Nichols margin focus pays off in FY profits boost
- FY net profits up 57% to GBP22.2m (US$31m)
- Sales in 2015 come in flat at GBP109.3m
- Operating profits jump 56% to GBP27.8m
Nichols' Vimto brand had a strong Ramadan, the company said
Nichols has posted a jump in full-year profits despite flat sales, as the company cut back on discounting and focused on margin growth.
Net profits climbed 57% to GBP22.2m (US$31m) in calendar-2015, the Vimto owner said today. Sales were flat at GBP109.3m while operating profits jumped 56% to GBP27.8m in the same period.
The company said its margin growth was driven by limiting "deep promotional activity" in the UK, especially in carbonates. The bottom line was also helped by the payment in 2014 of a PKR1.4m (US$14m) fine related to a distribution deal in Pakistan that saw profits last year stay flat.
Sales in the UK declined marginally but Nichols found more luck in its overseas markets this year and praised a strong Ramadan for its Vimto brand in helping international sales increase by 4% on a constant currency basis to GBP25m (+1.5% on a reported basis).
Looking ahead, the company said it expected 2015's trends to continue this year as it bedded in two new acquisitions. In July, Nichols announced the purchase of the Feel Good soft drinks brand and earlier in the year it bought a major stake in UK-based slush drink producer The Noisy Drinks Co.
Investors reacted favourably to Nichols' FY results, and shares were up 4.8% as of 1207 in London today.
To read the company's full results, click here.
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