INTERIM RESULTS

RNS Number : 8790W

Nichols PLC

05 August 2009

 



Date:	Embargoed until 07.00am, Wednesday 5 August 2009
Contacts:	John Nichols, Non-Executive Chairman
	Brendan Hynes, Group Chief Executive Taylor Purkis, Group Finance Director
	Nichols plc
	Telephone: [phone]
	Website:   www.nicholsplc.co.uk
	Alistair Mackinnon-Musson	Mark Brady
	Nathan Field	Brewin Dolphin
	Hudson Sandler	(NOMAD)
	Telephone:[phone]	Telephone: [phone]
	Email: [e-mail]	Website: www.corporatefinance.brewin.co.uk

Nichols plc

INTERIM RESULTS

'Full year profits are anticipated to be ahead of current market expectations'

Nichols plc, the soft drinks group announces its Interim results for the six months to 30 June 2009.

The group is a highly focused soft drinks and dispensed cold drinks business, comprising two operations: 

1.	Soft Drinks (sales and marketing of the Vimto brand throughout the world, where it is now available in over 65 countries, and of the Panda & Sunkist brands in the UK).
2.	Dispense Systems (namely the Cabana, Beacon, Cariel & Dayla cold soft drinks on draught 'dispense' businesses)

Highlights:

• Exceptionally strong first half

• Sales up 28%

• Pre-tax profits up 34%

• EPS (basic) up 38%

• Net cash increased by £3.3m to £9.5m

• Interim dividend up 8%

• UK sales of Vimto strongly out-performing the market

• International sales of Vimto up 23%

• Anticipation that full year profits will be ahead of current market expectations 

Commenting John Nichols, Non-Executive Chairman, said:

'Despite the economic doom and gloom, we have had an exceptionally strong first half - which makes this success even more pleasing.  We expect that we will continue to grow during the second half and for the full year, we anticipate that profits will be ahead of last year and also ahead of current market expectations'.

Chairman's Statement

I am delighted to report the group has experienced an exceptionally strong first half, despite the back drop of global economic uncertainty. The fact that significant growth in sales, profits and cash was achieved in a recession makes this success even more pleasing.  

Results

Sales in the six months to 30 June 2009 were up 28.4% to £37.5 million (2007: £29.2 million) and profit before tax was up 34.4% to £4.3 million (2008: £3.2 million).  

Net cash on 30 June 2009 increased to £9.5 million, £3.3 million ahead of last year (2008: £6.2 million).

Earnings per share (basic) increased by 38.5% to 8.74 pence (2008: 6.31 pence). 

A feature during the first half of 2009 was currency volatility, in particular with the US Dollar and the Euro against Sterling.  As a result, we incurred a £0.3 million currency charge in the period. US dollar based commodity prices softened, however, which helped to mitigate the overall adverse currency impact.

Soft Drinks Operation

In the UK, the Vimto brand grew by 13.4% during the first half, against a total soft drinks market that decreased by 1.9% for the same period (AC Nielsen 26 weeks to 13 June 2009).  Sales of carbonated Vimto were up 14.8%, with sales of still Vimto up 12.5%, significantly out-performing the market in each category.  These strong gains were largely achieved by opening up new distribution points, underpinned by our increased investment in marketing. 

Throughout the summer we are continuing to support the Vimto brand with a new TV and multi-media advertising campaign themed 'seriously mixed up fruit' and we are very pleased with the results.

Internationally, sales of Vimto increased by 22.6%.  Vimto continues to grow in Africa and on a like for like basis in the Middle East.  First half sales into the Middle East benefited from increased product shipments compared to 2008, in order to build local stocks ahead of the month of Ramadan. 

We are also investing for future growth by seeding new overseas markets; during the first half, initial sales were made in South Africa and China.  

Dispense Operation

With the Group's distributor model now firmly established and with reduced focus on the pub and club sectors, our Dispense Operation has again delivered significant sales and profit growth.

