Nichols plc Regulatory News (NICL)

23 Mar 2005 07:00

Nichols PLC23 March 2005 Date: Embargoed until 07.00hrs, Wednesday 23 March 2005 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.co.uk 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 2004. The group has two principal operations: Soft Drinks (primarily involved in the sale of soft drinks, including Vimto,throughout the world and Sunkist in the UK) and Beverage Systems (Cabana, soft drinks on draught and Balmoral, supplier of hotbeverage systems). Highlights: • Operating profits on continuing activities up 20.3%• Soft Drinks' sales up 7.6% and operating profits up 13.2%• Beverage Systems' sales up 1.4% and operating profits up 125%• Successful disposal of Nichols Foods for £11.6m - strategic review now largely complete• Group debt significantly reduced to £353,000 from £13.5m• Post year-end acquisition of the Panda soft drink brand strengthens portfolio• Panda integration into the Soft Drinks Operation is well advanced - pleasing results so far Commenting John Nichols, Chairman, said: "2004 was one of the most eventful years in the group's recent history,culminating in the disposal of Nichols Foods and Stockpack. As a result,Nichols plc today comprises a highly focused group with a balance sheet that issubstantially stronger than a year ago. We enter 2005 financially robust". "Reflecting on the year as a whole, we can be pleased with the improvement inoperating profits on continuing operations. We will continue to develop andadapt our business in 2005 and the acquisition announced at the end of Januaryof the Panda soft drink brand is testimony to this. The integration of Pandainto our Soft Drinks Operation is now well advanced and we are very pleased withthe results so far." "Looking forward, although trading conditions are likely to remain competitive,we expect to make further progress this year." Chairman's Statement 2004 was one of the most eventful years in the group's recent history,culminating in the disposal of Nichols Foods and Stockpack ("Nichols Foods") for£11.6 million in cash, as announced in November 2004. As a result, Nichols plctoday comprises a highly focused group with two operations, namely Soft Drinksand Beverage Systems. 2004 also saw the group transferring its listing from the Official List of theLondon Stock Exchange to AIM, which has already proved to be more appropriateand cost effective for a group of our size. Results The strategic review that began in 2003 has delivered a number of benefits tothe group, including significantly improved quality of earnings and return oncapital employed. Borrowings have also been substantially reduced due to strongoperational cash flows throughout the year and the disposal of Nichols Foods.As a result, our balance sheet is materially stronger than a year ago and wetherefore enter 2005 with a more focused business that is financially robust. Sales at our Soft Drinks Operation in the year to 31 December 2004 increased by7.6% to £29.6 million (2003: £27.5 million) and operating profits were up 13.2%to £6.0 million (2003: £5.3 million). Combining the turnovers of Balmoral andCabana our Beverage Systems Operation produced sales up 1.4% to £21.1 million(2003: £20.8 million) and operating profits up 125% to £0.9 million (2003: £0.4million). At the group level, our consolidated results were affected by the disposal ofNichols Foods. Pre-tax profits (before exceptional items) and excluding theresults of Nichols Foods from the end of October 2004 were £6.4 million (2003:£6.6 million) on group turnover of £88.1 million (2003: £97.1 million), againexcluding two months of Nichols Foods. For comparative purposes, in the year to31 December 2003 Nichols Foods contributed a profit before tax of £0.23 millionin the first 10 months of 2004 (2003: £1.59 million) Net debt reduced to £353,000 from £13.5 million in 2003, inclusive of theproceeds of the sale of Nichols Foods (£11.6 million) and a further freeholdproperty to the value of £1.7 million. Additionally, surplus property atGolborne is currently being marketed at £6 to £7 million. The disposal of Nichols Foods gave rise to an exceptional charge of £10.6million, including £6.1 million of goodwill previously written off to reserves.Further cash costs of £1.8 million were incurred on restructuring the group,post the disposal and we have also taken an impairment charge of £0.5 million onour remaining freehold property, which the Board believes is prudent in thecurrent property market. In aggregate an exceptional charge of £12.9 millionhas therefore been taken against profits in 2004 (2003: £2.8 million). Earnings per share (before exceptional items) and excluding Nichols Foods fortwo months were 12.31 pence (2003: 12.47 pence). The directors recommend a final dividend of 5.80 pence per share (2003: 5.80pence) maintaining the total dividend for the year at 8.80 pence. This will bepaid on the 13 May 2005 to shareholders registered on 15 April 2005. Theex-dividend date is 13 April 2005. Our Markets In a market where conditions remain fiercely competitive, sales within our SoftDrinks Operation increased steadily last year, despite the poor summer weather.This performance was built on the Vimto brand's growing success in theready-to-drink and dilutable sectors. During 2004, Vimto Cordial recorded itshighest ever level of market share in the 'red-black' sector in which it trades. Increased franchising and licensing agreements have also taken the Vimto brandto new consumers in a variety of new product categories, including Vimto ChewySweets and Bon Bons. Internationally, the Vimto brand continues to demonstrate strong growth in itsexisting Middle East markets and is increasing distribution and sales in newmarkets across Africa, Asia and further Middle Eastern markets not previouslysupplied. In the Beverage Systems Operation, Cabana, our UK soft drinks on draughtbusiness also experienced tough market conditions as the poor summer weatheradversely affected the business, resulting in a disappointing sales performance. I am pleased to report, however, that in 2004 Balmoral, our hot