John Nichols, Non-Executive Chairman, said:
“2016 has been another very good year for Nichols plc with the Group delivering continued progress against our growth strategy. This has resulted in a 9.7% increase in basic earnings per share* and a 15.3% rise in the final dividend.
The Group has a clear strategy for growth and whilst the soft drinks market is likely to remain challenging in 2017, the Board remains confident of delivering continued success underpinned by our strong brands, diversification and successful track record of profitable growth.”
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
Chairman's Statement
I am delighted to report that 2016 was another very good year for Nichols plc. The Group's revenues increased by 7.4%, operating profit grew by 9.0% and adjusted basic earnings per share was 9.7% ahead of the prior year.
Trading
The Group's total revenue was £117.3m, 7.4% up on the prior year (2015: £109.3m). This growth came from both our UK and international markets, which emphasises the strength of our diversified business model. As a result of the revenue growth, operating profit increased to £30.3m, 9.0% ahead of 2015 (£27.8m).
Total sales in the UK were £90.7m, 7.0% up on the prior year (2015: £84.8m) which is particularly pleasing given the challenging trading environment. The growth was driven by a strong performance from the Vimto brand and the successful integration of The Noisy Drinks Co. Limited (Noisy) following the full acquisition of the frozen drinks company in January 2016.
Sales from the Vimto brand grew 4.7% in the year, significantly outperforming the UK soft drinks market where sales growth was 1.0% (Nielsen year to date 31 December 2016). The addition of frozen drinks has enhanced our Out of Home offer to the customer, which also includes dispense and packaged soft drinks across both the Still and Carbonate market. As a result, we believe Vimto Out of Home offers a unique proposition to this segment of the soft drinks market.
International sales for 2016 totalled £26.6m, representing an 8.8% increase on the prior year (2015: £24.4m) and a 2.7% increase on a constant exchange rate basis. This excellent result was driven by sales to our African markets where revenues grew by 32.5% to £10.5m (up 19.7% on a constant exchange rate basis). In the Middle East, in-market Vimto sales showed healthy growth and whilst sales of concentrate were slightly down on the prior year, this was simply a result of the timing of shipments ahead of Ramadan in 2017.
Exceptional gain
As described in the Chief Financial Officer's Report, the exceptional gain in 2016 related to the step-acquisition of Noisy, which was accounted for as an investment in associate prior to the remaining 51% of shares being acquired in January 2016.
Dividend
Following another strong performance and reflecting the Board's continued confidence in the outlook for the Group, the Board is pleased to recommend a final dividend of 20.3 pence per share (2015: 17.6 pence). If accepted by our shareholders, the total dividend for 2016 will be 29.3 pence (2015: 25.6 pence), an increase of 14.5% on the prior year.
Subject to shareholder approval, the final dividend will be paid on 5 May 2017 to shareholders registered on 7 April 2017; the ex-dividend date is 6 April 2017.