UK: Nichols set to make more overseas breakthroughs - analyst
Nichols' "commendable" first-half performance is set to continue into H2 as the firm makes more breakthroughs in overseas markets, an analyst has forecast.
Earlier today (26 July), the Vimto producer announced that H1 profits were up 14%, driven by sales growth in Africa and the Middle East. The growth came despite the UK market remaining "challenging", the Merseyside-based company said.
In a note released after the results were published, analysts Canaccord Genuity said: "These results are a commendable performance when set against increased promotional activity, poor weather, and the rise in raw material costs depressing gross margins."
It also pointed to three "catalysts" for distribution gains in the second half of Nichols' financial year.
This includes: penetration into an extra eight or nine North African markets, helped by a multi-country partnership with ECCB and Castel that Nichols signed last year; a boost in Middle East volumes due to Coca-Cola acquiring a 49% stake in Aujun Industries, Nichols' Middle East partner last year; and more licensing agreements in the UK from its LeviRoots and WeightWatchers brands.
"The update is strong but bang in line with expectations," the note added.
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