Last checked at 25 Jul 2013 07:00
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Nichols plc
INTERIM RESULTS
Nichols plc, the soft drinks group, announces its interim results for the period ended 30 June 2013 (the "period").
Nichols plc is a highly focused soft drinks business. Its brand portfolio includes Vimto, which is sold in more than 65 countries and Levi Roots, Weight Watchers, Sunkist, Panda and Extreme Sports and Energy which are sold in the UK. The Group has a leading market position in both the "Still" and "Carbonate" drinks categories and also in the soft drinks on dispense market, where its brands include Cabana and Ben Shaws.
Highlights:
·; Profit before tax up 9% to £9.0m
·; Basic earnings per share up 11% to 18.76p
·; Strong net cash position of £31.2m (H1 2012: £23.6m)
·; Exclusive licence to add Extreme Sports and Energy to brand portfolio
·; Interim dividend up 13% to 6.32p
Commenting John Nichols, Non-Executive Chairman, said:
"I am very pleased to report another strong performance in the first half of the year, despite a subdued UK soft drinks market. The Group has maintained its growth momentum delivering increases in margin, profit, earnings per share and net cash generation.
During the period we were delighted to sign an exclusive agreement to add Extreme Sports and Energy to our brand portfolio, marking the Group's entry to the high-growth energy market.
We will continue with our strategy of introducing further new products and entering new international markets whilst importantly continuing to invest in our existing core brands."
Chairman's Statement
It is very pleasing to announce another strong performance in the first half of 2013. The Group has maintained its growth momentum delivering increases in margin, profit, earnings per share and net cash generation.
As a result of our ongoing strategy of focusing on profit rather than volume growth, particularly in the highly promotional UK market, we have again delivered increased revenue per case, higher margins and good profit growth in our UK business although Group sales were flat year on year.
Group Profit before Tax (PBT) is £9.0m, +9% ahead of 2012 at the half year. In addition, we have also improved our strong net cash position, with a balance as at 30 June 2013 of £31.2m (June 2012: £23.6m), an increase of £6.5m from the 2012 year end.
Results
| Half year ended 30 June 2013 | Half year ended 30 June 2012 | % movement |
| £m | £m |
|
Group Revenue | 55.2 | 55.4 | 0% |
Operating Profit | 8.9 | 8.3 | +7% |
Operating Profit R.O.S. | 16% | 15% |
|
Profit Before Tax | 9.0 | 8.3 | +9% |
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|
|
EPS (basic) | 18.76p | 16.88p | 11% |
Interim Dividend | 6.32p | 5.62p | 13% |
Trading
In recent years our UK gross margins have been under pressure from a combination of increased promotional activity and raw material cost inflation. In 2013 we planned to address this by reducing our promotional participation in the heavily discounted Carbonate category and growing our market share in the Still category. At the half year this plan has been successful, delivering increased gross margin and cash profit compared to the prior year.
Our international sales are 2% ahead of the prior year driven by further growth in our African markets, offset by lower sales of concentrate to the Middle East; however our latest information on in-country sales of finished goods for the Middle East show a small increase at the half year.
New product launch
In April we signed an exclusive licence to add Extreme Sports and Energy to our brand portfolio. The brand, which is licensed from the Extreme Sports Company, targets 18 to 34 year old sports enthusiasts. The initial launch into the impulse sector in June was via our cash & carry and wholesale customers.
Dividend
The Board has declared a dividend of 6.32 pence per share (2012: 5.62 pence), representing an increase of 13% reflecting the robust results, strong balance sheet and the Board's ongoing confidence for the future.
This interim dividend will be paid on 30 August 2013 to shareholders registered on 2 August 2013.
Outlook
UK consumer spending remains cautious and for the remainder of 2013 we expect the soft drinks market to be characterised by low volume growth and significant promotional activity. Against this backdrop, we are pleased with the Group's performance in the first half of 2013, in particular the success of our strategy to improve margin and increase profitability.
In the second half of 2013 we will be finalising our revenue growth plans for 2014 and beyond including the introduction of further new products, entering new international markets and importantly continuing to invest in our existing core brands.
We expect Group performance for the remainder of 2013 will be similar to the first half of the year and therefore anticipate the full year results will be in line with current expectations.
