Financial Highlights:
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*EBITDA is the statutory profit before tax, interest, depreciation and amortisation |
Half Year ended 30 June 2019 |
Half Year ended 30 June 2018 |
% movement |
|
|
£m |
£m |
|
|
|
|
|
|
|
Group Revenue |
71.6 |
65.0 |
10.2% |
|
Operating Profit |
13.3 |
13.1 |
2.1% |
|
Operating Profit margin |
18.6% |
20.1% |
|
|
|
|
|
|
|
Profit Before Tax (PBT) |
13.3 |
13.1 |
2.0% |
|
PBT Margin |
18.6% |
20.1% |
|
|
|
|
|
|
|
EBITDA* |
15.3 |
14.0 |
9.7% |
|
|
|
|
|
|
Earnings per share (basic) |
29.63p |
28.81p |
2.8% |
|
Interim dividend |
12.4p |
11.3p |
9.7% |
John Nichols, Non-Executive Chairman, said:
“Nichols plc has delivered another good trading performance in the first half of 2019, with growth across both the UK and international markets. As a result, revenue, profit before tax and earnings per share have all increased during the period, and we have increased the interim dividend by 9.7%.“
Chairman's Statement
I am pleased to announce that the Group has delivered a good trading performance for the first six months of 2019. The Group's revenue, profit before tax and earnings per share have all increased during the period, and we have increased the interim dividend by 9.7%.
Trading
Total Group revenue in the period increased by 10.2% to £71.6m against the prior year (H1 2018: £65.0m). Across the Group, revenue from Still products has increased by 11.6% to £33.9m driven by Vimto dilute in the UK and Vimto concentrate sales to the Middle East. Sales of Carbonate products grew by 8.4% to £37.7m as a result of the Africa performance and Out of Home (OoH) growth.
Sales were strong in our international markets, albeit against softer prior year comparatives. International revenues totalled £14.5m in the period (H1 2018: £11.2m), with sales to the Middle East in line with expectations at £4.6m (H1 2018: £2.1m). Elsewhere in our international markets, sales to Africa grew by 12.6% to £7.6m, driven by strong execution in our core markets.
In the UK, revenue increased by 6.2% to £57.1m (H1 2018: £53.8m) as sales of Vimto grew by 4.0%, against very strong prior year comparatives (H1 2018: +9.0%). Year to date growth in the total soft drinks market was 4.1% (Nielsen to 15 June 2018) reducing from 5.7% in May (Nielsen to 18 May 2019) as the industry laps last year's record summer weather. Elsewhere in the UK business, OoH sales increased by 11.8% to £21.5m (H1 2018: £19.2m).
Profit
Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) increased by 9.7% to £15.3m (H1 2018: £14.0m).
To support the trading growth, the Group has invested in its infrastructure during the period. In addition, administrative expenses include the retranslation cost of US Dollar and Euro currency balances reflecting adverse forex movements.
Profit Before Tax at the half year was £13.3m, 2.0% ahead of the prior period.
Dividend
Reflecting the Board's ongoing confidence in the Group's financial position, we are pleased to recommend an interim dividend of 12.4 pence per share (H1 2018: 11.3 pence).
The interim dividend will be paid on 30 August 2019 to shareholders registered on 26 July 2019; the ex-dividend date is 25 July 2019.
The Board intends to deliver continued returns to shareholders through a progressive dividend policy, with increases aligned to growth in earnings per share with the alignment being fully implemented by 2021.
Board changes
After 14 years with the Group and 10 years as Group Chief Financial Officer, Tim Croston has informed the Board of his intention to step down from the Board by 30 June 2020. The notice that Tim has given the Board affords sufficient time to ensure a smooth transition to his successor, with the recruitment process commencing immediately.
Separately, we are delighted to announce that Andrew Milne who has served on the Board since January 2016 as Group Commercial Director has been promoted to the role of Group Chief Operating Officer with immediate effect.
On behalf of the Board I would like to thank Tim for his significant contribution to the Group during the last 14 years and wish Andrew every success in his new role.
Summary and outlook
The Board is pleased with the Group's performance in the first six months of 2019 in both our UK and international markets.
While UK trading conditions are expected to remain challenging, as a result of the Group's diversified business model and sales momentum, the Board is confident that full year earnings will be delivered in line with its expectations.
John Nichols
Non-Executive Chairman
16 July 2019