Based in Merseyside, Nichols sells Vimto and other soft drinks brands across the UK and to 85 countries worldwide and it has taken a big hit from the COVID-19 pandemic. Tony McDonough reports
Vimto maker Nichols says the “unequalled challenges” of 2020 sent both revenue and profit tumbling despite shows of “resilience” in its international markets.
Based in Merseyside, 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.
In its results for the year to December 31, 2020, Nichols says the impact of the COVID-19 pandemic sent revenue plunging almost 20% to £118.7m from £147m in 2019. Pre-tax profit fell almost 80% to £6.5m, down from £32.4m in 2019.
Stock market-listed Nichols took the biggest hit in its UK ‘out of home’ market. This refers to sales of its products in hospitality outlets such as cafes, bars and hotels. For much of 2020, such businesses were either closed due to lockdown or saw footfall severely restricted.
Consequently, Nichols’ revenues in the UK out of home market fell by 22% to £91.6m, driven by a 61.4% reduction within the sector. However, within this, the Vimto brand’s value increased by 6.7% against a soft drinks market performance of +2.5%, reflecting further market share gains.
Although sales also fell in its international markets, the decline was less steep with sales down 8.3% to £27m. Vimto is heavily consumed in the Middle East, particularly during the holy month of Ramadan. During the period Muslims fast from dawn until sunset and Vimto provides a quick boost of sugar-filled energy during the evening.
Sales of Vimto remained resilient during this period, Nichols said, despite COVID-19 restrictions in the Middle East. Combined with African sales growth of 7.4% to £14m and rest of world sales growth of 17.3% to £5.7m, the business was relatively pleased with its performance outside of the UK.
Cash and cash equivalents at the end of 2020 totalled £47.3m (2019 £40.9m), marginally ahead of the half-year position of £46.8m. Nichols says it took “prudent measures” to conserve cash within the business throughout the year.
Chairman John Nichols said: “The COVID-19 pandemic presented us with unequalled challenges in 2020 and our first and most important objective through this unprecedented period has been the protection and wellbeing of our employees and customers.
“Throughout these difficult times, our colleagues have consistently demonstrated their values and commitment to our business, and I would like to wholeheartedly thank everyone for their efforts.
“The strength of the Vimto brand, the group’s robust balance sheet and our diversified business model has ensured a resilient financial performance in the period despite the challenging trading conditions across our markets.
“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 skill and commitment of our colleagues, remains well placed to deliver its long-term strategic ambitions.”