Vimto maker Nichols also reported revenue up 10% and profits up 14%. Net cash generation was also very strong, resulting in an increase of £3.5M from the year end to £23.6M at June 30 2012. Nichols reported that sales growth had again been delivered across all of its channels.
“I am delighted to report another strong first half year performance from the Group, delivering healthy sales growth, a significant increase in profits and earnings per share along with extremely strong cash generation,” said Nichols’ non-executive chairman John Nichols.
“This has been achieved despite very poor weather and the ongoing economic uncertainty affecting the UK.”
However, he qualified his comments by remarking that given the continuing economic uncertainty, the UK retail environment remained very challenging, with an “extremely competitive” soft drinks market.
Despite this, Nichols’ UK business achieved sales growth of 8%. In addition, profits before tax and earnings per share increased by 14% to £8.3M and 15% to 16.88p respectively.
The Group reported that its UK soft drink sales had continued to “significantly outperform the market”.
It attributed this to the strength of its Vimto brand and investment in new product development of products under the Levi Roots and Weight Watchers brands, both of which had added incremental sales. These factors helped to deliver total sales growth of 8% against last year, which it claimed was ahead of the overall UK soft drinks market growth of 2.4% as measured by AC Nielsen.
In the UK, however, the combination of increased promotional activity and raw material cost inflation continued to exert pressure on Nichols' UK gross margins. But productivity improvements and the strength of its international business allowed it to maintain operating profit margins at 15%, said the company.