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Nichols Plc - Preliminary Results

Nichols plc is an international soft drinks business with sales in over 85 countries, selling products in both the Still and Carbonate categories. The Group is home to the iconic Vimto brand which is popular in the UK and around the world, particularly in the Middle East and Africa. Other brands in its portfolio include Feel Good, Starslush, ICEE, Levi Roots and Sunkist. 


Financial Highlights:

*EBITDA is the statutory profit before tax, interest, depreciation and amortisation

Year ended

31 Dec 2017

Year ended

31 Dec 2016

% movement









Group Revenue




Operating Profit




Operating Profit margin








Operating Profit pre-exceptional items




Operating Profit margin pre-exceptional items








Profit Before Tax pre-exceptional items




PBT margin pre-exceptional items








EPS (basic) pre-exceptional items




Final dividend





John Nichols, Non-Executive Chairman, said:


 "In 2017 we delivered strong double-digit sales growth across both the UK and international businesses, even though the market conditions have been challenging. Profits were maintained despite previously announced external challenges in the Yemen region and we are proposing to increase the final dividend by 15.3%.


The Group expects to deliver further progress in 2018, supported by the advantages of our diversified business model and the strength of our brands." 




Chairman's Statement


The Group has delivered a strong revenue performance throughout 2017, with both the UK and international businesses contributing to a double-digit increase compared to the prior year.


Despite industry wide cost input increases and the challenges in Yemen as reported in our Trading Update on 19 December 2017, profit pre-exceptional items has been maintained at the same level as the prior year and the Board has recommended a 15.3% increase in the final dividend.




Total Group revenue for 2017 has increased by 13.2% to £132.8m (12.2% on a constant exchange rate basis). This has been delivered across the Group in both our UK and international businesses highlighting the advantages of our diversified business model.


UK sales totalled £100.8m, an increase of 11.0%, which is a strong performance given ongoing challenges in the UK market. Once again, the Vimto brand has significantly outperformed the market with sales in 2017 up by 9.0% compared to the overall UK soft drinks market which was up by 2.2% in the same period (Nielsen year to 30 December 2017). Elsewhere in the UK, our Out of Home business increased its sales by 21.5% compared to the prior year. This was delivered from both our dispensed soft drinks and frozen beverages product ranges and demonstrates the benefits of recent acquisitions in this part of our business.            


Sales to our international customers grew by 20.4% to £32.0m (2016: £26.6m). Revenues to Africa were £12.7m, an increase of 21.2% compared to 2016. Despite the reported challenges in Yemen, revenues to the Middle East region were up 13.4%, although this was in the context of softer comparatives in the prior year (2016: -7%).        


Whilst the Group remains highly profitable with Group Profit Before Tax and exceptional items delivering a 23% return on sales (2016: 26%), the margin has been impacted by increased input costs affecting the wider industry. In addition to the margin dilution and as reported in our Trading Update on 19 December 2017, the escalation in hostilities in Yemen prevented the planned shipments of Vimto concentrate in December. As a result, Group Profit Before Tax and exceptional items of £30.5m was broadly in line with the prior year (2016: £30.4m).


Exceptional Items


The Group incurred a number of costs during 2017 which by their nature were non-recurring and have been reported as exceptional items. These costs fell into three categories: merger and acquisition expenses, restructuring costs and costs incurred in preparation for the introduction of the Soft Drinks Industry Levy. The total cost of these exceptional items was £1.8m.




As a reflection of the Board's confidence in the Group's financial position and future growth prospects, we are pleased to recommend a final dividend of 23.4 pence per share (2016: 20.3 pence).


If accepted by our shareholders, the total dividend for 2017 will be 33.5 pence (2016: 29.3 pence), an increase of 14.3% on the prior year. Subject to shareholder approval, the final dividend will be paid on 4 May 2018 to shareholders registered on 23 March 2018; the ex-dividend date is 22 March 2018. 


In 2018, we expect to maintain the positive sales trend in the UK with the Vimto brand being supported by a new marketing campaign launching in the spring. In addition, we are well prepared for the introduction of the Sugar Levy with 100% of the Vimto and Feel Good brands portfolio already exempt from the levy.


In our international business, we are confident of continued sales growth in Africa, however, the current conflict in the Yemen coupled with a slowdown in the Saudi economy, suggests that sales to the Middle East region will soften in 2018.


In summary, the Group remains highly profitable and our diversified business model, strong balance sheet, and the resilience of the Vimto brand will continue to support the expected sales growth in 2018.



John Nichols

Non-Executive Chairman

28 February 2018