INTERIM RESULTS & BOARD APPOINTMENT

RNS Number : 5682L
Nichols PLC
20 July 2017
 

 

Date:

Embargoed until 0700 Thursday 20 July 2017

 

Contacts:

John Nichols, Non-Executive Chairman

Marnie Millard, Group Chief Executive Officer

Tim Croston, Group Chief Financial Officer
Andrew Milne, Group Commercial Director

 

Nichols plc

Telephone: 01925 222 222

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 & BOARD APPOINTMENT

 

Nichols plc ('Nichols' or the 'Group'), the soft drinks Group, announces its Interim results for the half year ended 30 June 2017 (the 'period').

 

Nichols is an international soft drinks business with sales in over 85 countries, selling products in both the Still and Carbonate categories. The Group is home to the iconic Vimto brand which is popular in the UK and around the world, particularly in the Middle East and Africa. Other brands in its portfolio include Feel Good, Starslush, Levi Roots and Sunkist.

 

Highlights:

 

*Profit Before Tax and EPS were adjusted measures in 2016, excluding the exceptional gain recognised.

 

Half Year ended

30 June 2017

Half Year ended

30 June 2016

% movement

 

£m

£m

 

 

 

 

 

Group Revenue

63.5

56.5

+12.4%

 

 

 

 

Operating Profit

12.7

11.9

+7.1%

Operating Profit margin 

20.0%

21.0%

 

 

 

 

 

Adjusted Profit Before Tax*

12.7

11.9

+6.8%

PBT margin

20.0%

21.1%

 

 

 

 

 

Adjusted EPS (basic)*

27.67

25.77

+7.4%

Interim dividend

10.1 pence

9.0 pence

+12.2%

 

John Nichols, Non-Executive Chairman, said:

 

"Nichols has delivered another strong performance in the first half of the year. Our sales momentum, which continues to outperform the UK market coupled with successful management of input costs has delivered solid profit growth."

 

 

 "Whilst we anticipate that market conditions will remain challenging during the second half of the year, we have a clear strategy and, underpinned by the strength of our brands and our diversified business model, we are confident of delivering full year results in line with expectations."

 

 

Chairman's Statement

 

The Group has delivered another strong performance in the first half of 2017. Revenue has increased by 12.4% (10.7% on a constant currency basis) and despite input cost challenges faced in the UK, the Group's Profit Before Tax grew by 6.8% with the interim dividend being increased by 12.2%.

 

Trading

 

Total Group revenue grew by 12.4% to £63.5m in the first six months of 2017 (H1 2016: £56.5m). Once again, the growth has been delivered from both our UK and international trading which highlights the strength of our diversified business model.

 

In the UK, revenue totalled £47.5m (H1 2016: £44.5m) an increase of 6.7% compared to the prior year. This performance compares favourably to the total soft drinks market which showed total growth of 2.9% in the same period (Nielsen year to date to 17 June 2017). Within the UK, the Vimto brand has continued to outperform the market with sales up 10% versus the same period in 2016. The Vimto brand's strong growth has been driven by both the Still and Carbonate segments and this sustained performance demonstrates the strength of our core brand.      

 

International revenues increased by 33.5% in the period to £16.0m (H1 2016: £12.0m), which is 24.7% on a constant currency basis. In Africa, revenues were up by 30.9% (20.2% on a constant currency basis), which continues the strong momentum reported in 2016 (H1 2016: +21.0%). Sales to the Middle East were 19.8% ahead of the same period in 2016 (15.9% on a constant currency basis). As anticipated, the first quarter benefited from shipments of concentrate for Ramadan 2017, some of which were originally scheduled for Q4 2016.

 

 

Acquisition of DJ Drink Solutions Limited

 

Acquisitions are a key component of our strategic growth plan, as demonstrated in recent years with our successful move into frozen beverages via the purchase of The Noisy Drinks Co. Limited and the addition of the Feel Good brand. We are therefore delighted to announce the acquisition of 100% of the shares in DJ Drink Solutions Limited ('DJ') on 2 June 2017. DJ is the largest of our Out of Home dispensed soft drinks distributors covering the North West and North East regions. This acquisition consolidates our route to market in the two regions and is consistent with our successful business model already operating in other regions in the UK.  

 

 

Dividend

 

Reflecting the Board's continued confidence in the outlook for the Group, the Board is pleased to announce an interim dividend of 10.1 pence per share, an increase of 12.2% compared to the prior year (2016: 9.0 pence). The interim dividend will be paid on 25 August 2017 to shareholders registered on 28 July 2017; the ex-dividend date is 27 July 2017. 

 

Board Appointment

Following John Longworth's departure at the AGM in April, we are delighted to announce the appointment of Helen Keays to the Board as an Independent Non-Executive Director and Chair of the Remuneration Committee with effect from 1 September 2017.

