UK: Nichols posts FY profits fall as one-off costs bite
- FY net profits down 7.5% to GBP14.1m (US$23.5m)
- Net sales up 2% to GBP109.9m
- Operating profits down 9% to GBP18.7m
- Profit before tax and exceptionals up 10%
Nichols reported its FY results today
UK soft drinks maker Nichols has posted a slight rise in full-year sales but profits dropped because of costs over a structural shake-up and a legal tussle in Pakistan.
Reported net profits in calender 2013 were down 7.5% to GBP14.1m (US$23.5m), the group said today (13 March). Net sales increased by 2% to GBP109.9 in the same period, while operating profits fell by 9% to GBP18.7m.
Profits before tax and exceptionals, however, were up 10%, and Nichols chairman John Nichols praised 2013 as “an excellent year” for the company.
Nichols said: “We have successfully delivered on our strategy to increase our profitability and, pre exceptional items, we have delivered double digit growth to both profit before tax and earnings per share.”
Exceptionals on the balance sheet totalled GBP3.7m, including GBP1.7m for a now-completed management restructuring and GBP2m to cover the potential costs of a litigation claim from a licensee in Pakistan. The claim, which Nichols said it is defending, centres on the licensee’s right to manufacture and distribute Vimto cordial in Pakistan.
Despite management's confidence, 2013 was weaker for Nichols than the previous year, when reported profits climbed by 15.5% and sales increased by 9%.
In UK trading last year, sales of stills rose by 11%, driven by Vimto concentrate, Nichols said. Carbonates in the country fell by 6%, despite a 4.3% sales increase for Vimto. Overall, full-year sales in International were up 2%.
Looking ahead, Nichols said it is confident of another “strong” year despite continued consumer caution in the UK.
Nichols' share price stayed flat this morning, following the release of the numbers.
To read the company's full results, click here.
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