UK: Nichols sees H1 profits rise as stills come to fore
- H1 profits up 11% to GBP6.9m (US$10.5m)
- Sales dip slightly by 0.4% to GBP55.2m
- Operating profits rise by 7% to GBP8.9m
- International sales up by 2%, driven by Africa
Nichols says its outlook remains consistent
Nichols has hailed its focus switch from carbonates to stills as it posted a rise in half-year profits despite flat sales.
Net profits increased by 11% to GBP6.9m (US$10.5m) in the six months to the end of June, the Vimto owner said today (25 July). Net sales dipped slightly by 0.4% to GBP55.2m over the same period while operating profits rose by 7% to GBP8.9m.
The group said that its UK business has faced pressure from increased promotions in carbonates and higher costs, forcing it to grow its market share in the still category and lower promotional spending in carbonates. “At the half year this plan has been successful, delivering increased gross margin and cash profit compared to the prior year,” it said.
In May, chairman John Nichols warned that the new strategy could hurt FY sales.
Nichols today said his company's ongoing strategy to focus on profits rather than volumes increases had boosted half-year results. He also said the company will continue to introduce new products following last month's launch of Vimto extensions Extreme Energy and Extreme Sport, while also seeking out new markets.
Nichols' international sales grew 2% helped by growth in Africa, though its Middle East markets saw weakness in concentrates, it said.
Looking ahead, the company said weak consumer spending in the UK will keep volume growth low, and performance will be in line with first-half results.
In morning trading, Nichols' share price was up by 1.2%.
To read the company's official statement, click here.
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