Interim Results and Acquisition

RNS Number : 8297T
Nichols PLC
23 July 2015
 

 

Date:

Embargoed until 0700 Thursday 23rd July 2015

 

Contacts:

John Nichols, Non-Executive Chairman

Marnie Millard, Group Chief Executive

Tim Croston, Group Finance Director

Nichols plc

Telephone:  01925 222222

Website:www.nicholsplc.co.uk

 

 

Alex Brennan

Richard Lindley

Hudson Sandler

N+1 Singer (Nominated Adviser)

Telephone:020 7796 4133

Telephone:  0207 496 3000

Email: nichols@hspr.com

 

 

 

Nichols plc

INTERIM RESULTS, ACQUISITION AND BOARD CHANGE

 

Nichols plc ('Nichols', the 'Group'), the soft drinks Group, announces its Interim results for the period ended 30 June 2015 (the 'period').

 

Nichols plc is a highly focused soft drinks business.  Its brand portfolio includes Vimto, which is sold in over 65 countries and Levi Roots, Sunkist and Panda which are sold in the UK.  The Group has a leading market position in both the "Still" and "Carbonate" drinks categories.

 

Highlights:

 

 

 

Half Year ended

30 June 2015

Half Year ended

30 June 2014

% movement

All references below are pre-exceptional items

£m

£m

 

 

 

 

 

Group Revenue (2014 restated )

54.7

54.7

0%

 

 

 

 

Operating Profit

10.7

9.9

8%

Operating Profit margin 

20%

18%

 

Profit Before Tax

11.0

10.0

9%

EPS (basic)

23.66p

21.23p

11%

 

 

 

 

Dividend

8.0p

7.1p

13%

 

John Nichols, Non-Executive Chairman, said:

 

"The Board are pleased with the Group's performance in the first half of 2015, with UK sales growth outperforming the market and Group profit increasing by 9%. We look forward to the incremental contribution from both the Feel Good brand and the acquisition of The Noisy Drinks Company Limited announced at our AGM earlier in the year."

 

 

Chairman's Statement

 

The Group has delivered another solid performance in the first six months of 2015. UK sales growth of 2.0% has outperformed the market, Group profit has increased by 9% and earnings per share is up by 11.4%.

 

 

Trading

 

Total Group sales were £54.7m, in line with the same period in 2014 (2014 restated: £54.7m). Profit Before Tax has increased by 9% to £10.9m (2014: £10.0m) delivering a 200 basis points improvement to the PBT margin as we continue to deliver our value over volume strategy.

 

UK sales have outperformed the market with a 2% increase in revenue in the first half of 2015 whilst the UK market has declined by 0.1% (source: Nielsen 6 months to 20 June 2015). Significantly, this performance has been driven by the Vimto brand with sales increasing by 3.4% in the period compared to 2014. Within the Vimto brand performance, the Still category has delivered strong growth of 8% whilst sales in Carbonate have declined by 3% reflecting the market trend in this heavily promoted category. On a like for like basis, excluding the discontinued Weight Watchers and Extreme brands, our UK sales increased by 2.8% in the period.

 

Export sales at the half year point are 5.8% behind the same period in 2014. This is due to delayed shipments to the Yemen as a consequence of the recent conflict in the country. Elsewhere, sales to Aujan Coca-Cola, our main partner in the Middle East, are ahead of the prior year. Sales to Africa are comparable at the half year (4% ahead on a constant currency basis).          

 

 

Dividend

 

Reflecting the Group's performance and the Board's continued confidence in the outlook, I am pleased to declare an interim dividend of 8.0 pence per share, an increase of 12.7% over the prior year (2014: 7.1 pence).

 

The interim dividend will be paid on 28 August 2015 to shareholders registered on 31 July 2015; the ex-dividend date is 30 July 2015. 

 

 

Acquisition

 

We are delighted to announce the acquisition of the Feel Good brand. Feel Good is an established range of premium juice drinks containing no added sugar and 100% natural ingredients. The brand is sold in the UK through the retail and on-trade channels, in addition there are export sales to mainland Europe.

 

The acquisition is a key part of our growth strategy and we plan to further develop the Feel Good brand across our established UK and international markets supported by increased marketing resource and investment.    

