13th Mar 2014 11:03
LONDON (Alliance News) - Soft drinks group Nichols PLC Thursday reported a drop in profits for 2013, despite increasing revenues, after booking exceptional costs associated with management restructuring and an ongoing litigation claim regarding the sales of its Vimto cordial in Pakistan.
The Vimto, Sunkist and Panda drinks maker increased its total dividend for the year by 13% to 19.62 pence, up from 17.32 pence a year earlier. Basic earnings per share increased by 11% to 45.8 pence.
The group reported pretax profit of GBP18.3 million for 2013, after booking GBP3.7 million in exceptional items, compared with GBP20.5 million in 2012.
The group said the GBP3.7 million in exceptional costs included management restructuring costs, and a GBP2 million provision to cover the potential costs of a litigation claim from a licensee in Pakistan. The company is currently defending a claim related to the licensee's rights to manufacture and distribute Vimto cordial in Pakistan.
Revenues for 2013 increased by 2% to GBP109.9 million from GBP107.7 million a year earlier, boosted by strong UK sales momentum in the second half of the year for both carbonates and still drinks.
Nichols said the UK soft drinks market, in particular the carbonate sector, remained very competitive during the year, and said it also relied on promotions and discounting to drive volume.
The group said that, within its international business, it saw continued growth in African markets, and strong sales in the second half of the year in the Middle East, as Vimto sales benefited from the joint venture between its long standing partner Aujan Industries and Coca Cola. The group said that at the end of the year it signed new contracts for Nepal and Myanmar, both of which are due to come on line during 2014.
Nichols gave a cautious outlook for 2014, citing a challenging UK retail market, but said it is confident that it can maintain its current performance into the new financial year.
"We will continue to invest in our brands and grow distribution in both our UK and international markets. January saw the launch of the "Vimto Squeezy" product which takes the brand into the new 'water enhancer' category and in April consumers will see the new Vimto TV campaign," said Non-Executive Chairman John Nichols in a statement.
At year end, the group held net cash of GBP34.3 million, a 39% increase from GBP24.7 million a year earlier.
Nichols shares were trading down 0.3% Thursday morning at 1,155.00 pence per share.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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