A post-pandemic recovery in the cafes, bars and hotels sector helps Liverpool city region Vimto maker Nichols grow profits by almost 27%. Tony McDonough reports
Vimto maker Nichols saw a surge in sales through hospitality outlets in the six months to June 30 pushing up pre-tax profits by almost 27%.
This helped offset more disappointing sales in the UK retail market. Nichols’ so-called ‘packaged’ route to market, which is through retail outlets, saw sales dip 4.3% as UK consumer spending slowed.
In its interim results, stock market-listed Nichols, which is based in Newton-le-Willows saw revenues rise 19.1% to £80.2m in the half-year period. Adjusted pre-tax profits were £11.3m, a rise of almost £27%.
The firm also published a separate pre-tax profit figure of £10.1m. This included an exceptional cost of £1.2m which relates to the costs of switching of the making of its dilutes range to a different manufacturer.
In January Nichols reported it was making a string recovery from the pandemic but added a write-down in the value of its business has wiped out profits for 2021.
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.
During the six-month period international revenues fell by 7.2% to £17.6m as various markets were impacted by logistics challenges, particularly in the first quarter of 2022. It was also impacted by the phasing of shipments between the first and second half of the year.
UK revenues increased by 29.3% to £62.6m with the biggest boost coming from the ‘out of home market’. This refers to sales in hospitality outlets. Sales via this route soared by 131.9% as the sector recovered from the pandemic.
Nichols’ board has started a strategic review of the group’s out of home route to market. The review is progressing and it expects to report on its findings at the end of this financial year.
Chairman John Nichols said: “In the UK, the Vimto brand continues to outperform the broader squash market. And the group’s out of home route to market experienced good growth as the wider leisure sector continues to recover from the impact of the pandemic.
“After some disruption to shipments affecting our International business in Q1, I am pleased to report a recovery in Q2 which has so far continued into the second half of the year.
“While the Group is not immune to the significant and accelerating inflationary pressures impacting the consumer and the soft drinks market, we have taken swift mitigating actions where possible. The group’s adjusted expectations for the full year remain unchanged.”