 

Helen has a background in marketing and brings a wealth of non-executive experience to the Board and is currently Senior Independent Director at Domino's Pizza Group plc and a Non- Executive Director and Chair of Remuneration at Communisis plc.

 

Helen Margaret Keays (aged 53) has held the following directorships within the five years prior to the date of this announcement:

Name

Current directorships

Previous directorships

Helen Keays

Communisis plc

Majestic Wine plc

 

Domino's Pizza Group plc

Mattioli Woods plc

 

SBT Trading Limited

 

 

There are no other disclosures in respect of AIM Rule 17 and Schedule 2 part (g).

Summary and Outlook

In summary, the Board is pleased with the Group's performance in the first half of 2017. We have delivered double-digit revenue growth, managed the industry wide input cost pressures with a 6.8% increase in Profit Before Tax and announce a 12.2% increase in the interim dividend.

 

Whilst we anticipate that market conditions will remain challenging during the second half of the year, the Board currently expects our full year earnings to be in line with expectations. 

 

 

John Nichols

Non-Executive Chairman

19 July 2017 

 

 

 

 

 

 

CONSOLIDATED INCOME STATEMENT

 

 

 

Half year ended


Half year ended

Full year ended

30-Jun-17

30-Jun-16

31-Dec-16

 

 

 

Unaudited before exceptional items

Unaudited exceptional items

Unaudited after exceptional items

Audited 

 

 

Unaudited

 

 

£'000

£'000

£'000

£'000

£'000

 

 

 

 

 

 

Revenue

63,504

56,520

-

56,520

117,349

 

 

 

 

 

 

Operating profit (pre-exceptional items)

12,717

11,869

-

11,869

30,325

Exceptional items

-

-

1,087

1,087

1,087

Finance income

74

118

-

118

214

Finance expense

(60)

(67)

-

(67)

(134)

 

 

 

 

 

 

Profit before taxation

12,731

11,920

1,087

13,007

31,492

 

 

 

 

 

 

Taxation

(2,534)

(2,423)

(217)

(2,640)

(6,015)

 

 

 

 

 

 

Profit for the financial period

10,197

9,497

870

10,367

25,477

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share (basic)

27.67p

25.77p

 

28.13p

69.13p

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share (diluted) - all activities

27.65p

25.74p

 

28.10p

69.07p

 

 

 

 

 

 

Dividends paid per share

20.30p

 

 

17.60p

26.60p

                   

           

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

 

 

 

Unaudited

 

Unaudited

 

Audited

 

Half year

ended

30-Jun-2017

 

Half year

ended

30-Jun-2016

 

Full year

ended

31-Dec-2016

 

 

£'000

 

£'000

 

£'000

 

 

 

 

 

 

Profit for the financial period

10,197

 

10,367

 

25,477

 

Items that will not be reclassified subsequently to profit or loss

 

Re-measurement of net defined benefit liability

-

 

-

 

(3,472)

 

 

 

 

 

 

Deferred taxation on pension obligations and employee benefits

-

 

-

 

601

 

 

 

 

 

 

Other comprehensive income for the period

-

 

-

 

(2,871)

 

 

 

 

 

 

 

Total comprehensive income for the period

10,197

 

10,367

 

22,606

 

 

 

 

 

 

 

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

 

 

 

Unaudited

 

Unaudited

 

Audited

 

30-Jun-2017

 

30-Jun-2016

 

31-Dec-2016

 

 

 

 

 

 

 

£'000

 

£'000

 

£'000

ASSETS

 

 

 

 

 

Non-current assets

 

 

 

 

 

Property, plant and equipment

9,924

 

8,019

 

8,715

Goodwill

29,415

 

22,593

 

23,061

Intangibles

6,006

 

6,163

 

6,084

Deferred tax assets

1,436

 

1,098

 

1,436

Total non-current assets

46,781

 

37,873

 

39,296

 

 

 

 

 

 

Current assets

 

 

 

 

 

Inventories

6,036

 

6,731

 

6,717

Trade and other receivables

36,957

 

33,045

 

31,508

Cash and cash equivalents

29,276

 

32,778

 

39,754

Total current assets

72,269

 

72,554

 

77,979

 

 

 

 

 

 

Total assets

119,050

 

110,427

 

117,275

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

Current liabilities

 

 

 

 

 

Trade and other payables

20,624

 

27,521

 

21,456

Current tax liabilities

2,607

 

2,315

 

2,355

Total current liabilities

23,231

 

29,836

 

23,811

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

Pension obligations

5,954

 

3,012

 

6,395

Deferred tax liabilities

1,101

 

1,104

 

1,101

Total non-current liabilities

7,055

 

4,116

 

7,496

 

 

 

 

 

 

