Vimto maker Nichols is reporting a 22% increase in revenues to £144.3m for 2021 but says sales in its key hospitality market are still significantly down on 2019.

In a trading update ahead of its full-year results announcement on March 2, Newton-le-Willows-based Nichols, which is listed on the Alternative Investment Market, said it expects full-year pre-tax profits to come in at between £21-£22m, in line with its previous guidance.

However, the company remains concerned about the performance of its ‘out of home’ (OOH) market. OOH refers to sales of its products in hospitality outlets such as cafes, bars and hotels. This has been badly impacted by pandemic lockdown and restrictions.

Out of home did show signs of a strong recovery in 2021 with revenues up 77% against 2020, but still 31% behind 2019, the last full year before 2019. As a result, Nichols is expecting a write-down of OOH assets.

As a whole, the Vimto brand has continued to deliver a strong performance. In the UK, Vimto brand value has increased by 5.6% YTD, according to brand value specialist Nielsen as at December 4, 2021.

Nichols sells Vimto and other soft drinks brands, including Feel Good, Starslush, ICEE, Levi Roots and Sunkist, across the UK and to 85 countries across the world. Vimto is particularly popular in the Muslim world during the holy month of Ramadan. Vimto provides a quick boost of sugar-filled energy following the dawn ’til dusk fast.

In the latest update it said its brand continued to see progress year-on-year in its international markets, with strong double digit revenue growth versus the prior year. Cash generation has remained strong through 2021 and cash and cash equivalents at the end of the period stood at £56.7m.

The statement added: “Given the ongoing impact of the coronavirus pandemic on the OoH drinks market, and current profitability within this route to market, the board is currently revisiting the estimates it uses to support the OoH balance sheet carrying value as part of preparing the group’s audited annual results.

“It is expected that the goodwill, or part of it, reported on the balance sheet will be impaired. The full review is currently underway and the group will report on the final outcome with its preliminary results. Any adjustment will be exceptional and non-cash.”