The drinks business reported a 77.4% decline in operating profit for the half-year ended 30 June 2020 (from £13.3m to £3m), while group revenue fell 17.3% to £59.2m. Fixed costs relating to the outbreak of COVID-19 weighed heavily on the business.
Nichols’ out of home business took the biggest hit from the global pandemic, with most of the hospitality and foodservice industries forced to shut down in response to the virus.
Revenue from carbonated products dropped 28.8% to £26.8m, while sales of still drinks saw a less substantial decline of 4.6% to £32.4m.
Financial impact of the coronavirus
Commenting on the results, non-executive chairman John Nichols said: “In light of the ongoing impact to the financial results of the group due to the global pandemic, the Board remains pleased with the Group's performance.
“Although the immediate future remains uncertain, we are confident in Nichols' ability to emerge from this period well-placed to continue to deliver the Group's long-term strategic plan.”
The outbreak of COVID-19 has also affected export sales of Nichols drink (down 8.1% to £13.3m), particularly in the Middle East. This was partially offset by sales of Vimto – broadly flat throughout Ramadan – and an 8.7% growth of sales in Africa.
Ongoing coronavirus pressures also forced Nichols to furlough 220 employees during the peak of the pandemic, all paid 100% of their wages with help from the Government’s Job Retention Scheme – a financial contribution of £0.9m.
“Our first and most important objective through this unprecedented period has been the protection and wellbeing of our employees and customers,” John Nichols added.
“Throughout these most difficult of times, our colleagues have once again demonstrated their values and commitment and I would like to wholeheartedly thank everyone for their current and future efforts.”
Nichols also announced the appointment of Andrew Milne – current board director and chief operating officer – as the new chief executive of the group, affective from 1 January 2021.
He is to replace current chief executive Marnie Millard, who informed the board of her intention to step down from the role on 31 December 2020 after seven years with the business.
Andrew has extensive experience in the soft drinks industry, having also been sales director for the Northern region of Coca-Cola Enterprises before joining the Group in 2013. Prior to that Andrew worked at GlaxoSmithKline as a trading director.
Nichols said: “On behalf of the Board I would like to thank Marnie for her significant contribution to the Group over the last seven years and wish Andrew every success in leading the business during the next phase of its development. Marnie will now commence her handover to ensure a smooth transition.”