 

 

Board Change

 

We welcome Mr John Gittins (aged 55) who has been appointed to the Board as Independent Non-Executive Director and Chair of the Audit Committee. John is currently Finance Director at AIM listed Fairpoint Group plc and has over 20 years experience as PLC Executive and Non-Executive Director.

 

He will be replacing Mr Eric Healey who stepped down from the Board in March of this year.

 

 

Outlook

 

We are satisfied with the Group's results in the first half of 2015, in particular the continued strong performance from the Vimto brand in a challenging UK market.

 

Nichols plc is well positioned to continue its growth trend. The balance sheet remains strong and we look forward to the incremental contribution from both the Feel Good brand and the partial acquisition of The Noisy Drinks Company Limited announced at our AGM earlier in the year.  

 

In summary, the Board is confident that full year performance will be in line with market expectations.

 

 

 

 

John Nichols

Non-Executive Chairman

23 July 2015 

 

 

 

       CONSOLIDATED INCOME STATEMENT

           

 

 

Half year ended

30 Jun 2015

Half year ended

30 Jun 2014

Full year ended

31 Dec 2014

 

 

 

 

Unaudited

Unaudited before exceptional items

Unaudited exceptional items

Unaudited after exceptional items

Audited before exceptional items

Audited  after exceptional items

 

£'000

 

£'000

Restated

£'000

 

£'000

Restated

£'000

 

£'000

 

 

 

 

 

 

 

 

Revenue

54,716

54,669

-

54,669

109,205

109,205

 

 

 

 

 

 

 

Operating profit (pre exceptional items)

10,709

9,930

-

9,930

25,597

25,597

Exceptional items

-

-

(7,976)

(7,976)

-

(7,768)

Finance income

119

140

-

140

257

257

Finance expense

(60)

(60)

-

(60)

(164)

(164)

Share of results in Associate using the equity method

147

-

-

-

-

-

 

 

 

 

 

 

 

Profit before taxation

10,915

10,010

(7,976)

2,034

25,690

17,922

 

Taxation

(2,197)

(2,188)

1,715

(473)

(5,413)

(3,776)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit for the financial period

8,718

7,822

(6,261)

1,561

20,277

14,146

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share (basic)

- all activities

 

23.66p

21.23p

 

4.24p

 

38.39p

Earnings per share (diluted) - all activities

23.63p

21.21p

 

4.23p

 

38.34p

Dividends paid per share

15.30p

 

 

13.30p

 

20.40p

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

 

 

Unaudited

 

Unaudited

 

Audited

 

Half year

ended

30 Jun 2015

 

Half year

ended

30 Jun 2014

 

Full year

ended

31 Dec 2014

 

 

£'000

 

£'000

 

£'000

 

 

 

 

 

 

Profit for the financial period

8,718

 

1,561

 

14,146

 

Items that will not be reclassified subsequently to profit or loss

 

Remeasurement of net defined benefit liability

0

 

0

 

(2,796)

 

 

 

 

 

 

Deferred taxation on pension obligations and employee benefits

0

 

0

 

436

 

 

 

 

 

 

Other comprehensive expense for the period

0

 

0

 

(2,360)

 

 

 

 

 

 

 

Total comprehensive income for the period

8,718

 

1,561

 

11,786

 

 

 

 

 

 

 

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

 

 

Unaudited

 

Unaudited

 

Audited

 

30 Jun 2015

 

30 Jun 2014

 

31 Dec 2014

 

 

 

 

 

 

 

£'000

 

£'000

 

£'000

ASSETS

 

 

 

 

 

Non-current assets

 

 

 

 

 

Property, plant and equipment

5,235

 

4,791

 

4,817

Goodwill

16,447

 

16,447

 

16,447

Investment accounted for using the equity method

2,927

 

-

 

-

Deferred tax assets

1,699

 

1,321

 

1,699

Total non-current assets

26,308

 

22,559

 

22,963

 

 

 

 

 

 

Current assets

 

 

 

 

 

Inventories

4,696

 

5,694

 

4,712

Trade and other receivables

28,332

 

23,998

 

23,525

Cash and cash equivalents

31,814

 

32,903

 

34,483

Total current assets

64,842

 

62,595

 

62,720

 

 

 

 

 

 

Total assets

91,150

 

85,154

 

85,683

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

Current liabilities

 

 

 

 

 

Trade and other payables

22,419

 

20,187

 

19,486

Current tax liabilities

2,196

 

508

 

1,859

Provisions

-

 

9,812

 

