New drinks launches helped Nichols to another bumper year despite a soggy UK beverages market, and new international distribution deals are likely to power a new phase of growth - although the shares already reflect those prospects.
UK sales climbed 15 per cent, more than double the growth rate of the wider UK market. But while most of the 7 per cent UK market growth reflected price increases, it was volume increases that account for most of Nichols' growth. Alongside new Vimto variants, the launch of a range of Levi Roots branded Caribbean drinks added £2.5m to sales in nine months and chief executive Brendan Hynes is confident that a new range of Weightwatchers branded drinks will be similarly successful. After launching in January via Tesco, further listings have been obtained in Asda and Sainsbury, and Mr Hynes says Nichols will continue investing heavily in marketing and new product development to support the brand.
Meanwhile, international prospects have been boosted by two new distribution deals with major partners in Africa, where sales climbed 28 per cent last year, and a joint venture between its Middle Eastern partner Aujan and Coca Cola. Middle Eastern sales climbed 24 per cent in 2011, shrugging of any impact of the Arab Spring.
Broker N+1 Brewin expects underlying pre-tax profits of £19.1m for 2012, giving EPS of 38.9p (2011: £18.1m/36.3p).
NICHOLS (NICL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 640p | MARKET VALUE: | £236m | |
| TOUCH: | 637-643p | 12-MONTH HIGH: | 649p | LOW: 410p |
| DIVIDEND YIELD: | 2.4% | PE RATIO: | 18 | |
| NET ASSET VALUE: | 99p* | NET CASH: | £20.1m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2007 | 55.3 | 8.00 | 15.5 | 10.4 |
| 2008 | 56.2 | 4.10 | 8.10 | 11.2 |
| 2009 | 72.4 | 11.9 | 22.9 | 12.2 |
| 2010 | 83.9 | 15.1 | 29.6 | 13.6 |
| 2011 | 98.9 | 18.1 | 36.3 | 15.3 |
| % change | +18 | +20 | +23 | +13 |
Ex-div: 28 Mar Payment: 4 May *Includes intangible assets of £13.7m, or 37p a share | ||||
