Final Results

Nichols PLC 23 March 2005 Date: Embargoed until 07.00hrs, Wednesday 23 March 2005 Contacts: John Nichols, Executive Chairman Brendan Hynes, Group Finance Director Nichols plc Telephone: 01925 222222 Website: www.nicholsplc.co.uk Alistair Mackinnon-Musson Philip Dennis Hudson Sandler Telephone: 020 7796 4133 Email: nichols@hspr.co.uk Photographs available: On request from Hudson Sandler, as above Nichols plc PRELIMINARY RESULTS Nichols plc, the soft drinks group, announces its preliminary results for the year to 31 December 2004. The group has two principal operations: Soft Drinks (primarily involved in the sale of soft drinks, including Vimto, throughout the world and Sunkist in the UK) and Beverage Systems (Cabana, soft drinks on draught and Balmoral, supplier of hot beverage systems). Highlights: • Operating profits on continuing activities up 20.3% • Soft Drinks' sales up 7.6% and operating profits up 13.2% • Beverage Systems' sales up 1.4% and operating profits up 125% • Successful disposal of Nichols Foods for £11.6m - strategic review now largely complete • Group debt significantly reduced to £353,000 from £13.5m • Post year-end acquisition of the Panda soft drink brand strengthens portfolio • Panda integration into the Soft Drinks Operation is well advanced - pleasing results so far Commenting John Nichols, Chairman, said: '2004 was one of the most eventful years in the group's recent history, culminating in the disposal of Nichols Foods and Stockpack. As a result, Nichols plc today comprises a highly focused group with a balance sheet that is substantially stronger than a year ago. We enter 2005 financially robust'. 'Reflecting on the year as a whole, we can be pleased with the improvement in operating profits on continuing operations. We will continue to develop and adapt our business in 2005 and the acquisition announced at the end of January of the Panda soft drink brand is testimony to this. The integration of Panda into our Soft Drinks Operation is now well advanced and we are very pleased with the results so far.' 'Looking forward, although trading conditions are likely to remain competitive, we expect to make further progress this year.' Chairman's Statement 2004 was one of the most eventful years in the group's recent history, culminating in the disposal of Nichols Foods and Stockpack ('Nichols Foods') for £11.6 million in cash, as announced in November 2004. As a result, Nichols plc today comprises a highly focused group with two operations, namely Soft Drinks and Beverage Systems. 2004 also saw the group transferring its listing from the Official List of the London Stock Exchange to AIM, which has already proved to be more appropriate and cost effective for a group of our size. Results The strategic review that began in 2003 has delivered a number of benefits to the group, including significantly improved quality of earnings and return on capital employed. Borrowings have also been substantially reduced due to strong operational cash flows throughout the year and the disposal of Nichols Foods. As a result, our balance sheet is materially stronger than a year ago and we therefore enter 2005 with a more focused business that is financially robust. Sales at our Soft Drinks Operation in the year to 31 December 2004 increased by 7.6% to £29.6 million (2003: £27.5 million) and operating profits were up 13.2% to £6.0 million (2003: £5.3 million). Combining the turnovers of Balmoral and Cabana our Beverage Systems Operation produced sales up 1.4% to £21.1 million (2003: £20.8 million) and operating profits up 125% to £0.9 million (2003: £0.4 million). At the group level, our consolidated results were affected by the disposal of Nichols Foods. Pre-tax profits (before exceptional items) and excluding the results of Nichols Foods from the end of October 2004 were £6.4 million (2003: £6.6 million) on group turnover of £88.1 million (2003: £97.1 million), again excluding two months of Nichols Foods. For comparative purposes, in the year to 31 December 2003 Nichols Foods contributed a profit before tax of £0.23 million in the first 10 months of 2004 (2003: £1.59 million) Net debt reduced to £353,000 from £13.5 million in 2003, inclusive of the proceeds of the sale of Nichols Foods (£11.6 million) and a further freehold property to the value of £1.7 million. Additionally, surplus property at Golborne is currently being marketed at £6 to £7 million. The disposal of Nichols Foods gave rise to an exceptional charge of £10.6 million, including £6.1 million of goodwill previously written off to reserves. Further cash costs of £1.8 million were incurred on restructuring the group, post the disposal and we have also taken an impairment