On 10 December 2008, we announced the acquisition of 50% of Dayla Liquid Packing Limited, a business that had previously supplied some product to the Group's Cabana business.  I am pleased to report that this joint venture is so far performing well, with Dayla now manufacturing all of Cabana's branded products.  The business also continues to grow its own share of the premium juice market.  We have an option to purchase the remaining 50% of Dayla in 2011 or 2012.

Dividend

Given our robust financial performance in the first half, together with strong cash generation, I am pleased to report the Group is able to continue its progressive dividend policy.  The Board has therefore approved an 8.0% increase in the Interim dividend, to 4.05 pence per share (2008: 3.75 pence).

The interim dividend will be paid on 2 September 2009 to shareholders registered on 14 August 2009. 

Outlook

We have had a very strong start to the year and have continued to outperform the market.  The soft drinks market generally appears to be resilient, particularly given the wider pressures on consumer spending.

The Board and management team remain committed to building our brand and market position for the long term, both in the UK and overseas. 

We also expect to grow during the second half, though due to the phasing of our sales and our investment behind the Vimto brand, this will be at a lower rate than in the first half.  For the full year, we anticipate that profits will be ahead of last year and also ahead of current market expectations.

John Nichols

Non-Executive Chairman

5 August 2009

   CONSOLIDATED INCOME STATEMENT

	Unaudited	Unaudited	Audited	Audited
			before  exceptional  items	after  exceptional items
	Half year ended  30 Jun 2009	Half year ended  30 Jun 2008	Full year ended  31 Dec 2008	Full year ended  31 Dec 2008
	£'000	£'000	£'000	£'000
Revenue	37,530	29,152	56,221	56,221
Operating profit	4,340	3,145	9,804	3,864
Finance income	42	118	288	288
Finance expense	(60)	(61)	(54)	(54)
Profit before taxation	4,322	3,202	10,038	4,098
Taxation	(1,127)	(876)	(2,732)	(1,141)
Profit for the financial period	3,195	2,326	7,306	2,957
Earnings per share (basic)  - all activities	8.74p	6.31p		8.10p
Earnings per share (diluted) - all activities	8.63p	6.31p		8.10p
Dividends paid per share	7.40p	6.90p		10.65p

  CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 

	Unaudited		Unaudited		Audited
	Half year ended 30 Jun 2009		Half year ended 30 Jun 2008		Full year ended 31 Dec 2008
	£'000		£'000		£'000
Defined benefit plan actuarial loss	0		0		(1,286)
Deferred taxation on pension obligations	0		0		132
Income and expense recognised directly in equity	0		0		(1,154)
Profit for the financial period	3,195		2,326		2,957
Total recognised income and expense for the period	3,195		2,326		1,803

  CONSOLIDATED STATEMENT OF FINANCIAL POSITION

	Unaudited		Unaudited		Audited
	30 Jun 2009		30 Jun 2008		31 Dec 2008
	£'000		£'000		£'000
ASSETS
Non-current assets
Property, plant and equipment	1,820		2,092		2,006
Goodwill	9,891		11,150		9,521
Deferred tax assets	2,705		1,197		2,705
Total non-current assets	14,416		14,439		14,232
Current assets
Inventories	3,804		2,880		2,758
Trade and other receivables	17,200		16,059		13,575
Cash and cash equivalents	9,512		6,241		6,048
Total current assets	30,516		25,180		22,381
Total assets	44,932		39,619		36,613
LIABILITIES
Current liabilities
Trade and other payables	18,391		11,218		10,136
Current tax liabilities	1,198		633		1,308
Provisions	11		446		181
Total current liabilities	19,600		12,297		11,625
Non-current liabilities
Pension obligations	3,567		3,635		3,567
Deferred tax liabilities	155		404		155
Total non-current liabilities	3,722		4,039		3,722
Total liabilities	23,322		16,336		15,347
Net assets	21,610		23,283		21,266
EQUITY
Share capital	3,697		3,697		3,697
Additional paid in capital	3,255		3,255		3,255
Capital redemption reserve	1,209		1,209		1,209
Other reserves	(713)		(492)		(574)
Retained earnings	14,162		15,614		13,679
Total equity	21,610		23,283		21,266