Total liabilities

30,286

 

33,952

 

31,307

 

 

 

 

 

 

Net assets

88,764

 

76,475

 

85,968

 

 

 

 

 

 

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

(268)

 

(573)

 

(358)

Retained earnings

80,871

 

68,887

 

78,165

Total equity

88,764

 

76,475

 

85,968

 

 

 

 

 

 

 

 

 

 

CONSOLIDATED STATEMENT OF CASH FLOWS

 

 

 

Unaudited

Half year ended

30-Jun-2017

Unaudited

Half year ended

30-Jun-2016

Audited

Full year ended

31-Dec-2016

 

 

 

 

 

 

 

 

£'000

£'000

£'000

£'000

£'000

£'000

 

 

 

 

 

 

 

Profit for the financial period

 

10,197

 

10,367

 

25,477

 

 

 

 

 

 

 

Cash flows from operating activities

 

 

 

 

 

 

Adjustments for:

 

 

 

 

 

 

Depreciation

362

 

453

 

954

 

Amortisation

78

 

78

 

157

 

Exceptional credit

-

 

(1,087)

 

(1,087)

 

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

15

 

3

 

(6)

 

Finance income

(74)

 

(118)

 

(214)

 

Finance expense

60

 

67

 

134

 

Tax expense recognised in the income statement

2,534

 

2,640

 

6,015

 

Change in inventories

536

 

(2,395)

 

(2,382)

 

Change in trade and other receivables

(5,448)

 

(4,487)

 

(3,036)

 

Change in trade and other payables

(859)

 

7,429

 

1,229

 

Change in pension obligations

(441)

 

(881)

 

(970)

 

 

 

(3,237)

 

1,702

 

794

 

 

 

 

 

 

 

Cash generated from operating activities

 

6,960

 

12,069

 

26,271

 

 

 

 

 

 

 

Tax paid

 

(2,314)

 

(3,040)

 

(6,116)

Net cash generated from operating activities

 

4,646

 

9,029

 

20,155

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

Finance income

74

 

118

 

214

 

Proceeds from sale of property, plant and equipment

3

 

-

 

17

 

Acquisition of property, plant and equipment

(1,758)

 

(1,237)

 

(2,442)

 

Acquisition of subsidiary, net of cash acquired

(6,040)

 

(4,056)

 

(3,715)

 

Net cash used in investing activities

 

(7,721)

 

(5,175)

 

(5,926)

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

Funds from ESOT/ (share options exercised)

84

 

(26)

 

(107)

 

Dividends paid

(7,487)

 

(6,488)

 

(9,806)

 

Net cash used in financing activities

 

(7,403)

 

(6,514)

 

(9,913)

 

 

 

 

 

 

 

Net (decrease)/ increase in cash and cash equivalents

 

(10,478)

 

(2,660)

 

4,316

Cash and cash equivalents at beginning of period

 

39,754

 

35,438

 

35,438

Cash and cash equivalents at end of period

 

29,276

 

32,778

 

39,754

 

 

 

 

 

 

 

 

 

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 2016, 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 2016. 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.         New Accounting Standards

There are a number of new accounting standards, along with amendments and interpretations to standards, which are effective for future year-ends that have not been applied in preparing these Interim results. Management has in particular considered the potential impact of the implementation of IFRS 9, IFRS 15 and IFRS 16. It is expected that neither IFRS 9 nor IFRS 15 will have a material impact on the consolidated financial statements of the Group. Management are reviewing the impact of IFRS 16, which will become effective for the 31 December 2019 year end. The current total minimum lease payments on operating leased assets is £3.2m which is considered materially similar to the asset and liability that would be recognised if IFRS 16 were effective at the current time.

 

 

3.         Exceptional Gain in 2016

Having initially taken a 49% stake in The Noisy Drinks Co. Limited (Noisy) in March 2015, the Group acquired the remaining shares on 8 January 2016. Under International Financial Reporting Standards, the latter transaction triggered a deemed disposal of the initial 49% of the shares in Noisy and a subsequent acquisition of 100% of the shares. As a consequence, a profit on disposal amounting to £1.1m arose due to the increase in value of the 49% between March 2015 and January 2016. This profit was disclosed as an exceptional gain in 2016.  

 

4.         Dividends

The interim dividend of 10.1 pence (2016: 9.0 pence) will be paid on 25 August 2017 to shareholders registered on 28 July 2017. The ex-dividend date is 27 July 2017.

 

5.         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 2017 of 36,853,794 (six months to 30 June 2016 of 36,849,942 and 12 months to 31 December 2016 of 36,853,888).

 

 

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

 

Interim Report

 

The interim report will be available on the Company's website (www.nicholsplc.co.uk) on or around 20 July 2017.

 

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.


This information is provided by RNS
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