Vimto maker Nichols has posted a solid set of interim results after achieving volume growth in all three of its routes to market – UK packaged products, international packaged, and out-of-home.
Group revenue increased by 1.8% to £85.5m, with the company noting that gross margins had been maintained despite increased promotional activity in the UK linked to new product innovation.
A strategic drive to win market share led Nichols to achieve volume growth of 5% in UK packaged products, with new product launches targeting the energy and ready-to-drink categories. The unit’s revenues grew by 3.7% to £47m.
International packaged revenues declined 2.5% to £19.5m, impacted by the shift to a higher-margin concentrate model in Africa and the phasing of Middle East shipments due to the earlier timing of Ramadan.
Out-of-home revenues grew 1.9% to £19.0m, with further simplification of the unit’s operating model and a focus on profit leading to the exit from its Starslush business.
Meanwhile, Nichols adjusted operating profits rose 4.1% to £13.6m. However, adjusted pre-tax profits increased only 0.8% to £14.6m, with margins narrowing slightly due to reduced interest income.
Looking ahead, Nichols said its full-year adjusted pre-tax profits were expected to be in line with market expectations, but cautioned that ongoing economic uncertainty and tax changes both posed potential headwinds.
CEO Andrew Milne commented: “We are pleased to have delivered further progress against our growth strategy in the first half of the year.”
He added: “Leveraging the strength of our brand portfolio, our geographically diverse business model, and a robust balance sheet, we remain confident that Nichols is well-positioned to deliver growth in line with our strategy and medium-term financial objectives.”
