Nichols set for boost through focus on value sales
The name behind Vimto, Panda, Levi Roots and Sunkist drinks brands posted strong annual results helped by that focus, said N1 Singer analyst Sahill Shan.
“We expect more of the same in the UK, with various new marketing initiatives in place and an ongoing focus on value over volume growth,” said Shan.
Shan said the soft drinks firm had achieved sales growth of 3.3%, driven by Vimto, against a largely flat wider market and solid single-digit international growth, fuelled by Middle East gains.
‘Strong momentum’
“International has strong momentum … and we envisage positive trading and strategic progress in 2015,” he said.
Nichols group reported a 14.1% rise in pre-tax profit, from £22.5M to £25.7M for the year ending December 31 on revenue up 3.5% from £105.5M to £109.2M. UK sales grew by 3.3%.
In its full-year report, Marnie Millard, Nichols’ ceo, said: “All sectors of the market remained competitive during the year with continued reliance by many brands on heavy promotional activity to drive sales.
“During the year we continued to execute our successful strategy of focusing on value over volume and minimising promotional driven sales.”
The Vimto ready-to-drink range had been a real winner for the business, achieving 26% growth versus the prior year, she said.
The launch of Vimto Squeezy in January 2014 into the fledgling water enhancers market added £1M to the brand’s value in the UK over the year, said Millard.
Calorie reduction
In 2014, the firm had continued to pursue the government’s Public Health Responsibility Deal targets for year-on-year calorie reduction, cutting calories per 100ml of ready-to-drink products sold by 28%. It had boosted the proportion of no-added-sugar product sales to 36% and slashed its use of total sugar by 23%, it claimed.
In addition, the company embarked on a recipe rationalisation programme at its manufacturing site in Ross-on-Wye, improving efficiency and use of labour, while reducing energy use and waste.
Nichols’ non-executive chairman John Nichols said: “2014 was another strong year for Nichols as the group once again outperformed the wider soft drinks market on its way to delivering double digit operating profit growth, pre-exceptional items.
“This strong outcome is again underpinned by the strength and heritage of our core Vimto brand both in the UK and internationally, as well as the diversity of our products and markets. We remain focused on delivering our growth strategy both in the UK and internationally and we look forward to the year ahead with confidence.”
