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Profits up for Nichols as overseas sales falter in half year results

26-Jul-2024 - Last updated on 26-Jul-2024 at 15:56 GMT

Profit was up for Vimto maker Nichols in its half year 2024 results

Vimto-owner Nichols posted another half-year of profit, despite a slight dip in sales since the start of 2024.

Adjusted profit before tax was up 18% to £14.5m in the half year to 30 June 2024, with operating profit up 0.5% to £11.8m for the soft drinks manufacturer – compared to the same period the previous year.

While UK packaged revenues were up for the reported period (+5.3% to £45.4m), weaker sales internationally (-6.9% to £20m) and in out-of-home (-11.3% to £18.6m) meant group revenue decline 1.8% to £84m from £85.5m in the first half of 2023.

However, this decline was expected, due to the timing of shipments into the Middle East and reduced volumes in Africa. Nichols predicted a strong performance in the second half of the year.

Strategic review

As for the out of home segment, the fall in sales was attributed to a planned reduction in activity after exiting several unprofitable accounts, identified as part of a strategic review by the drinks firm.

Commenting on the sales, chief executive Andrew Milne said: “Positive trading momentum in our UK Packaged business reflected further market share gains in squash and carbonates, driven by increased marketing investment, growth from innovation, and distribution gains.

“Our biggest ever UK promotional campaign was launched towards the end of the Period, and we are confident this will support the continued growth of the Vimto brand over the summer.”

Nichols reported exceptional costs of £2.7m during the period related to investment in the group’s new ERP system, as well as a smaller charge of £200,000 relating to the implementation of its out-of-home review.

Full year outlook

In its outlook for the full year, the company expected to report adjusted profit before tax slightly ahead of current market expectations.

“Whilst mindful of continued pressure on consumer spending, despite levels of inflation stabilising, our diversified business model and the enduring strength of the Vimto brand have enabled us to deliver a strong performance,” Milne added.

“As a result, we now expect full-year profitability to be slightly ahead of current market expectations and we remain confident that Nichols is well placed to deliver its strategic growth ambitions.”

Meanwhile, Nestlé’s overall organic growth for the first half of 2024 was 2.1%, with real internal growth (RIG) strengthening in the second quarter of the year. Here's some of the topline figures.