UK soft drinks group Nichols has admitted that it is in talks over a possible takeover of the company.

Nichols, which owns the Vimto brand, said today (19 March) that it is in "preliminary discussions" over a possible offer.

"The discussions are at an early stage and accordingly, there is no certainty that any offer will be made. A further announcement will be made in due course," Nichols said in a statement to the London Stock Exchange.

Nichols saw profits jump almost 16% last year as its focus on soft drinks paid off. Last week, the company posted a 15.8% rise in pre-tax profits to just under GBP7m (US$13.5m).

The jump in earnings came from Nichols' move to focus on two areas - soft drinks and its dispense systems business. Revenues, meanwhile, inched up 1.6% to GBP52.3m during 2006.

Nichols officials were unavailable for further comment as just-drinks went to press.

The market reacted favourably on the news with shares in Nichols up over 7% to GBP3.04 at 16:00 GMT.