Sales for the Vimto manufacturer rose 12.4% to £63.5M in the first six months of this year, compared with £56.5M for the same period last year.
UK market sales totalled £47.5M, an increase of 6.7% since the same time last year. However, Nichols saw the most growth in international sales, which increased 33.5%.
Sales in Africa rose 30.9%, the largest increase in sales for the company, while sales in the Middle East grew 19.8%.
Profit rose to £12.7M
Nichols’ operating profit rose to £12.7M in the first half of this year, up 7.1% from £11.8M last year.
The interim results reflected the company’s continued turnaround since it posted a 0.3% fall in sales in its 2015 full year finance report.
Commenting on the results, non-executive chairman John Nichols said: “Nichols has delivered another strong performance in the first half of the year. Our sales momentum, which continues to outperform the UK market coupled with successful management of input costs, has delivered solid profit growth.
“Whilst we anticipate that market conditions will remain challenging during the second half of the year, we have a clear strategy and, underpinned by the strength of our brands and our diversified business model, we are confident of delivering full-year results in line with expectations.”
Industry-wide input cost pressures
Nichols said it achieved its sales and profit growth despite industry-wide input cost pressures.
The Manchester-based manufacturer also announced it had acquired DJ Drink Solutions last month (June 2) – Nichols’ largest out of home dispensed soft drink distributor in the north west and north east of England.
“This acquisition consolidates our route to market in the two regions and is consistent with our successful business model already operating in other regions in the UK,” said the manufacturer.
Analyst comment – Sahill Shan of N+1 Singer Equity Research
N+1 Singer analyst Sahill Shan said Nichols’ interim results had cemented the company’s position in the drinks sector.
“Nichols continues to justify its premium rating, posting a strong set of interims with like-for-like sales growth of 12% and earnings per share of 7%,” said Shan. “The core Vimto brand has continued to comfortably outperform the UK soft drinks market and international momentum remains impressive.
“Given favourable ongoing growth prospects and optionality afforded by a growing net-cash position, we feel Nichols should be a core mid-cap holding.”