26th Jul 2012 07:00
Date: | Embargoed until 07.00am, Thursday 26 July 2012
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Contacts: | John Nichols, Non-Executive Chairman | |
Brendan Hynes, Group Chief Executive Tim Croston, Group Finance Director | ||
Nichols plc | ||
Telephone: 01925 222222 | ||
Website:www.nicholsplc.co.uk | ||
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Alex Brennan | Nick Tulloch | |
Hudson Sandler | N+1 Brewin (Nominated Adviser) | |
Telephone:020 7796 4133 | Telephone: 0131 529 0356 | |
Email: [email protected] | Website: wwwnplus1.brewin.com | |
Nichols plc
INTERIM RESULTS
Nichols plc, the soft drinks group, announces its Interim results for the period ended 30 June 2012.
Nichols plc is a highly focused soft drinks business. Its brand portfolio includes Vimto, which is sold in over 65 countries and Levi Roots, Weight Watchers, Sunkist & Panda which are sold in the UK. The Group has a leading market position in both the "Stills" and "Carbonates" drinks categories and also in the soft drinks on dispense market, where its brands include Cabana, Ben Shaws & Dayla.
Highlights:
·; Group Revenue up 10%
·; Export Revenue up 14%
·; Group Profit up 14%
·; EPS up 15%
·; Interim Dividend up 12.4%
·; Cash increased to £23.6m
Commenting John Nichols, Non-Executive Chairman, said:
"I am delighted to report another strong first half year performance from the Group, delivering healthy sales growth, a significant increase in profits and earnings per share along with extremely strong cash generation. This has been achieved despite very poor weather and the ongoing economic uncertainty affecting the UK."
Chairman's Statement
I am delighted to report another strong first half year performance from the Group, delivering healthy sales growth, a significant increase in profits and earnings per share along with extremely strong cash generation.
Sales growth has again been delivered across all our routes to market, led by our export sales which recorded a 14% increase on last year. Given the ongoing economic uncertainty, the UK retail environment in particular continues to be challenging resulting in an extremely competitive UK soft drinks market. Notwithstanding this, our UK business achieved solid sales growth of +8%.
In addition, profits before tax and earnings per share increased by 14% and 15% respectively.
Net cash generation was also very strong resulting in our net cash position increasing by £3.5m from the year end to £23.6 million as of 30 June 2012.
Results
| Half year ended 30 June 2012 | Half year ended 30 June 2011 | % movement |
| £m | £m |
|
Group Revenue | 55.4 | 50.5
| +10% |
Operating Profit | 8.3 | 7.2 | +14% |
Operating Profit R.O.S. | 15% | 14% |
|
Profit Before Tax | 8.3 | 7.2 | +14% |
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|
|
|
EPS (basic) | 16.88p | 14.62p | +15% |
Interim Dividend | 5.62p | 5.00p | +12.4% |
Trading
Growth in our UK soft drink sales has continued to significantly outperform the market despite the poor weather and extremely challenging market conditions. This is driven by the ongoing strength of our Vimto brand and our investment in NPD products under the Levi Roots and Weight Watchers brands, both of which have added incremental sales. These factors have helped to deliver total sales growth of 8% against last year, which is significantly ahead of the overall UK soft drinks market growth of 2.4% as measured by AC Nielsen.
In the UK, the combination of increased promotional activity and raw material cost inflation continues to exert pressure on our UK gross margins. Ongoing productivity improvements and the strength of our international business have allowed us to maintain our Group operating profit margins at 15%.
At our AGM in May 2012 we were delighted to announce that Nichols plc had been awarded the Queen's Award for International Trade and during the first half of the year our export business again proved to be a considerable strength of the Group with international sales at the half year up 14% on 2011.
This growth is primarily driven by our two key international markets, with sales to the Middle East 12% ahead of 2011 and sales to Africa 27% ahead of the prior year.
Dividend
Based on the Group's performance at the half year, its strong cash generation and the Board's ongoing confidence for the future, we are pleased to approve an interim dividend of 5.62 pence per share (2011: 5.00 pence), representing an increase of 12.4%.
This interim dividend will be paid on 31 August 2012 to shareholders registered on 3 August 2012.
Outlook
As expected, the challenging UK retail environment experienced in 2011 has continued into the first half of 2012 with the resulting low market growth prompting frequent and deep cutting promotional activity by both retailers and soft drinks brand holders.
Despite this, the Group has continued to deliver profitable growth at the same time as investing in our brands and successfully growing our market position both in the UK and internationally.
Whilst we do not anticipate any real improvement in the UK economy in the short to medium term, with our strong balance sheet, continued investment in our brands and a healthy export market, the Group is very well placed to continue its profitable growth trend for the second half of 2012 and beyond and we anticipate the full year outturn will be in line with expectations.
