Resilient financial performance despite challenging trading conditions
Vimto 2020 Preliminary Result
Nichols plc (‘Nichols’ or the ‘Group’), the diversified soft drinks Group, announces its Preliminary results for the year ended 31 December 2020 (the ‘period’).
| 31 December 2020 | 31 December 2019 | Movement | |
|---|---|---|---|
| Group Revenue | 118.7 | 147.0 | (19.3%) |
| Adjusted Operating Profit1 | 11.7 | 32.4 | (64.1%) |
| Operating Profit | 6.6 | 32.4 | (79.7%) |
| Adjusted Profit Before Tax (PBT)1 | 11.6 | 32.4 | (64.2%) |
| Profit Before Tax (PBT) | 6.5 | 32.4 | (79.8%) |
| Adjusted PBT Margin1 | 9.8% | 22.1% | (12.3ppts) |
| PBT Margin | 5.5% | 22.1% | (16.6ppts) |
| EBITDA2 | 16.5 | 37.0 | (55.5%) |
| Adjusted earnings per share (basic)1 | 25.56p | 72.81p | (64.9%) |
| Earnings per share (basic) | 13.14p | 72.81p | (82.0%) |
| Cash and cash equivalents | 47.3 | 40.9 | +15.6% |
| Proposed Final Dividend | 8.8p | 28.0p6 | (68.6%) |
| Full year dividend | 36.8p | 12.4p6 | +196.8% |
- Vimto Brand Value in the UK +6.7% versus soft drink market of +2.5%3
- Vimto Brand ‘in-market’ Middle East sales remained resilient through Ramadan despite Sweetened Beverage Tax (SBT) and Covid-19 restrictions
- Vimto in Africa delivered strong revenue growth of +7.4%
- Vimto continues to progress across the rest of the world, delivering revenue growth of 17.3%
- Out of Home (OoH) significantly impacted by the pandemic with revenues down 61.4% and fixed costs weighing heavily on overall financial performance
- Strong cash performance in the period, Free Cash Flow4 +£17.6m, Cash Conversion5 at 186%
- Working capital focus with slower end of year 2020 due to Covid-19 Exceptional charge of £5.1m
- Of which £3.8m, non-cash Impairment of Feel Good Goodwill and Intangible Assets
- £1.3m operational review and restructuring
- Final dividend proposed of 8.8p reflecting 2x cover7 for combined 2019 and 2020 performance period
- Continued uncertainty for 2021 outlook, guidance remains withdrawn
1.Excluding Exceptional items; impairment charges of £3.8m, operational review and restructuring costs of £1.3m (2019: £nil)
2. EBITDA is the statutory profit before tax, interest, depreciation and amortisation
3. Nielsen Total Coverage Year to Date 26 December 2020
4. Free Cash Flow is the net increase in cash and cash equivalents before acquisition funding and dividends
5. Cash Conversion is the Free Cash Flow/ Adjusted Profit After Tax
6. 2019 Final Dividend was cancelled on 31 March 2020 due to the effect of the Covid-19 pandemic
7. Dividend cover is the adjusted basic earnings per share divided by the dividend per share
The Covid-19 pandemic presented us with unequalled challenges in 2020 and our first and most important objective through this unprecedented period has been the protection and wellbeing of our employees and customers. Throughout these difficult times, our colleagues have consistently demonstrated their values and commitment to our business, and I would like to wholeheartedly thank everyone for their efforts. The strength of the Vimto brand, the Group’s robust balance sheet and our diversified business model has ensured a resilient financial performance in the period despite the challenging trading conditions across our markets. We have achieved significant outperformance from the Vimto brand in the UK, solid growth in Africa and a good performance in the Middle East despite the impact of the recently introduced Sweetened Beverage Tax (SBT) and Covid-19 restrictions. Whilst recognising the current and near-term impact of the pandemic on the soft drinks market, the Board continues to believe that Nichols, underpinned by the strength of the Vimto brand, the Group’s diversified business model and the skill and commitment of our colleagues, remains well placed to deliver its long-term strategic ambitions. Given the continued near-term uncertainty, 2021 guidance remains withdrawn.
John Nichols, Non-Executive Chairman
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