UK: Nichols on course for strong FY as sales rise

• FY sales up by 9% to GBP108m (US$173.5m)
• UK sales increase by 10%
• Exports climb by 8%

Nichols outpaced the UK soft drinks sector last year as bad weather and difficult trading conditions failed to dampen sales.

Net sales increased by 9% to GBP108m (US$173.5m) in the year ended 31 December, the company said in a trading update today (7 January). Sales for Nichols' UK business rose by 10% against the prior year with export sales up by 8%, the company said.

“(Last year) has seen a strong trading performance and we expect group profit and earnings per share to be significantly ahead of last year and ahead of market expectations,” Nichols said.

Analysts Canaccord Genuity said the results “represent a commendable year of growth when set against increased promotional activity, poor weather, and the rise in raw material costs depressing gross margins”. 

Nichols will look to sign more licensing deals following the success of its Weight Watchers partnership, that produces the Weight Watchers-branded range under licence through its Vimto Soft Drinks division, Canaccord said. 

Nichols secured the exclusive rights to the Weight Watchers soft drinks concept in 2011.

Looking ahead to Nichols' full-year results, due to be released on 7 March, Canaccord said The Coca-Cola Co's acquisition of a 49% stake in Nichols' Middle East partner Aujun Industries in 2011 will boost volumes as Aujun makes use of Coca-Cola's distribution network, particularly outside Saudi Arabia.