Based in Merseyside, Nichols exports Vimto and other soft drinks brands to 85 countries and says it has had a positive start to the year despite hospitality outlets being closed in lockdown. Tony McDonough reports
Merseyside Vimto maker Nichols says it has had a “positive” start to 2021 despite the continued closure of hospitality outlets selling its products due to the COVID-19 lockdown.
In March, Nichols reported that 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.
In its latest trading update to March 31, Newton-le-Willows-based Nichols says “strong growth” achieved by the Vimto brand in the UK and a “solid start” to the year for the group’s International business have largely offset significant declines in the UK out of home market.
As a result, total group revenue in the period decreased by only 5.9% to £30.7m against the prior year, despite the impact of the UK lockdown. With the lockdown now gradually coming to an end out of home sales are set to improve significantly.
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 its latest update, Nichols said: “The Vimto brand has continued to outperform the wider UK soft drinks market, achieving growth of 4.9% in value terms in the year to date versus 3.2% value growth across the wider UK soft drinks market.
“Across the group’s International markets, the strong momentum reported in the prior year has continued. Trading since the year end has remained very challenging in the group’s out of home route to market.
“Revenues in out of home were 91.9% lower in the period than those seen in the same period of 2020, as most of the group’s customers’ outlets remained closed.”
Despite the financial challenges posed by the ongoing pandemic, Nichols’ cash and cash equivalents at the end of the period remained strong at £43.1m (December 31, 2020: £47.3m).
The company added: “The board is confident that the group, underpinned by the strength of the Vimto brand and the group’s diversified business model, remains well placed to deliver its long-term strategic ambitions.
“Should the UK Government’s planned roadmap out of lockdown continue, and assuming the absence of further lockdowns later in the year, the board expects full year adjusted profit before tax to be broadly in line with current market expectations.”