UK: Nichols fizzes as H1 profits up 14%
- H1 net profits up 16% to GB6.2m (US$9.6m)
- Net sales rise 9.6% to GBP55.4m
- Operating profits up 14% to GBP8.3m
- FY expected to be "in line with expectations"
Nichols saw healthy H1 profits
Soft drinks firm Nichols has reported a healthy rise in first-half profits despite the "challenging" UK retail market continuing.
In an interim statement today (26 July), the Merseyside-based producer of the Vimto CSD brand, said that net profits in the six months to the end of June leapt 16% to GBP6.2m (US$9.6m), helped by overall net sales rising 9.6% to GBP55.4m. Operating profits rose 14% to GBP8.3m in the six-month period.
The company said sales growth was driven by export sales, up 14% year-on-year. Sales to Africa were up by 27% and Middle East sales were 12% ahead of last year.
In the UK, despite "very poor weather and the ongoing economic uncertainty affecting the UK", the group reported "solid" sales growth of 8%.
No volume figures were disclosed for the period.
John Nichols, the firm's non-executive chairman, said domestic performance "was driven by the ongoing strength of our Vimto brand and our investment in NPD products under the Levi Roots and Weight Watchers brands, both of which have added incremental sales".
But he added: "In the UK, the combination of increased promotional activity and raw material cost inflation continues to exert pressure on our UK gross margins."
Looking ahead, Nichols said the group does not anticipate any improvement in the UK economy in the short to medium term, but added: "With our strong balance sheet, continued investment in our brands and a healthy export market, the group is very well placed to continue its profitable growth trend for the second half of 2012."
To read analysts' reaction to Nichols' performance, click here.
For a copy of the group's interim statement, click here.
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