charge of £0.5 million on our remaining freehold property, which the Board believes is prudent in the current property market. In aggregate an exceptional charge of £12.9 million has therefore been taken against profits in 2004 (2003: £2.8 million). Earnings per share (before exceptional items) and excluding Nichols Foods for two months were 12.31 pence (2003: 12.47 pence). The directors recommend a final dividend of 5.80 pence per share (2003: 5.80 pence) maintaining the total dividend for the year at 8.80 pence. This will be paid on the 13 May 2005 to shareholders registered on 15 April 2005. The ex-dividend date is 13 April 2005. Our Markets In a market where conditions remain fiercely competitive, sales within our Soft Drinks Operation increased steadily last year, despite the poor summer weather. This performance was built on the Vimto brand's growing success in the ready-to-drink and dilutable sectors. During 2004, Vimto Cordial recorded its highest ever level of market share in the 'red-black' sector in which it trades. Increased franchising and licensing agreements have also taken the Vimto brand to new consumers in a variety of new product categories, including Vimto Chewy Sweets and Bon Bons. Internationally, the Vimto brand continues to demonstrate strong growth in its existing Middle East markets and is increasing distribution and sales in new markets across Africa, Asia and further Middle Eastern markets not previously supplied. In the Beverage Systems Operation, Cabana, our UK soft drinks on draught business also experienced tough market conditions as the poor summer weather adversely affected the business, resulting in a disappointing sales performance. I am pleased to report, however, that in 2004 Balmoral, our hot beverage dispense business, reversed its declining performance of 2003. Balmoral grew its business through a combination of increased sales to existing customers and placements of machines in new outlets. Our People The support, enthusiasm and commitment of all Nichols employees, especially throughout the period of change, was much appreciated by the Board and I would like to thank them on your behalf for their continuing dedication. As shareholders may be aware, the disposal of Nichols Foods was made to a team led by Gary Unsworth, the former Group Managing Director of Nichols plc and an original founder of the Nichols Foods business. I would like to take this opportunity on behalf of everyone connected with our group to thank Gary for his efforts and commitment whilst at Nichols and to wish him, and all our former colleagues who are now part of Gary's business, every success in the future. Outlook Reflecting on the year as a whole, we can be pleased with the improvement in operating profits on continuing operations. We will continue to develop and grow our business in 2005 and the acquisition announced at the end of January of the Panda soft drink brand is testimony to this. The integration of Panda into our Soft Drinks Operation is now well advanced and we are very pleased with the results so far. We are anticipating Panda sales of around £10 million in 2005, but with limited profit impact in its first year, as there are a number of costs associated with moving the brand into our distribution infrastructure Looking forward, although trading conditions are likely to remain competitive, we expect to make further progress this year. John Nichols Chairman, Nichols plc 23 March 2005 Consolidated profit and loss account year ended 31 December 2004 Before Exceptional Total Before After exceptional items exceptional exceptional items items items 2004 2004 2004 2003 2003 £'000 £'000 £'000 £'000 £'000 Turnover - continuing activities 50,741 - 50,741 48,296 48,296 - discontinued operations 37,332 - 37,332 48,814 48,814 88,073 - 88,073 97,110 97,110 Cost of sales 51,971 - 51,971 60,511 60,511 Gross profit 36,102 - 36,102 36,599 36,599 Net operating expenses 28,949 2,291 31,240 29,257 33,251 Operating profit - continuing activities 6,920 (2,291) 4,629 5,751 4,251 - discontinued operations 233 - 233 1,591 (903) 7,153 (2,291) 4,862 7,342 3,348 Disposal of subsidiary undertakings - 11,062 11,062 - - Net interest payable 709 - 709 790 790 (Loss)/Profit on ordinary activities before taxation 6,444 (13,353) (6,909) 6,552 2,558 Tax on profit/(loss) on ordinary 1,951 (436) 1,515 2,018 820 activities (Loss)/Profit for the financial year 4,493 (12,917) (8,424) 4,534 1,738 Equity dividends 3,253 - 3,253 3,253 3,253 Retained loss for the year 1,240 (12,917) (11,677) 1,281 (1,515) Loss/earnings per share (basic) (23.08p) 4.78p Loss/earnings per share (diluted) (23.08p) 4.77p Earnings/loss per share (basic) before 12.31p 12.47p exceptional