UK: Outlook set fair for Nichols, but H1 profits hammered by Pakistan legal loss
- Half-year net profits total GBP1.6m (US$2.7m) as US$13.8m fine takes toll
- Stripping out fine, net profits in six months to end of June rise by 13.2% to GBP7.8m
- Sales in H1 increase by 2.7% to GBP56.6m
- Operating profits jump by 12.1% to GBP9.9m
Nichols released its half-year interim statement earlier today
Nichols has reported a healthy set of numbers for the first half of 2014, but its bottom line has taken a pummeling from a legal ruling in Pakistan.
While sales and operating profits in the six months to the end of June fared well, net profits in the period totalled GBP1.6m (US$2.7m) compared to GBP6.9m in the corresponding period in the year prior.
Earlier this month, Nichols was hit with a fine of PKR1.4m (US$13.8m) after the Pakistani High Court found in favour of Gul Bottlers, which had claimed loss of profits from a production and distribution deal in 2011. Prior to the ruling, the company had been braced for a possible fine of around $3.4m.
In the UK, sales in the half-year increased by 8%, with sales of the CSD portfolio rising by 11%. Still sales in the country were up by 3% for Nichols. Outside of the UK, the company saw sales fall by 12%, although this was blamed on "a shift in timing of shipments of Vimto concentrate to the Middle East".
Nichols said: "We expect international sales in the second half of 2014 to show improved performance in comparison to both the period and the second half of 2013."
The company concluded that its full-year performance will come in "in line with current expectations".
To read the company's interim statement, click here.
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