Nichols plc Regulatory News (NICL)

23 Mar 2006 07:01

Nichols PLC23 March 2006 Date: Embargoed until 07.00hrs, Thursday 23 March 2006 Contacts: John Nichols, Executive Chairman Brendan Hynes, Group Finance Director Nichols plc Telephone: 01925 222222 Website: www.nicholsplc.co.uk Alistair Mackinnon-Musson Philip Dennis Hudson Sandler Telephone: 020 7796 4133 Email: nichols@hspr.com Photographs available: On request from Hudson Sandler, as above Nichols plc PRELIMINARY RESULTS Nichols plc, the soft drinks group, announces its Preliminary results for theyear to 31 December 2005. The group has two principal operations: 1) Soft Drinks (primarily involved in the sale of soft drinks, including Vimto, throughout the world and Panda & Sunkist in the UK) and 2) Beverage Systems (Cabana, soft drinks on draught) Highlights: • Sales from continuing operations up 29.4% to £51.5 million (2004: £39.8 million)• Profit before tax, exceptionals and FRS17 charges up 11.4% to £7.2 million (2004: £6.4 million)• Operating cash in-flow of £9.7 million (2004: £6.9 million)• Soft Drinks: sales up 32.6% and operating profits up 16.9%• Beverage Systems: sales up 14%• Vimto sales now at record levels• UK Vimto brand sales up 6% (in a market that fell year on year)• Strong international sales - Vimto now available in over 65 countries worldwide• EPS basic (before exceptional items) up 11.1% to 12.83 pence (2004: 11.55 pence)• Total dividend for the year up 5%• Two major acquisitions made in 2005• £12.6 million in cash received post year end from disposals Commenting John Nichols, Chairman, said: "I am delighted the re-shaping of the Group has produced substantial trading andfinancial benefits. We made excellent progress in 2005 and we are now muchstronger, more streamlined and focused as a result. We are well placed for 2006and beyond" Chairman's Statement I am delighted to report the re-shaping of the Group has produced substantialtrading and financial benefits, improved cash flows and a much strengthenedbalance sheet. I am also pleased to report that with the disposal of our hot beverage business,Balmoral, in January 2006, the transformation of the Group into a profitable,highly focused soft drinks and dispense business is now complete. Mostimportantly, it will enable us to concentrate all our future efforts andinvestment in these two sectors. Today, Nichols plc comprises two operations: Soft Drinks - the sale of the Vimtobrand throughout the world and the Panda and Sunkist brands in the UK; andBeverage Systems - namely Cabana, soft drinks on draught ('dispense'). Results In 2005 sales from continuing operations increased by 29.4% to £51.5 million(2004: £39.8 million), with profit on continuing activities before tax,exceptional items and FRS17 charges up 11.4% to £7.2 million (2004: £6.4million). Cash in-flow from operating activities increased to £9.7 million from£6.9 million in 2004. In overall terms, our Soft Drinks Operation increased its sales by 32.6% to£39.3 million (2004: £29.6 million) and increased its operating profits by 16.9%to £7.1 million (2004: £6.0 million). At our Beverage Systems Operation, whichincluded Balmoral for the whole year, we continued to experience a verycompetitive market in which we saw further consolidation taking place. Despitethese factors, Beverage Systems increased its turnover by 13.8% to £24.1 million(2004: £21.1 million), delivering an operating profit of £0.7 million (2004:£0.9 million). Earnings per share (before exceptional items) increased 11.1% to 12.83 pence(2004: 11.55 pence). Two major acquisitions were made during the year, namely Panda Soft Drinks inJanuary 2005 for £5.7 million in cash and in May 2005, Beacon Soft Drinks, aBrighton based soft drinks dispense business. As a result, the Group's netdebt increased from £0.35 million in 2004 to £6.31 million at the year end.However, this is prior to receiving the £6.5 million disposal proceeds fromBalmoral in January 2006 and also the £6.1 million in proceeds from the sale ofour freehold property in Golborne near Wigan, Greater Manchester in March 2006(see Post Balance Sheet Events below). Since 31 December 2005, we have repaidall our bank borrowings and now have cash deposits. Given the significant progress made during 2005, the Board is pleased torecommend an increase of 5% in the final dividend to 6.10 pence per share (2004:5.80 pence), which together with the interim dividend brings the total dividendfor the year to 9.25 pence (2004: 8.80 pence), an increase of 5% on last year.This will be paid on 16 May 2006 to shareholders registered on 18 April 2006,subject to AGM approval. The ex-dividend date is 12 April 2006. Our Business As a result of making substantial marketing investments in the core Vimto brandin the UK during 