Nichols, the soft drinks group, has posted robust first half results, driven by good growth in its core UK business.
During the six months 30 June, the group’s total revenues increased by 3.3% to £56.5m. This growth was driven by strong performance in the UK, despite the challenging trading conditions in the sector. Group operating profit increased by 10.8% to £11.9m with margin growing from 20 to 21% as a result of the sales growth and the company’s focus on value over volume.
UK sales increased by 4.7% to £44.5m in an overall UK soft drinks market that declined by 0.5% (Source: Nielsen 6 months to 18 June 2016). The group said that this outperformance of the market was driven by the strong growth of its Still Ready To Drink range, the launch of Vimto Remix into both the Still and Carbonate categories, and most notably the incremental sales from the acquisition of The Noisy Drinks Co. Limited.
In its international business, sales were in line with the prior year at £12m. Nichols said it expects the majority of sales to the Middle East to occur in the second half of the year due to the phasing of in-country production. Meanwhile, in Africa the group said that had seen an “excellent” performance driven by both current markets and the opening of new territories.
Looking ahead, the group said: “In our UK markets we expect performance in the second half of 2016 to continue the trend seen in the first six months of the year. In addition, we will re-launch the Feel Good brand in the autumn ahead of the important Christmas trading period into both the Still and Carbonate categories. We expect a stronger second half of the year in our Middle East markets and as a result, our total international sales are anticipated to deliver growth for the full year.
“In summary, the Board is pleased with the strong performance in the first half of 2016 and is confident that full year results will be in line with market expectations.”