items Earnings/loss per share (diluted) before 12.28p 12.44p exceptional items Dividends per share 8.80p 8.80p There were no recognised gains or losses in 2004 or 2003 other than the (loss)/ profit for the year. Balance sheets at 31 December 2004 Group Parent 2004 2003 2004 2003 £'000 £'000 £'000 £'000 Restated Restated Fixed assets Intangible assets 1,587 1,623 - - Tangible assets 13,231 27,467 6,771 13,070 Investments: shares in group undertakings - - 5,272 11,453 14,818 29,090 12,043 24,523 Current assets Stocks 3,987 7,667 725 510 Debtors 13,203 21,088 24,563 18,422 Current asset investments 2,750 - 2,750 - Cash at bank and in hand 2,988 1,366 2,905 - 22,928 30,121 30,943 18,932 Creditors Amounts falling due within one year 14,125 26,051 23,509 18,110 Net current assets 8,803 4,070 7,434 822 Total assets less current liabilities 23,621 33,160 19,477 25,345 Creditors Amounts falling due after one year 2,592 6,173 2,592 6,173 21,029 26,987 16,885 19,172 Provisions for liabilities and charges 1,393 1,979 717 1,184 19,636 25,008 16,168 17,988 Share capital and reserves Called up share capital 3,697 3,697 3,697 3,697 Share premium account 3,255 3,255 3,255 3,255 Capital redemption reserve 1,209 1,209 1,209 1,209 Merger reserve - - 775 775 Other reserves (698) (859) (698) (859) Profit and loss account 12,173 17,706 7,930 9,911 Equity shareholders' funds 19,636 25,008 16,168 17,988 Consolidated cash flow statement year ended 31 December 2004 2004 2003 £'000 £'000 £'000 £'000 Cash inflow from operating activities 6,904 7,953 Returns on investments and servicing of finance Interest received 25 16 Interest paid (734) (806) Net cash outflow from returns on investments and servicing of finance (709) (790) Taxation (1,279) (1,540) Capital expenditure and financial investment Purchase of tangible fixed assets (2,070) (2,487) Purchase of intangible assets (62) - Proceeds of sales of tangible fixed assets 2,004 1,456 Net cash outflow from capital expenditure and financial investment (128) (1,031) Acquisitions and disposals Disposal of subsidiary undertakings 11,482 - Net cash inflow from acquisitions and disposals 11,482 - Equity dividends paid (3,253) (3,253) Cash inflow before use of liquid resources and financing 13,017 1,339 Management of liquid resources Increase in short term deposits with bank (2,750) - Financing (Decrease) in borrowings (8,806) (1,784) Proceeds of sale of own shares 161 68 Net cash outflow from financing (8,645) (1,716) Increase/(decrease) in cash in the year 1,622 (377) Nichols plc NOTES TO THE PRELIMINARY FINANCIAL INFORMATION Basis of Preparation The financial information set out above does not constitute the company's statutory accounts for the years ended 31 December 2004 or 2003, but is derived from those accounts. Statutory accounts for 2003 have been delivered to the Registrar of Companies and those for 2004 will be delivered following the company's Annual General meeting. The Auditors have reported on these accounts; their reports were unqualified and did not contain statements under s.237 (2) or (3) of the Companies Act 1985. Comparative figures have been restated to reflect the adoption of 'UTIF 38 - Accounting for ESOP trusts' by deducting the investments in own shares against shareholders' funds Earnings per Share The calculation of basic earnings per share is based on earnings attributable to ordinary shareholders divided by the weighted average number of shares in issue during the year. Shares held in the Employee Share Ownership Trust and Employee Benefit Trust are treated as cancelled for the purposes of this calculation. The calculation of diluted earnings per share is based on the basic earnings per share adjusted to allow for the assumed conversion of all dilutive options. Dividends The proposed final dividend of 5.80 pence per share (2003 : 5.80 pence), if approved, will be paid on 13 May 2005 to shareholders registered on 15 April 2005. In addition, an interim dividend of 3.00 pence was paid on 25 October 2004. Annual Report The annual report will be mailed to shareholders on or around 11 April 2005. Copies will be available after that date from: The Secretary, Nichols plc, Laurel House, Woodlands Park, Ashton Road, Newton-le-Willows, WA12 0HH. Annual General Meeting The Annual General Meeting will be held at the registered office, Laurel House, Woodlands Park, Ashton Road, Newton-le-Willows, WA12 0HH on Wednesday 11 May 2005 at 11.00 a.m. Copies of the announcement can be found on the Investors Relations section of the company's website: www.nicholsplc.co.uk - ENDS - This information is provided by RNS The company news service from the London Stock Exchange

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