UK: Nichols FY profit down on charges
Nichols, the UK soft drinks firm that owns Vimto, has seen its profits fall by nearly 50% in 2008 due to a write-down charge on its Panda brand.
Net profit fell to GBP2.9m (US$4.2m) for the 12 months of 2008, compared to GBP5.7m in 2007, Nichols said today (25 March). It blamed the drop on a GBP5.7m one-off charge related to a loss of goodwill on the Panda drinks brand.
Nichols' share price rose by more than 8% on the AIM stock exchange this morning, however, after the group posted better-than-expected underlying profit and expressed confidence for 2009.
Profit before tax and charges rose by 11% year-on-year to GBP10m in 2008, the group said. Net sales rose by 1.6% to GBP56.2m.
Sales of the firm's flagship Vimto brand grew by 16% in the UK during the year, while international sales were flat. Global Vimto volumes rose by 8% for the year to 370m litres.
The Panda brand was the blackspot in Nichols' 2008 performance. Panda suffered from the decline in the children's carbonated drinks market in the UK, Nichols said.
The group was forced to write down the value of the Panda brand for several accounts with multiple retailers, due to lost contracts.
"Although we will continue to produce and promote Panda, future group marketing investment will concentrate more on our Vimto brand," Nichols said.
In its outlook, Nichols said that it remains confident of growth in 2009. Non-executive chairman John Nichols said: "We are pleased to announce a strong set of results in Vimto's centenary year, particularly as this has been achieved against the backdrop of an economic downturn, a poor summer in the UK and increased promotional activity by our competitors."
The board has recommended a 2008 dividend of GBP0.11, up 7% on 2007.
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