The performance of beverages company Nichols (NICL) is still looking sweet despite the incoming sugar tax. All of its UK-owned brands will fall under the amount of sugar that would trigger the tax by the time it kicks in next April: the company has focused on drinks without added sugar and has reformulated existing products. Revenue from the UK business was up 6.7 per cent to £47.5m on the back of a double-digit sales rise for Vimto. The international business also fared well, with a 24.7 per cent increase in revenue at constant currency to £16m thanks to particularly strong sales in the Middle East and Africa.
As part of its growth plan Nichols acquired DJ Drinks Solutions, which supplies soft drinks for dispensers. In March 2015 the company took a 49 per cent stake in The Noisy Drinks Co, which it was required to sell prior to buying the entirety of the business in January 2016, booking a £1.1m profit on disposal since the value of the shares had increased in the time in-between. Strip out the disposal gain, and pre-tax profit actually rose 6.8 per cent to £12.7m.
Analysts at Numis expect pre-tax profit of £32.2m in the year to December 2017 and EPS of 70.6p, compared with £30.4m and 66.1p in 2016.
| NICHOLS (NICL) | ||||
| ORD PRICE: | 1,882p | MARKET VALUE: | £694m | |
| TOUCH: | 1,882-1,900p | 12-MONTH HIGH: | 1,961p | LOW: 1,373p |
| DIVIDEND YIELD: | 1.6% | PE RATIO: | 27 | |
| NET ASSET VALUE: | 241p* | NET CASH: | £29.3m | |
| Half-year to 30 June | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 56.5 | 13.0 | 28.1 | 17.60 |
| 2017 | 63.5 | 12.7 | 27.7 | 20.30 |
| % change | +12 | -2 | -2 | +15 |
| Ex-div: | 27 Jul | |||
| Payment: | 25 Aug | |||
| *Includes £35.4m of intangible assets, or 96p a share | ||||