  CONSOLIDATED STATEMENT OF CASH FLOWS

	Unaudited Half year ended  30 Jun 2009		Unaudited Half year ended  30 Jun 2008		Audited Full year ended 31 Dec 2008
	£'000	£'000	£'000	£'000	£'000	£'000
Profit for the financial period		3,195		2,326		2,957
Cash flows from operating activities
Adjustments for:
Depreciation	315		346		656
Loss on sale of property, plant and equipment	6		9		20
Impairment of goodwill and property, plant and equipment	0		0		5,615
Equity-settled share based payment transactions	0		50		543
Interest receivable	(42)		(118)		(288)
Interest payable	60		61		54
Taxation expense recognised in the income statement	1,127		876		1,141
Change in inventories	(1,046)		(371)		342
Change in trade and other receivables	(3,625)		(2,882)		347
Change in trade and other payables	8,255		2,339		(1,032)
Change in provisions	(170)		(235)		(353)
Change in pension obligations	0		0		(588)
		4,880		75		6,457
Cash generated from operating activities		8,075		2,401		9,414
Tax paid		(1,237)		(1,253)		(2,595)
Net cash generated from operating activities		6,838		1,148		6,819
Cash flows from investing activities
Interest received	42		118		288
Proceeds from sale of property, plant and equipment	9		40		135
Acquisition of property, plant and equipment	(144)		(38)		(220)
Acquisition of subsidiary, net of cash acquired	0		(240)		0
Acquisition of joint venture, net of cash acquired	0		0		(2,908)
Acquisition of joint venture's net overdraft	0		0		(131)
Additional consideration in respect of a prior acquisition	(370)		0		(480)
Payment on settlement of pension obligations	0		0		(809)
Net cash used in investing activities		(463)		(120)		(4,125)
Cash flows from financing activities
Interest paid	(60)		(61)		(11)
Repurchase of own shares	(139)		0		(535)
Dividends paid	(2,712)		(2,540)		(3,914)
Net cash used in financing activities		(2,911)		(2,601)		(4,460)
Net increase/(decrease) in cash and cash equivalents		3,464		(1,573)		(1,766)
Cash and cash equivalents at beginning of period		6,048		7,814		7,814
Cash and cash equivalents at end of period		9,512		6,241		6,048

NOTES

1.	Basis of Preparation The financial information set out in this interim report does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The group's statutory financial statements for the year ended 31 December 2008, prepared under IFRS, have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified and did not contain a statement under Section 237 (2) or (3) of the Companies Act 1985. The interim financial information has been prepared in accordance with the recognition and measurement principles of International Financial Reporting Standards (IFRS) and on the same basis and using the same accounting policies as used in the financial statements for the year ended 31 December 2008. The interim financial statements have not been audited or reviewed in accordance with the International Standard on Review Engagement 2410 issued by the Auditing Practices Board.
2.	Dividends The interim dividend of 4.05p (2008: 3.75p) will be paid on 2 September 2009 to shareholders registered on 14 August 2009. The ex dividend date is 12 August 2009.
3.	Earnings Per Share Basic earnings per share are based on the weighted average number of shares in issue in the six months to 30 June 2009 of 36,569,053 (six months to 30 June 2008 of 36,840,924 and 12 months to 31 December 2008 of 36,480,421).

Cautionary Statement

This interim management report has been prepared solely to provide additional information to shareholders to assess the group's strategies and the potential for those strategies to succeed. The interim management report should not be relied on by any other party or for any other purpose.

- ENDS -

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