beveragedispense business, reversed its declining performance of 2003. Balmoral grew itsbusiness through a combination of increased sales to existing customers andplacements of machines in new outlets. Our People The support, enthusiasm and commitment of all Nichols employees, especiallythroughout the period of change, was much appreciated by the Board and I wouldlike to thank them on your behalf for their continuing dedication. As shareholders may be aware, the disposal of Nichols Foods was made to a teamled by Gary Unsworth, the former Group Managing Director of Nichols plc and anoriginal founder of the Nichols Foods business. I would like to take thisopportunity on behalf of everyone connected with our group to thank Gary for hisefforts and commitment whilst at Nichols and to wish him, and all our formercolleagues who are now part of Gary's business, every success in the future. Outlook Reflecting on the year as a whole, we can be pleased with the improvement inoperating profits on continuing operations. We will continue to develop andgrow our business in 2005 and the acquisition announced at the end of January ofthe Panda soft drink brand is testimony to this. The integration of Panda intoour Soft Drinks Operation is now well advanced and we are very pleased with theresults so far. We are anticipating Panda sales of around £10 million in 2005,but with limited profit impact in its first year, as there are a number of costsassociated with moving the brand into our distribution infrastructure Looking forward, although trading conditions are likely to remain competitive,we expect to make further progress this year. John NicholsChairman, Nichols plc 23 March 2005 Consolidated profit and loss accountyear ended 31 December 2004 Before Exceptional Total Before After exceptional items exceptional exceptional items items items 2004 2004 2004 2003 2003 £'000 £'000 £'000 £'000 £'000 Turnover- continuing activities 50,741 - 50,741 48,296 48,296- discontinued operations 37,332 - 37,332 48,814 48,814 88,073 - 88,073 97,110 97,110 Cost of sales 51,971 - 51,971 60,511 60,511 Gross profit 36,102 - 36,102 36,599 36,599 Net operating expenses 28,949 2,291 31,240 29,257 33,251 Operating profit- continuing activities 6,920 (2,291) 4,629 5,751 4,251- discontinued operations 233 - 233 1,591 (903) 7,153 (2,291) 4,862 7,342 3,348 Disposal of subsidiary undertakings - 11,062 11,062 - -Net interest payable 709 - 709 790 790 (Loss)/Profit on ordinary activitiesbefore taxation 6,444 (13,353) (6,909) 6,552 2,558 Tax on profit/(loss) on ordinary 1,951 (436) 1,515 2,018 820activities (Loss)/Profit for the financial year 4,493 (12,917) (8,424) 4,534 1,738 Equity dividends 3,253 - 3,253 3,253 3,253 Retained loss for the year 1,240 (12,917) (11,677) 1,281 (1,515) Loss/earnings per share (basic) (23.08p) 4.78p Loss/earnings per share (diluted) (23.08p) 4.77p Earnings/loss per share (basic) before 12.31p 12.47pexceptional itemsEarnings/loss per share (diluted) before 12.28p 12.44pexceptional itemsDividends per share 8.80p 8.80p There were no recognised gains or losses in 2004 or 2003 other than the (loss)/profit for the year. Balance sheetsat 31 December 2004 Group Parent 2004 2003 2004 2003 £'000 £'000 £'000 £'000 Restated RestatedFixed assetsIntangible assets 1,587 1,623 - -Tangible assets 13,231 27,467 6,771 13,070Investments: shares in group undertakings - - 5,272 11,453 14,818 29,090 12,043 24,523 Current assetsStocks 3,987 7,667 725 510Debtors 13,203 21,088 24,563 18,422Current asset investments 2,750 - 2,750 -Cash at bank and in hand 2,988 1,366 2,905 - 22,928 30,121 30,943 18,932CreditorsAmounts falling due within one year 14,125 26,051 23,509 18,110 Net current assets 8,803 4,070 7,434 822 Total assets less current liabilities 23,621 33,160 19,477 25,345 CreditorsAmounts falling due after one year 2,592 6,173 2,592 6,173 21,029 26,987 16,885 19,172 Provisions for liabilities and charges 1,393 1,979 717 1,184 19,636 25,008 16,168 17,988 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) (859) (698) (859)Profit and loss account 12,173 17,706 7,930 9,911 Equity shareholders' funds 19,636 25,008 16,168 17,988 Consolidated cash flow statementyear ended 31 December 2004 2004 2003 £'000 £'000 £'000 £'000 Cash inflow from operating activities 6,904 7,953 Returns on investments and servicing of financeInterest received 25 16Interest paid (734) (806) Net cash outflow from returns on investments andservicing of finance (709) (790) Taxation (1,279) (1,540) Capital expenditure and financial investmentPurchase of tangible fixed assets (2,070) (2,487)Purchase of intangible assets (62) -Proceeds of sales of tangible fixed assets 2,004 1,456 Net cash outflow from capital expenditureand financial investment (128) (1,031) Acquisitions and disposalsDisposal of subsidiary undertakings 11,482 - Net cash inflow from acquisitions and disposals 11,482 - Equity dividends paid (3,253) (3,253) Cash inflow before use of liquid resources and financing 13,017 1,339 Management of liquid resourcesIncrease in short term deposits with bank (2,750) - Financing(Decrease) in borrowings (8,806) (1,784)Proceeds of sale of own shares 161 68 Net cash outflow from financing (8,645) (1,716) Increase/(decrease) in cash in the year 1,622 (377) 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 2004 or 2003, but is derivedfrom those accounts. Statutory accounts for 2003 have been delivered to theRegistrar of Companies and those for 2004 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 "UTIF 38 -Accounting for ESOP trusts" by deducting the investments in own shares againstshareholders' funds 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. Dividends The proposed final dividend of 5.80 pence per share (2003 : 5.80 pence), ifapproved, will be paid on 13 May 2005 to shareholders registered on 15 April2005. In addition, an interim dividend of 3.00 pence was paid on 25 October2004. Annual Report The annual report will be mailed to shareholders on or around 11 April 2005.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 Wednesday 11 May2005 at 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