2005, the domestic sales value of the Vimto brand grew by 6% ina market that was down year on year. Strong overseas sales growth was alsoachieved in Senegal, Cameroon and our traditional markets in the Middle East,along with new markets in Pakistan and Guinea. Today, Vimto is available inover 65 countries worldwide. Panda Soft Drinks was an excellent addition to our branded portfolio of softdrinks and added £8.3 million turnover to the Soft Drinks Operation during theeleven months of our ownership. The Panda brand has just been re-launched as anatural flavoured, sugar free soft drink. In our Beverage Systems Operation, Beacon Soft Drinks has now been fullyintegrated and is performing in line with our expectations, while at Cabana wecontinue to adapt the business, moving it more towards a franchise model. Our People In the face of much change, our people have continued to provide the real addedvalue behind our operational success and contributed significantly to oursustained achievements. I would therefore like to take this opportunity tothank all our employees for their support, hard work and commitment during 2005,ensuring the Group is well placed to meet our future growth expectations. In September 2005, Simon Nichols resigned from the Board after 22 years with theGroup and he left the business at the end of 2005. I would like to thank Simonfor his hard work and dedication over the years and we all wish him well in hisfuture plans. Simon's responsibilities have been shared out between the Boardand management teams. I am also pleased to report that as part of our commitment to the community,during 2005 we provided a further three Vimto Variety Club Sunshine Coaches forcharitable use. Since we began supporting the Variety Club of Great Britain in1998, we have now raised sufficient funds to provide a total of 30 SunshineCoaches for disadvantaged children. Post Balance Sheet Events As mentioned above, on 12 January 2006 we completed the sale of Balmoral TradingLimited to the Autobar Group for £6.5 million in cash. Balmoral contributed£0.5 million of operating profit in 2005 (2004: £0.7) but, as a small player inthe market, it was finding it difficult to compete. We therefore believe thefuture prospects for Balmoral are much better as part of a larger business. I am also pleased to report that on 3 March 2006 we completed the sale of oursurplus freehold property at Golborne for £6.1 million in cash, slightly aboveits book value. Outlook In summary, we are pleased with the further progress made during 2005. As astronger, more streamlined and focused Group I believe we are now well placed tocontinue to develop and grow our business, both organically and throughacquisition. John NicholsChairmanNichols plc 23 March 2006 Consolidated profit and loss accountyear ended 31 December 2005 Restated Restated Before Exceptional FRS 17 P&L Total Before After exceptional items charges exceptional exceptional items and items and items and FRS17 P&L FRS17 P&L FRS17 P&L charges charges charges 2005 2005 2005 2005 2004 2004 £'000 £'000 £'000 £'000 £'000 £'000 Turnover- continuing operations 51,521 51,521 39,803 39,803- discontinued operations 11,815 11,815 48,270 48,270 63,336 63,336 88,073 88,073 Cost of sales 30,235 30,235 51,971 51,971 Gross profit 33,101 33,101 36,102 36,102 Net operating expenses 25,345 1,002 51 26,398 28,949 31,276 Operating profit- continuing operations 7,219 (1,002) (51) 6,166 6,191 3,864- discontinued operations 537 537 962 962 7,756 (1,002) (51) 6,703 7,153 4,826 Disposal of subsidiary undertakings - 11,062Net interest payable 575 - 132 707 709 887 Profit/ (loss) on ordinary activitiesbefore taxation 7,181 (1,002) (183) 5,996 6,444 (7,123) Tax on profit/(loss) on ordinary 2,352 (300) (53) 1,999 1,951 1,579activities Profit/ (loss) for the financial year 4,829 (702) (130) 3,997 4,493 (8,702) Earnings/(loss) per share (basic) 10.91p (23.84p) Earnings/(loss) per share (diluted) 10.88p (23.84p) Dividends per share 9.25p 8.80p Balance sheetsat 31 December 2005 Group Parent 2005 2004 2005 2004 £'000 £'000 £'000 £'000 Restated RestatedFixed assetsIntangible assets 9,504 1,587 5,355 -Tangible assets 13,563 13,231 6,653 6,771Investments: shares in group undertakings - - 7,460 5,272 23,067 14,818 19,468 12,043 Current assetsStocks 3,972 3,987 1,157 725Debtors 14,592 13,203 34,327 24,563Current asset investments - 2,750 - 2,750Cash at bank and in hand - 2,988 - 2,905 18,564 22,928 35,484 30,943CreditorsAmounts falling due within one year 17,532 11,981 35,631 21,365 Net current assets/(liabilities) 1,032 10,947 (147) 9,578 Total assets less current liabilities 24,099 25,765 19,321 21,621 CreditorsAmounts falling due after one year 750 2,592 750 2,592 23,349 23,173 18,571 19,029 Provisions for