Merseyside Vimto maker Nichols sees 4.2% rise in first quarter revenues but sales to the hospitality sector fall 7.8% amid cost-of-living crisis. Tony McDonough reports
Vimto maker Nichols says the cost-of-living crisis has caused sales to the hospitality sector to fall 7.8% to £9.2m in the first three months of 2023.
In a trading update to the stock exchange on Wednesday, Newton-le-Willows-based Nichols said overall sales for the first quarter of the year were up 4.2% to £41.2m.
Its best performing division was in its so-called packaged businesses. This is where it sells to major retailers and wholesalers. Revenue was up 7.7% to £32m mainly driven by international sales. UK packaged sales were “marginally” Q1 2022.
Nichols sells Vimto and other soft drinks brands, including SLUSH PUPPiE Feel Good, Starslush, ICEE, Levi Roots and Sunkist, across the UK and more than 70 countries.
Vimto is particularly popular in the Muslim world during the holy month of Ramadan. It provides a quick boost of sugar-filled energy following the dawn ’til dusk fast.
At the beginning of March, Nichols published its full-year results for 2022. These showed revenues of £164.9m – 14.3% up on the previous year. Pre-tax profits hit £13.8m against a £17.7m loss the previous year.
During the pandemic Nichols took the biggest hit in its ‘out of home’ division. This is the part of the business that supplies its products to hospitality outlets such as cafes, bars and hotels as well as leisure venues.
And this division continues to face headwinds due to the cost-of-living crisis. In the full-year results Nichols warned of a “challenging year” ahead due to inflationary pressures.
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In its trading update on Wednesday, the company added: “The group continues to take actions to mitigate the expected significant inflationary pressure in line with forecasts.
“Expectations for the full year remain unchanged and the board remains confident in its long-term strategic growth plans.”
On February 1 Liz McMeikan joined the group as a non-executive director. Subject to approval of the AGM, she will become non-executive chair of Nichols following the retirement of John Nichols. He will remain on the board.