Nichols’ sales grow as Yemen conflict hits profits
The Merseyside-based company, which owns the Vimto soft drinks brand, saw sales rise to £132.8m last year, up from £117.3m in 2016.
Sales of Vimto in the UK increased 9%, with its dilute and ready-to-drink variants growing 10% and 11% respectively.
Nichols’ international sales were up an impressive 20.4% despite trading challenges, according to the company. Africa was the firm’s biggest success story, achieving growth of 21.2%, or 14.1% on a constant exchange rate basis.
‘Double-digit sales growth’
Non-executive chairman John Nichols said: “In 2017 we delivered strong double-digit sales growth across both the UK and international businesses, even though the market conditions have been challenging.
“The group expects to deliver further progress in 2018, supported by the advantages of our diversified business model and the strength of our brands.”
However, Nichol’s operating profit dipped 5.3% last year, down to £28.7m from £30.3m for the same period in 2016.
The company attributed the loss in profits to continuing conflict in Yemen, which resulted in a planned shipment of Vimto concentrate to the region being blocked. Margins were also affected by increased input costs that have hit the industry.
‘External challenges’
Nichols added: “Profits were maintained despite previously announced external challenges in the Yemen region and we are proposing to increase the final dividend by 15.3%.”
Earnings before interest, taxes, depreciation and amortisation were up 0.9% to £31.7m, while profit before tax and pre-exceptional items grew 0.4% to £30.5m.
Commenting on the results, Nichols CEO Marnie Millard said: “The strength of the Vimto brand, our geographical reach and continued focus on driving ‘value over volume’ delivered an excellent sales performance across the group.
“All of our routes-to-market have performed well and it’s particularly rewarding to see the diversified business model contributing so positively to the overall growth of our business.”
Meanwhile, high street baker Greggs has posted a £3.6m boost in its operating profit for the year ending 30 December 2017, as it continues to invest in consolidating its manufacturing operations and expanding its logistics capacity.
