UK: Nichols set to deliver in 2012 - analyst
Nichols is hoping for a strong showing for Vimto during Ramadan, according to analysts
New products and solid international growth should give Vimto-producer Nichols a strong start to the year, analysts have said.
In a trading statement earlier today, Nichols announced double-digit growth for the first four months of the year. It follows a 28% leap in net profits in the company's 2011 full-year results.
"This is a commendable effort when set against the comparative of plus-12.5% last year and marginal growth in the UK soft-drinks market," said Wayne Brown, an analyst with Canaccord Genuity.
"We are encouraged that the momentum from FY2011A has continued into 2012E and whilst we leave our forecasts unchanged today, we remain confident that risk lies towards the upside."
Panmure analyst Damian McNeela said Nichols was well-placed to deliver strong medium-term growth because of its launch in January of an exclusive range of Weight Watcher drinks.
McNeela said international business growth was promising but both analysts indicated that full-year judgement would wait until after Ramadan, which this year starts on 20 July. Last year, the religious festival started on 1 August.
Vimto is a popular Ramadan drink in the Middle East, where the brand is produced under licence by Aujan Industries.
“This deal should have a positive effect for volumes as Aujan will utilise the Coca-Cola distribution network, which should result in some meaningful distribution gains over the medium term, particularly outside Saudi Arabia,” said Brown.
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