Nichols 2023 Interim Results

26 July 2023

Nichols plc (‘Nichols’ or the ‘Group’), the diversified soft drinks Group, announces its unaudited Interim Results for the half year ended 30 June 2023 (the ‘period’).

Half year ended
30 June 2023
Half year ended
30 June 2022
Group Revenue £85.5m £80.2m +6.6%
Adjusted Profit Before Tax (PBT)1 £12.3m £11.3m +9.1%
Profit Before Tax (PBT) £11.2m £10.1m +10.5%
Adjusted PBT Margin1 14.4% 14.0% +0.4ppts
PBT Margin 13.0% 12.6% +0.4ppts
Statutory EBITDA2 £11.6m £12.4m (6.5%)
Adjusted earnings per share (basic)1 25.70p 24.80p +3.6%
Earnings per share (basic) 23.31p 22.22p +4.9%
Cash and Cash Equivalents £56.1m £49.2m +14.2%
Free Cash Flow (FCF)3 £5.4m £(2.6m) +310.2%
Adjusted Return on Capital Employed4 25.9% 25.2% +0.7ppts
Statutory Return on Capital Employed5 14.3% (14.3%) +28.6ppts
Interim Dividend 12.6p 12.4p +1.6%

Strategic and Operational highlights

  • Strong top line growth delivered across the business
    • Focus on accelerating Packaged division in line with strategic plan
    • Continued accelerated momentum in International Packaged geographies
  • Significant progress on implementation of Out of Home (OoH) Strategic Review
  • Impacts of inflation actively managed

Financial highlights

  • Group revenue increased by 6.6% to £85.5m (H1 2022: £80.2m)
    • Packaged revenues +10.4% to £64.5m (H1 2022: £58.5m)
    • International Packaged revenues +24.6% to £21.5m (H1 2022: £17.2m)
      – Middle East revenue +17.5%
      – Continued momentum in Africa leading to +26.1% growth
      – ROW markets +29.8%
    • UK Packaged revenues +4.5% to £43.1m (H1 2022: £41.3m)
      – Ongoing focus on value over volume
    • OoH revenues down 3.5% to £21.0m (H1 2022: £21.8m)
      – Reflects planned reduction in activity post OoH Strategic Review
  • Gross margin % slightly lower at 41.1% (H1 2022: 42.8%)
    • Absolute gross margin increased by £0.8m
    • Cost of goods inflation recovered through price and mitigating actions
  • Exceptional charge of £1.1m largely relating to the Group Systems Review and OoH Strategic Review
  • Strong cash and cash equivalents at £56.1m (H1 2022: £49.2m, 31 December 2022: £56.3m), increased interest receipts
  • Increased interim dividend of 12.6p (H1 2022: 12.4p)
  • Confidence in 2023 Group expectations6 which remain unchanged

1 Excluding Exceptional items
2 EBITDA is the statutory profit before tax, interest, depreciation, and amortisation
3 Free Cash Flow is the net increase in cash and cash equivalents before acquisition funding and dividends
4 Adjusted return on capital employed is the adjusted operating profit divided by the average period-end capital employed
5 Statutory return on capital employed is the operating profit divided by the average period-end capital employed
6 FY23 expectations refers to a Group compiled market consensus of adjusted PBT £25.2m

We are pleased with our encouraging first half performance which again reflects the strength of the Vimto brand. Particularly pleasing is the growth in our core Packaged business, and the continued accelerated momentum across our international markets with very strong performances in Africa, the Middle East and the rest of the world.

The Group achieved significant strategic progress during the period, particularly in relation to our Out of Home business where we are making positive changes to simplify operations and focus on the areas of greatest opportunity and profitability. We are on-track to deliver the material benefits of these changes from FY 2024. Meanwhile, we remain focused on accelerating growth in Packaged, both in the UK and internationally, in line with our strategic plan.

We are mindful that consumer spend is still under pressure from continuing high levels of inflation. However, the Group’s track record, strong brands and diversified business model, alongside the resilience of the wider soft drinks market, support the Board’s confidence in the Group’s long-term growth prospects, and that the Group’s Adjusted PBT for FY 2023 will be in line with expectations.

Andrew Milne, Chief Executive Officer

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