
|
|
Group Revenue |
56.5 |
54.7 |
+3.3% |
|
|
|
|
|
|
Operating Profit |
11.9 |
10.7 |
+10.8% |
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Operating Profit margin |
21% |
20% |
|
|
Profit Before Tax |
11.9 |
10.9 |
+9.2% |
|
PBT margin |
21% |
20% |
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|
|
|
|
|
|
EPS (basic) |
25.77p |
23.66p |
+8.9% |
|
Interim dividend |
9.0p |
8.0p |
+12.5% |
John Nichols, Non-Executive Chairman, said:
“The Board is pleased with the Group's strong performance in the first half of the year, with UK sales growth continuing to outperform the market. Group revenue increased by 3.3% and Group profit increased by 9%, which reflects the strengths of the Group's business model. As a result of this performance and our confidence in the outlook for Nichols, we are pleased to recommend an interim dividend of 9.0 pence per share which represents a 12.5% increase compared to the prior year.”
Chairman's Statement
Nichols has produced another strong performance in the first half of 2016. Group sales have increased by 3.3%, profit growth (before exceptional credits) was 9.2% and the interim dividend has increased by 12.5% compared to the prior year.
Trading
Total revenues for the Group increased by 3.3% to £56.5m in the first half of 2016 (2015: £54.7m). This revenue growth was driven by our UK sales, which is particularly pleasing in the context of the continued challenges in the UK soft drinks market. Group operating profit increased by 10.8% to £11.9m (2015: £10.7m) delivering an increase in margin to 21% (2015: 20%) as a result of the sales growth and our continued strategy to focus on value over volume.
Our UK sales increased by 4.7% to £44.5m (2015: £42.6m). During the same period, revenues in the overall UK soft drinks market declined by 0.5% (Source: Nielsen 6 months to 18 June 2016). This outperformance of the market was driven by the strong growth of our Still Ready To Drink range, the launch of Vimto Remix into both the Still and Carbonate categories, and most notably the incremental sales from the acquisition of The Noisy Drinks Co. Limited.
Total international sales in the period were in line with our expectations at £12.0m (2015: £12.1m). As anticipated, the majority of our sales to the Middle-East will occur in the second half of the year due to the phasing of in-country production. In the Africa region, we have seen an excellent performance driven by our current markets and the opening of new territories.
Exceptional Profit
Having initially taken a 49% stake in The Noisy Drinks Co. Limited (Noisy) in March 2015, the Group acquired the remaining shares on 8 January 2016. Under International Financial Reporting Standards, the latter transaction triggers a deemed disposal of the initial 49% of the shares in Noisy and a subsequent acquisition of 100% of the shares. As a consequence, a profit on disposal amounting to £1.1m arose due to the increase in value of the 49% between March 2015 and January 2016. This profit is disclosed as an exceptional credit.
Dividend
As a result of the strong Group performance in the first half of 2016 and the Board's continued confidence in the outlook, I am pleased to recommend an interim dividend of 9.0 pence per share, which represents a 12.5% increase compared to the prior year (2015: 8.0 pence).
The interim dividend will be paid on 26 August 2016 to shareholders registered on 29 July 2016. The ex-dividend date is 28 July 2016.
Outlook
In our UK markets we expect performance in the second half of 2016 to continue the trend seen in the first six months of the year. In addition, we will re-launch the Feel Good brand in the autumn ahead of the important Christmas trading period into both the Still and Carbonate categories. As explained above, we expect a stronger second half of the year in our Middle East markets and as a result, our total international sales are anticipated to deliver growth for the full year.
In summary, the Board is pleased with the strong performance in the first half of 2016 and is confident that full year results will be in line with market expectations.