Vimto maker Nichols announced a special dividend worth £20m today after delivering robust profit growth in the first half of the year.
The firm’s adjusted profit before tax grew 18.0% to £14.5m, with operating profit climbing 14.1% to £13.1m. This was driven by improved gross margin, together with a reduction in administrative costs as it continued to overhaul its loss-making out-of-home (OoH) business.
Exiting several unprofitable accounts and product offerings in OoH meant overall group revenues slipped 1.8% to £84.0m. However, Nichols saw a healthy uptick in its core UK packaged revenue, which grew by 5.3% to £45.4m, bolstered by nearly 5% volume growth following new product innovation, expanded distribution, and increased marketing investment.
The group noted that it saw strong market share growth in its home market, driven by both the squash and carbonate categories, with its Vimto brand achieving its highest-ever UK annual retail sales value of £109m.
International Packaged revenues fell by 6.9% to £20.0m against strong comparatives, whilst OoH revenues declined by 11.3% to £18.6m.
Andrew Milne, CEO of Nichols, praised the positive financial results and noted that its biggest-ever UK promotional campaign was launched towards the end of the period, which is expected to drive further growth of its Vimto brand over the summer.
He concluded: “Whilst mindful of continued pressure on consumer spending, despite levels of inflation stabilising, our diversified business model and the enduring strength of the Vimto brand have enabled us to deliver a strong performance. As a result, we now expect full-year profitability to be slightly ahead of current market expectations, and we remain confident that Nichols is well placed to deliver its strategic growth ambitions.”