John Nichols
Non-Executive Chairman
25 July 2013
CONSOLIDATED INCOME STATEMENT
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|
Unaudited |
Unaudited | Audited | |
Half year ended 30 Jun 2013 | Half year ended 30 Jun 2012 | Full year ended 31 Dec 2012 | |
£'000 | £'000 | £'000 | |
Revenue | 55,154 | 55,357 | 107,788 |
Operating profit | 8,860 | 8,280 | 20,517 |
Finance income | 205 | 39 | 324 |
Finance expense | (61) | (61) | (331) |
Profit before taxation | 9,004 | 8,258 | 20,510 |
Taxation | (2,094) | (2,043) | (5,252) |
Profit for the financial period | 6,910 | 6,215 | 15,258 |
Earnings per share (basic) - all activities
| 18.76p | 16.88p | 41.43p |
Earnings per share (diluted) - all activities | 18.75p | 16.86p | 41.38p |
Dividends paid per share | 11.70p | 10.30p | 15.92p |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Unaudited | Unaudited | Audited | |||
Half year ended 30 Jun 2013 | Half year ended 30 Jun 2012 | Full year ended 31 Dec 2012 | |||
£'000 | £'000 | £'000 | |||
Profit for the financial period | 6,910 | 6,215 | 15,258 | ||
Other comprehensive expense:
Defined benefit plan actuarial loss | 0 | 0 | (773) | ||
Deferred taxation on pension obligations | 0 | 0 | 78 | ||
Other comprehensive expense for the period | 0 | 0 | (695) | ||
Total comprehensive income for the period | 6,910 | 6,215 | 14,563 | ||
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited | Unaudited | Audited | |||
30 Jun 2013 | 30 Jun 2012 | 31 Dec 2012 | |||
£'000 | £'000 | £'000 | |||
ASSETS | |||||
Non-current assets | |||||
Property, plant and equipment | 1,379 | 1,240 | 1,275 | ||
Goodwill | 15,973 | 13,658 | 15,973 | ||
Deferred tax assets | 2,148 | 2,579 | 2,148 | ||
Total non-current assets | 19,500 | 17,477 | 19,396 | ||
Current assets | |||||
Inventories | 5,913 | 5,559 | 5,331 | ||
Trade and other receivables | 24,374 | 22,413 | 23,741 | ||
Cash and cash equivalents | 31,208 | 23,563 | 24,745 | ||
Total current assets | 61,495 | 51,535 | 53,817 | ||
Total assets | 80,995 | 69,012 | 73,213 | ||
LIABILITIES | |||||
Current liabilities | |||||
Trade and other payables | 24,531 | 21,898 | 19,377 | ||
Current tax liabilities | 2,232 | 1,944 | 2,191 | ||
Provisions | 34 | 84 | 47 | ||
Total current liabilities | 26,797 | 23,926 | 21,615 | ||
Non-current liabilities | |||||
Pension obligations | 6,556 | 6,313 | 6,556 | ||
Deferred tax liabilities | 47 | 51 | 47 | ||
Total non-current liabilities | 6,603 | 6,364 | 6,603 | ||
Total liabilities | 33,400 | 30,290 | 28,218 | ||
Net assets | 47,595 | 38,722 | 44,995 | ||
EQUITY | |||||
Share capital | 3,697 | 3,697 | 3,697 | ||
Share premium reserve | 3,255 | 3,255 | 3,255 | ||
Capital redemption reserve | 1,209 | 1,209 | 1,209 | ||
Other reserves | (474) | (546) | (474) | ||
Retained earnings | 39,908 | 31,107 | 37,308 | ||
Total equity | 47,595 | 38,722 | 44,995 | ||
CONSOLIDATED STATEMENT OF CASH FLOWS
Unaudited Half year ended 30 Jun 2013 | Unaudited Half year ended 30 Jun 2012 | Audited Full year ended 31 Dec 2012 | ||||
£'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
Profit for the financial period | 6,910 | 6,215 | 15,258 | |||
Cash flows from operating activities | ||||||
Adjustments for: | ||||||
Depreciation | 253 | 221 | 460 | |||
Loss on sale of property, plant and equipment | 4 | 0 | 2 | |||
Finance income | (205) | (39) | (324) | |||
Finance expense | 61 | 61 | 0 | |||
Taxation expense recognised in the income statement | 2,094 | 2,043 | 5,252 | |||
Change in inventories | (582) | 231 | 611 | |||
Change in trade and other receivables | (633) | (1,295) | (2,297) | |||
Change in trade and other payables | 5,093 | 1,825 | (1,071) | |||
Change in provisions | (13) | (55) | (92) | |||
Change in pension obligations | 0 | 0 | (530) | |||
6,072 | 2,992 | 2,011 | ||||
Cash generated from operating activities | 12,982 | 9,207 | 17,269 | |||
Tax paid | (2,052) | (1,850) | (4,545) | |||
Net cash generated from operating activities | 10,930 | 7,357 | 12,724 | |||
Cash flows from investing activities | ||||||
Finance income | 205 | 39 | 324 | |||
Proceeds from sale of property, plant and equipment | 10 | 1 | 7 | |||
Acquisition of property, plant and equipment | (371) | (150) | (297) | |||
Acquisition of subsidiary, net of cash acquired | 0 | 0 | (2,254) | |||
Net cash used in investing activities | (156) | (110) | (2,220) | |||
Cash flows from financing activities | ||||||
Disposal of own shares | 0 | 0 | (4) | |||
Dividends paid | (4,311) | (3,795) | (5,866) | |||
Net cash used in financing activities | (4,311) | (3,795) | (5,870) | |||
Net increase in cash and cash equivalents | 6,463 | 3,452 | 4,634 | |||
Cash and cash equivalents at beginning of period | 24,745 | 20,111 | 20,111 | |||
Cash and cash equivalents at end of period | 31,208 | 23,563 | 24,745 | |||
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 2012, 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 2012. 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 6.32p (2012: 5.62p) will be paid on 30 August 2013 to shareholders registered on 2 August 2013. The ex dividend date is 31 July 2013.
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 2013 of 36,826,580 (six months to 30 June 2012 of 36,826,338 and 12 months to 31 December 2012 of 36,826,460).
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.