Press release date: 10th January 2024

Nichols plc, the diversified soft drinks group, is pleased to provide the following Trading Update for the 12 months to 31 December 2023 (“FY23”) and to announce the appointment of Matthew Nichols as a Non-Executive Director to its Board.

Trading Update

The Board is pleased to announce that the Group has delivered a strong performance in 2023 and expects to report FY23 Adjusted Profit Before Tax1 (“Adjusted PBT”) slightly above current market expectations2. Trading in the second half of the year has continued to progress well and in accordance with our growth strategy. In addition, we have begun to realise some of the benefits from the restructuring of our Out of Home (OoH) business earlier than initially anticipated.
Total Group Revenue during the year increased by 3.5% to £170.7m3 (FY22: £164.9m). We continued to perform well within our Packaged business, where sales were up by 6.1%3, with progress particularly strong in International where export sales across the year were up by 16.8%3. In line with the Group’s expectations, revenue from our OoH business continued to reduce as we exited from unprofitable accounts.
We are pleased that our Gross Margins have been largely maintained despite considerable inflationary pressures early in the year. This stability has allowed us to increase the level of investment in the long-term strategic development of the Group.
Cash generation has remained strong throughout the year and, at the end of December 2023, cash and cash equivalents were £67.0m3 (FY22: £56.3m). We have benefitted from increased interest receipts during the year.

Outlook

The Group continues to derive considerable benefit from its diversified business model, with an established UK position complemented by the enhanced growth opportunities within our International business. Within our Packaged business, we have continued our strategy of investment in extending our product range and in the development of our international markets during the year, both of which are expected to continue to provide growth over both the short and long term. The action taken to restructure our OoH division during 2023 is beginning to provide the anticipated benefits and the Company is confident that the business will contribute positively to overall Group performance during 2024.

The Group intends to accelerate the rate of investment in its longer-term development over the next 12 months in accordance with our established strategic plan. Whilst inflationary pressures now appear to be moderating in the UK, we remain aware of continued uncertainty affecting some of our markets but remain confident that necessary mitigating actions are in place.
The Group remains confident that it is well positioned to deliver its strategic plans and deliver sustainable shareholder returns, benefiting from the strength of its diversified business model, brands and financial position.

Andrew Milne, Chief Executive Officer of Nichols, commented on the Group’s trading update:
“Nichols has delivered a strong performance in FY23 making good progress against our strategic plans and achieving a PBT outcome ahead of market expectations. This is a great testament to the strength of the Group’s business model and brands, with our established UK position complemented by strong momentum internationally. Looking ahead into 2024 we remain focused on continuing to implement our strategic plans and delivering further progress against our long term ambitions.”

Non-Executive Director Appointment

The Group is also pleased to announce that Matthew (Matt) Nichols will join the Board as a Non-Executive Director with effect from 10 January 2024, pursuant to the terms of the Relationship Agreement between Nichols plc and the Nichols family, which entitles the family to two Non-Executive Board positions.

Matthew joined the Company in September 2006 and has held several senior roles within the Group. He currently holds the position of Commercial Director – International within the Group’s Packaged business and is a member of the Company’s Senior Leadership Team.

Liz McMeikan, Non-Executive Chair of Nichols, commented:
“The Board is delighted to announce the appointment of Matt Nichols as a Non-Executive Director. Matt is a highly valued member of the Company’s senior leadership team, responsible for the leading the Company’s successful International business. He will bring a welcome diversity of perspective and I look forward to the value his contribution will bring to the work of the Board.”

¹Excluding exceptional items
²Current Group compiled market consensus for Adjusted Profit before Taxation of £25.4m
³Unaudited