For soft-drinks maker Nichols (NICL), 2013 was all about improving profitability in the UK by toning down promotional activity on its carbonated drinks, rather than squeezing out sales growth at any cost. That focus has now paid off.
UK sales gained momentum over the year, rising 5 per cent in the second half to end the year 2 per cent higher at £86.8m. But the real strength of the results was in a 310 basis-point improvement in the gross margin, which boosted underlying pre-tax profit by a tenth to £22.5m. That was thanks to higher revenue and profit per case - carbonated volumes actually fell. The higher-margin stills category also outperformed the market, with sales of Vimto cordial up 11 per cent.
Overseas, a modest-looking 2 per cent increase in international revenue to £23.1m masked a 21 per cent jump in Africa. Contracts were also signed for Nepal and Burma, due to come on stream this year, while a new distribution model went live in the US. Since the year-end, Nichols has launched Vimto Squeezy, a product for the 'water enhancer' category.
N+1 Singer expects pre-tax profits of £23.9m in 2014, giving EPS of 50p (from £22.5m and 45.8p in 2013)
| NICHOLS (NICL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,151p | MARKET VALUE: | £ 426m | |
| TOUCH: | 1,149-1,152p | 12-MONTH HIGH: | 1,240p | LOW: 865p |
| DIVIDEND YIELD: | 1.7% | PE RATIO: | 30 | |
| NET ASSET VALUE: | 146p* | NET CASH: | £34.3m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 72 | 11.9 | 22.9 | 12.2 |
| 2010 | 84 | 15.1 | 29.6 | 13.6 |
| 2011 | 99 | 18.1 | 36.3 | 15.3 |
| 2012 | 108 | 20.5 | 41.4 | 17.3 |
| 2013 | 110 | 18.8 | 38.3 | 19.6 |
| % change | +2 | -8 | -7 | +13 |
Ex-div: 2 Apr Payment: 2 May *Includes intangible assets of £16.1m, or 43p a share | ||||
