Based in Merseyside, Nichols sells its famous Vimto brand all over the world but has seen the COVID-19 pandemic send revenues tumbling by almost a fifth. Tony McDonough reports
Vimto maker Nichols saw revenues plummet by almost a fifth in 2020 due to a “very challenging” trading environment caused by the COVID-19 pandemic.
Based in Newton-le-Willows, the company sells its famous Vimto soft drinks products around the world. Nichols reported strong growth in the UK and overseas during the 12 months to December 31, 2020.
However, progress in both of these markets was offset by significant falls in so-called ‘out-of-home’ sales. This refers to hospitality outlets such as cafes, bars and hotels, many of which have been closed, or been restricted, due to the pandemic.
As a result, total group revenue for 2020 fell 19.3% to £118.7m. Nichols said pre-tax profits for the full year would be in line with previous guidance issued in November of between £11m and £13m. This is significantly down on 2019’s figure of £37.2m. In the November update the company said it may have to cut jobs from the business.
Trading in the final quarter of 2020 remained tough with the reintroduction of tighter restrictions and lockdowns. During the three-month period, out-of-home were 84% lower than the same period in 2019.
Cash generation has remained strong through 2020 and, despite the financial challenges posed by the ongoing pandemic, cash and cash equivalents at the end of the period were £47.3m against £40.9m the previous year.
In the trading update, the stock market-listed firm said: “While 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 robust balance sheet, remains well placed to deliver its long-term strategic ambitions.”
Nichols will publish its 2020 preliminary results on March 3, 2021.