Vimto maker Nichols has brushed aside a “challenging” UK market to notch up rising half-year sales and profits.
The group posted a 2% rise in half-year pre-tax profits to £13.3 million for the six months to June 30 on revenues 10.2% higher at £71.6 million.
It saw UK revenues rise 6.2% to £57.1 million as sales of Vimto lifted 4% – but this marked a sharp slowdown on the 9% growth seen a year earlier, when the UK was basking in a summer heatwave.
While UK trading conditions are expected to remain challenging, as a result of the group's diversified business model and sales momentum, the board is confident that full-year earnings will be delivered in line with its expectationsNichols
Chairman John Nichols said: “Nichols plc has delivered another good trading performance in the first half of 2019, with growth across both the UK and international markets.”
The group added: “While UK trading conditions are expected to remain challenging, as a result of the group’s diversified business model and sales momentum, the board is confident that full-year earnings will be delivered in line with its expectations.”
It also offered investors some cheer, announcing a 9.7% hike in its interim dividend to 12.4p.
Shares lifted 2% after its results.
Outside of the UK, international revenues rose to £14.5 million, up from £11.2 million, with Middle East sales more than doubling to £4.6 million and Africa turnover up 12.6% to £7.6 million.
Sales of still drinks were 11.6% higher thanks to demand for its Vimto dilute in the UK and Middle East, while sparkling drinks sales lifted 8.4%.
The group also announced on Wednesday that its chief financial officer of 10 years, Tim Croston, is stepping down in June next year.
It has kicked off the search for his successor.
Alex Smith, an analyst at Shore Capital, said Nichols’s results are “solid enough, albeit a weaker operating margin more than offset a better than expected top line”.