(Sharecast News) - Shares in Vinto and Slush Puppie maker Nichols rose strongly on Wednesday after the drinks group reported increased profits for 2023, helped by the exit from unprofitable businesses within the Out of Home division, and pointed to further growth this year.
The company reported revenues of £170.7m for the 12 months to 31 December, up 3.5% on 2022, with 6.1% growth in the Packaged drinks business offsetting a 3.4% decline in the smaller Out of Home division, which sells post-mix soft drinks to the leisure, catering and hospitality sectors.
Falling sales were as expected within the Out of Home unit after the exit from unprofitable lines as Nichols continues to restructure the division, including measures to simplify the business and a rationalise of operating costs and central overheads, which has allowed it to increase profitability in this area.
"The benefits of the change are being secured earlier than we initially anticipated and we expect further progress in 2024, particularly given the negative effect on reported performance of product reformulation costs during 2023," the company said.
In the Packaged segment, UK revenues increased by 1.3% but international revenues surged 16.8% with double-digit growth reported across all geographies.
Adjusted pre-tax profit rose 8.7% to £27.2m, as the adjusted pre-tax profit margin rose 0.8 percentage points to 15.9%.
Meanwhile, free cash flow surged 43.1% to £20.9m, while the company bumped up its final dividend by 2% to 15.6p, taking the total payout for the year to 28.2p, up 1.8% on the year before.
Looking ahead, chief executive Andrew Milne said he was "confident about our prospects for 2024", with trading having started well and "further strategic progress" across the business expected this year.
The stock was up nearly 5% at 1,055p by 1027 GMT.
Nichols plc (NICL)