John Nichols
Non-Executive Chairman
26 July 2012
CONSOLIDATED INCOME STATEMENT
| |||
|
Unaudited |
Unaudited | Audited | |
Half year ended 30 Jun 2012 | Half year ended 30 Jun 2011 | Full year ended 31 Dec 2011 | |
£'000 | £'000 | £'000 | |
Revenue | 55,357 | 50,493 | 98,912 |
Operating profit | 8,280 | 7,252 | 18,149 |
Finance income | 39 | 45 | 72 |
Finance expense | (61) | (60) | (116) |
Profit before taxation | 8,258 | 7,237 | 18,105 |
Taxation | (2,043) | (1,876) | (4,779) |
Profit for the financial period | 6,215 | 5,361 | 13,326 |
Earnings per share (basic) - all activities
| 16.88p | 14.62p | 36.28p |
Earnings per share (diluted) - all activities | 16.86p | 14.59p | 36.25p |
Dividends paid per share | 10.30p | 9.10p | 14.10p |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Unaudited | Unaudited | Audited | |||
Half year ended 30 Jun 2012 | Half year ended 30 Jun 2011 | Full year ended 31 Dec 2011 | |||
£'000 | £'000 | £'000 | |||
Profit for the financial period | 6,215 | 5,361 | 13,326 | ||
Other comprehensive income:
Defined benefit plan actuarial loss | 0 | 0 | (2,926) | ||
Deferred taxation on pension obligations | 0 | 0 | 842 | ||
Other comprehensive expense for the year | 0 | 0 | (2,084) | ||
Total recognised income and expense for the period | 6,215 | 5,361 | 11,242 | ||
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited | Unaudited | Audited | |||
30 Jun 2012 | 30 Jun 2011 | 31 Dec 2011 | |||
£'000 | £'000 | £'000 | |||
ASSETS | |||||
Non-current assets | |||||
Property, plant and equipment | 1,240 | 1,524 | 1,374 | ||
Goodwill | 13,658 | 13,482 | 13,658 | ||
Deferred tax assets | 2,579 | 2,587 | 2,579 | ||
Total non-current assets | 17,477 | 17,593 | 17,611 | ||
Current assets | |||||
Inventories | 5,559 | 6,108 | 5,790 | ||
Trade and other receivables | 22,413 | 25,552 | 21,118 | ||
Cash and cash equivalents | 23,563 | 14,414 | 20,111 | ||
Total current assets | 51,535 | 46,074 | 47,019 | ||
Total assets | 69,012 | 63,667 | 64,630 | ||
LIABILITIES | |||||
Current liabilities | |||||
Trade and other payables | 21,898 | 25,168 | 20,073 | ||
Current tax liabilities | 1,944 | 1,945 | 1,752 | ||
Provisions | 84 | 172 | 139 | ||
Total current liabilities | 23,926 | 27,285 | 21,964 | ||
Non-current liabilities | |||||
Pension obligations | 6,313 | 4,135 | 6,313 | ||
Deferred tax liabilities | 51 | 93 | 51 | ||
Total non-current liabilities | 6,364 | 4,228 | 6,364 | ||
Total liabilities | 30,290 | 31,513 | 28,328 | ||
Net assets | 38,722 | 32,154 | 36,302 | ||
EQUITY | |||||
Share capital | 3,697 | 3,697 | 3,697 | ||
Additional paid in capital | 3,255 | 3,255 | 3,255 | ||
Capital redemption reserve | 1,209 | 1,209 | 1,209 | ||
Other reserves | (546) | (629) | (546) | ||
Retained earnings | 31,107 | 24,622 | 28,687 | ||
Total equity | 38,722 | 32,154 | 36,302 | ||
CONSOLIDATED STATEMENT OF CASH FLOWS
Unaudited Half year ended 30 Jun 2012 | Unaudited Half year ended 30 Jun 2011 | Audited Full year ended 31 Dec 2011 | ||||
£'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
Profit for the financial period | 6,215 | 5,361 | 13,326 | |||
Cash flows from operating activities | ||||||
Adjustments for: | ||||||
Depreciation | 221 | 200 | 467 | |||
Loss on sale of property, plant and equipment | 0 | 3 | 26 | |||
Finance income | (39) | (45) | (72) | |||
Finance expense | 61 | 60 | 0 | |||
Taxation expense recognised in the income statement | 2,043 | 1,876 | 4,779 | |||
Change in inventories | 231 | (2,011) | (1,674) | |||
Change in trade and other receivables | (1,295) | (8,533) | (4,069) | |||
Change in trade and other payables | 1,825 | 9,966 | 4,794 | |||
Change in provisions | (55) | (192) | (226) | |||
Change in pension obligations | 0 | 0 | (748) | |||
2,992 | 1,324 | 3,277 | ||||
Cash generated from operating activities | 9,207 | 6,685 | 16,603 | |||
Tax paid | (1,850) | (1,464) | (3,794) | |||
Net cash generated from operating activities | 7,357 | 5,221 | 12,809 | |||
Cash flows from investing activities | ||||||
Finance income | 39 | 45 | 72 | |||
Proceeds from sale of property, plant and equipment | 1 | 0 | 1 | |||
Acquisition of property, plant and equipment | (150) | (142) | (302) | |||
Acquisition of subsidiary, net of cash acquired | 0 | (2,300) | (2,300) | |||
Acquisition of subsidiary's net overdraft | 0 | (24) | (24) | |||
Net cash used in investing activities | (110) | (2,421) | (2,553) | |||
Cash flows from financing activities | ||||||
Disposal of own shares | 0 | 0 | 83 | |||
Dividends paid | (3,795) | (3,353) | (5,195) | |||
Net cash used in financing activities | (3,795) | (3,353) | (5,112) | |||
Net increase/(decrease) in cash and cash equivalents | 3,452 | (553) | 5,144 | |||
Cash and cash equivalents at beginning of period | 20,111 | 14,967 | 14,967 | |||
Cash and cash equivalents at end of period | 23,563 | 14,414 | 20,111 | |||
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 2011, 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 2011. 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 5.62p (2011: 5.00p) will be paid on 31 August 2012 to shareholders registered on 3 August 2012. The ex dividend date is 1 August 2012.
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 2012 of 36,826,338 (six months to 30 June 2011 of 36,678,398 and 12 months to 31 December 2011 of 36,728,932).
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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Nichols plc