Vimto puts a great sparkle into Nichols' trading results

02-Feb-2015 - Last updated on 11-Feb-2015 at 16:06 GMT

Vimto claims to have outperformed sales of other soft drinks last year

Vimto soft drinks maker Nichols has reported positive trading results for the second half of 2014, in a statement released last month.

UK sales grew ahead of the market and international sales delivered double-digit growth in the second six months of the year compared with the same period in 2013. The group expects sales for the full year ended December 31 2014 to total £113.6M, an increase of 3.4% on the previous year and 4% ahead on a like-for-like exchange rate basis.

Nichols’ brand portfolio includes Vimto, which is sold in over 65 countries; Levi Roots soft drinks; and Sunkist & Panda, which are sold in the UK. The group operates in both the still and carbonated drinks categories.

Modest increase

Trading conditions in the UK grocery sector continue to be challenging and this contributed to the UK soft drinks market showing only a modest 0.4% increase in sales value over the past 12 months, reported Nichols’ non-executive chairman John Nichols.

Despite this backdrop, the company reported that its Vimto brand performed well, showing an increase in sales of 4.5% during the year and outperforming the UK soft drinks market as a whole. This strong performance was supported by its new ‘Vimtoad’ advertising campaign and the rebranded packaging launched in the spring.

Nichols’ total international revenues for the year were 4.3% ahead of 2013 and 7.3% ahead on a like-for-like exchange rate basis.

Sales to the Middle East in the second six months of 2014 were well ahead of the year before. As a result, full-year sales to the Middle East were 12.3% ahead of 2013.

Lacklustre

The results were well received by city analysts. Investec’s Nicola Mallard described the Nichols figures as “solid … ahead of the lacklustre UK soft drinks market”.

Phil Carroll, responsible for beverages and agri-food equity research with analyst Shore Capital, was similarly impressed with the results and said: “Overall, this is a positive statement from Nichols where the group appears to be on track to deliver another year of double-digit earnings growth, in our view.”

Nichols’ preliminary results will be announced on March 5.