Liverpool city region-based Vimto maker Nichols sees a return to annual profits but warns of a ‘challenging year’ ahead due to inflationary pressures. Tony McDonough reports
Vimto maker Nichols returned to profit in 2022 finally emerging from a difficult period during the pandemic.
However, the Newton-le-Wilows-based firm warns of a “challenging year” ahead as inflationary pressures hit consumer spending. Stock exchange-listed Nichols said revenues for the years to December 31, 2022, were £164.9m – 14.3% up on the previous year.
It is reporting pre-tax profits of £13.8m. This is against a loss of £17.7m in 2021 due to the impact of the COVID pandemic on its ‘out of home’ (OoH) market.
OoH refers to sales of its products in hospitality outlets such as cafes, bars and hotels. These were significantly impacted by pandemic lockdown and restrictions during 2020 and into 2021.
Consequently, for its 2021 full-year results Nichols announced an exceptional charge of £39.5m turning a £21.8m profit into a £17.7 loss.
Executive chairman John Nichols said the company had completed a strategic review of its OoH division and was proposing a number of changes. These include exiting underperforming contracts and product categories.
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.
Sales across our International markets were £38m, an increase of 16.1%. Revenue in Africa increased 15%, following a 17.1% growth last year. This, said the company, was “particularly pleasing” given the long-term opportunity presented by these markets.
Mr Nichols said: “Vimto continues to perform well both in the UK and internationally and despite ongoing inflationary pressures, which accelerated during the second half, the brand has ensured a robust financial performance for the group.
“In the UK we have again seen the brand outperform in dilutes and continued to make significant progress in the ready to drink subcategory. Internationally, we continued to see solid growth across all regions.
“While 2023 will be a challenging year as cost of living pressures impact consumer demand across all routes to market, the group will continue to seek to mitigate these pressures through both cost efficiency and revenue management.”