liabilities 1,452 1,393 680 717 Net assets excluding pension liabilities 21,897 21,780 17,891 18,312 Pension Liability 4,906 3,723 4,906 3,723 Net assets including pension liabilities 16,991 18,057 12,985 14,589 Share capital and reservesCalled up share capital 3,697 3,697 3,697 3,697Share premium account 3,255 3,255 3,255 3,255Capital redemption reserve 1,209 1,209 1,209 1,209Merger reserve - - 775 775Other reserves (698) (698) (698) (698)Profit and loss account 9,528 10,594 4,747 6,351 Equity shareholders' funds 16,991 18,057 12,985 14,589 Consolidated cash flow statementyear ended 31 December 2005 2005 2004 £'000 £'000 £'000 £'000 Cash inflow from operating activities 9,704 6,904 Returns on investments and servicing of financeInterest received 51 25Interest paid (626) (734) Net cash outflow from returns on investments andservicing of finance (575) (709) Taxation (2,004) (1,279) Capital expenditure and financial investmentPurchase of tangible fixed assets (1,653) (2,070)Purchase of intangible assets (44) (62)Proceeds of sales of tangible fixed assets 141 2,004 Net cash outflow from capital expenditureand financial investment (1,556) (128) Acquisitions and disposalsDisposal of subsidiary undertakings - 11,482 Purchase of subsidiary undertakings (7,608) - Net overdrafts acquired with subsidiary (607) - Net cash (outflow)/inflow from acquisitions and disposals (8,215) 11,482 Equity dividends paid (3,309) (3,253) Cash (outflow)/inflow before use of liquid resources andfinancing (5,955) 13,017 Management of liquid resourcesIncrease/(decrease) in short term deposits with bank 2,750 (2,750) FinancingIncrease/(decrease) in borrowings 217 (8,806)Proceeds of sale of own shares - 161 Net cash inflow/(outflow) from financing 217 (8,645) (Decrease)/increase in cash in the year (2,988) 1,622 Statement of Total Recognised Gains & LossesYear ended 31 December 2005 2005 Restated 2004 £'000 £'000 Profit/(loss) for the period 3,997 (8,072) Actual return less expected return on pension scheme assets 1,004 188Experience gains and losses arising on the scheme liabilities (1,194) (215)Changes in the assumptions underlying the present value of the scheme (2,316) (514)liabilitiesMovement on deferred taxation relating to pension liability 752 162 Total recognised gains and losses for the period 2,243 (9,081) Prior year adjustments (1,579) 0 Total recognised gains and losses since last financial statements 664 (9,081) Nichols plc NOTES TO THE PRELIMINARY FINANCIAL INFORMATION Basis of Preparation The financial information set out above does not constitute the company'sstatutory accounts for the years ended 31 December 2005 or 2004, but is derivedfrom those accounts. Statutory accounts for 2004 have been delivered to theRegistrar of Companies and those for 2005 will be delivered following thecompany's Annual General meeting. The Auditors have reported on these accounts;their reports were unqualified and did not contain statements under s.237 (2) or(3) of the Companies Act 1985. Comparative figures have been restated to reflect the adoption of FRS 17 "Retirement Benefits" by including the pension scheme liability in the financialstatements and FRS 21 "Events After the Balance Sheet Date" by removing the 2004proposed dividend from the profit and loss account and the balance sheet. Earnings per Share The calculation of basic earnings per share is based on earnings attributable toordinary shareholders divided by the weighted average number of shares in issueduring the year. Shares held in the Employee Share Ownership Trust and EmployeeBenefit Trust are treated as cancelled for the purposes of this calculation. The calculation of diluted earnings per share is based on the basic earnings pershare adjusted to allow for the assumed conversion of all dilutive options. Earnings per share (basic) before exceptional items is 12.83 pence (2004: 11.55pence) Dividends The proposed final dividend of 6.10 pence per share (2004: 5.80 pence), ifapproved, will be paid on 16th May 2006 to shareholders registered on 18th April2006. In addition, an interim dividend of 3.15 pence was paid on 14 October2005. Annual Report The annual report will be mailed to shareholders on or around 7 April 2006.Copies will be available after that date from: The Secretary, Nichols plc,Laurel House, Woodlands Park, Ashton Road, Newton-le-Willows, WA12 0HH. Annual General Meeting The Annual General Meeting will be held at the registered office, Laurel House,Woodlands Park, Ashton Road, Newton-le-Willows, WA12 0HH on Tuesday 16 May 2006at 11.00 a.m. Copies of the announcement can be found on the Investors Relations section ofthe company's website: www.nicholsplc.co.uk - ENDS - This information is provided by RNS The company news service from the London Stock Exchange