-

Total current liabilities

24,615

 

30,507

 

21,345

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

Pension obligations

5,309

 

4,047

 

6,190

Deferred tax liabilities

70

 

-

 

70

Total non-current liabilities

5,379

 

4,047

 

6,260

 

 

 

 

 

 

Total liabilities

29,994

 

34,554

 

27,605

 

 

 

 

 

 

Net assets

61,156

 

50,600

 

58,078

 

 

 

 

 

 

EQUITY

 

 

 

 

 

Share capital

3,697

 

3,697

 

3,697

Share premium reserve

3,255

 

3,255

 

3,255

Capital redemption reserve

1,209

 

1,209

 

1,209

Other reserves

(560)

 

(598)

 

(560)

Retained earnings

53,555

 

43,037

 

50,477

Total equity

61,156

 

50,600

 

58,078

 

 

 

 

 

 

 

 

           CONSOLIDATED STATEMENT OF CASH FLOWS

 

 

Unaudited

Half year ended

30 Jun 2015

Unaudited

Half year ended

30 Jun 2014

Audited

Full year ended

31 Dec 2014

 

 

 

 

 

 

 

 

£'000

£'000

£'000

£'000

£'000

£'000

 

 

 

 

 

 

 

Profit for the financial period

 

8,718

 

1,561

 

14,146

 

 

 

 

 

 

 

Cash flows from operating activities

 

 

 

 

 

 

Adjustments for:

 

 

 

 

 

 

Depreciation

239

 

224

 

480

 

Loss/(profit) on sale of property, plant and equipment

1

 

(6)

 

(80)

 

Finance income

(119)

 

(140)

 

(257)

 

Finance expense

60

 

60

 

-

 

Share of result in associate

(147)

 

-

 

-

 

Tax expense recognised in the income statement

2,197

 

473

 

3,776

 

Change in inventories

17

 

(1,518)

 

(568)

 

Change in trade and other receivables

(4,824)

 

(1,277)

 

(787)

 

Change in trade and other payables

2,873

 

1,964

 

1,324

 

Change in provisions

-

 

7,794

 

(2,018)

 

Change in pension obligations

(881)

 

-

 

(653)

 

 

 

(584)

 

7,574

 

1,217

 

 

 

 

 

 

 

Cash generated from operating activities

 

8,134

 

9,135

 

15,363

 

 

 

 

 

 

 

Tax paid

 

(1,860)

 

(1,640)

 

(3,465)

Net cash generated from operating activities

 

6,274

 

7,495

 

11,898

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

Finance income

136

 

151

 

239

 

Proceeds from sale of property, plant and equipment

1

 

10

 

124

 

Acquisition of property, plant and equipment

(660)

 

(3,724)

 

(4,034)

 

Acquisition of subsidiary, net of cash acquired

-

 

(87)

 

(85)

 

Acquisition of business trade and assets

-

 

(335)

 

(305)

 

Acquisition of associate

(2,780)

 

-

 

-

 

Net cash used in investing activities

 

(3,303)

 

(3,985)

 

(4,061)

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

Funds provided to ESOT

0

 

0

 

(129)

 

Dividends paid

(5,640)

 

(4,900)

 

(7,518)

 

Net cash used in financing activities

 

(5,640)

 

(4,900)

 

(7,647)

 

 

 

 

 

 

 

Net (decrease)/increase in cash and cash equivalents

 

(2,669)

 

(1,390)

 

190

Cash and cash equivalents at beginning of period

 

34,483

 

34,293

 

34,293

Cash and cash equivalents at end of period

 

31,814

 

32,903

 

34,483

 

 

 

 

 

 

 

 

 

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 2014, 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 498 (2) or (3) of the Companies Act 2006.

 

            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 2014. The Interim Report has 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 8.0p (2014: 7.1p) will be paid on 28 August 2015 to shareholders registered on 31 July 2015.  The ex dividend date is 30 July 2015.

 

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 2015 of 36,849,257 (six months to 30 June 2014 of 36,843,875 and 12 months to 31 December 2014 of 36,846,564).

 

 

Interim Report

 

The interim report will be posted to shareholders and be available on the Company's website (www.nicholsplc.co.uk) on or around 29 July 2015.

 

 

Cautionary Statement

 

This Interim 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 Report should not be relied on by any other party or for any other purpose.

 

 

 

 

 

 

 


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