Vimto dilute sales increased over the year

Vimto dilute sales increased over the year

Back in May, Nichols chairman John Nichols warned that a shift in his firm's focus from carbonates to stills would stymie any chance of full-year growth. It seems his pessimism was misplaced.

In a trading statement today (10 January) Nichols, which owns the Vimto brand, posted a 2% full-year 2013 sales jump, driving expectations of FY profits growth compared to last year. 

Along with a solid performance in the UK (FY sales up 2%, H2 sales up 5%), today's statement seems to have proved the wisdom of Nichols' new strategy, made because of increased promotions pressure on carbonates from rivals in the UK. The proof was in the news that, although Vimto's carbonate sales fell by 6%, sales of Vimto's dilutable juice jumped by 11%.

Analyst Sahill Shan at N+1 Singer Equity Research dug even deeper into the numbers, revealing that, in the second-half of last year, Vimto dilutable juice sales accelerated to a 15% increase. 

As Shan points out, last year's hot Summer in the UK undoubtedly helped sales. However, considering that stills such as Vimto concentrate provide much higher margins than carbonated variants, Nichols' new direction looks like it is off to a good start.