Nichols plc Regulatory News (NICL)

10 Aug 2005 07:01

Nichols PLC10 August 2005 Date: Embargoed until 07.00hrs, Wednesday 10 August 2005 Contacts: John Nichols, Executive Chairman Brendan Hynes, Group Finance Director Nichols plc Telephone: 01925 222 222 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 INTERIM RESULTS Nichols plc, the soft drinks group, announces its Interim results for the sixmonths to 30 June 2005. The group has two principal operations: Soft Drinks (primarily involved in the sale of soft drinks, including Vimto,throughout the world and Panda & Sunkist in the UK) and Beverage Systems (Cabana, soft drinks on draught and Balmoral, supplier of hotbeverage systems) Highlights: • Profit before tax up 12% • Turnover up 24% (from continuing operations) • Earnings per share up 17% • Dividend per share up 5% • Core Vimto brand continues to grow market share • International markets for Vimto continue to perform well • Integration of the recently acquired Panda and Beacon businesses are trading in line with expectations Commenting John Nichols, Chairman, said: "I am pleased to report we have made very good progress in the first half, inwhat continues to be a challenging market. This is the third consecutive yearof improved Interim profits following the Strategic Review in 2002 and the groupis now a much stronger and focused business. We expect the market to remainextremely challenging - but expect our full year results to reflect the progressmade so far". Chairman's Statement As anticipated and despite the market remaining difficult throughout the firsthalf year, particularly in carbonated soft drinks, I am pleased to report wehave continued to make very good progress, with pre-tax profits 12% ahead oflast year at £2.25 million (2004: £2.01 million) on turnover on continuingoperations (including acquisitions) up 24.1% at £30.54 million (2004: £24.60million). The main features of the first half were our acquisition in January of the Pandasoft drinks brand and in May, Brighton based Beacon Soft Drinks Limited, a softdrinks on draught business. The integration of Panda into our Soft Drinks Operation is largely complete andprogressing well. Beacon is also trading in line with our expectations and whenfully combined with our existing soft drinks dispense operation, Cabana, willstrengthen our strong position in the UK's draught soft drinks market. Soft Drinks Operation I am also pleased to report that our core Vimto brand has continued to grow itsshare of what remains a highly competitive market, particularly as we haveachieved this with a relatively low level of promotional activity, compared tothe market as a whole. This has also helped us maintain our margins in thisdivision. Elsewhere, our international business has performed well in the first half yearwith our long-term markets in the Middle East and Africa both showing increasedsales on last year. We continue to work on developing new export markets,although these will take some considerable time to produce meaningful returns. Beverage Systems Operation The combination of tough market conditions and relatively poor early summerweather adversely impacted our Cabana operation, with a small decline in sales(excluding Beacon) evident in the first half year. This unfavourable effect was,however, largely offset by an improved performance at Balmoral, our hot drinksdispense business. The better weather in June boosted the markets in which Cabana operates and theacquisition of Beacon Soft Drinks will help to secure its place as a majorplayer in this sector of the market. Results Turnover on continuing operations in the six months to 30 June 2005 was up 24.1%to £30.54 million (2004: £24.60 million), including turnover relating to theacquisitions of Panda from January 2005 and Beacon from May 2005. Profit beforetax increased by 12% to £2.25 million (2004: £2.01 million). Cash flow from operating activities improved to £3.51 million (2004: £2.20million) with net borrowings increasing to £9.02 million from £0.35 million atthe year end, principally due to the two acquisitions in the first half, for acombined consideration of £7.61 million. Earnings per share increased 17.2% to4.30 pence (2004: 3.67 pence). I am delighted to report this is the third consecutive year of improved Interimprofits following the Strategic Review that commenced in 2002. Given theconsistent progress we have demonstrated, the Board has approved a 5% increasein the Interim dividend to 3.15pence per share (2004: 3.0 pence). The dividend will be paid on the 14 October 2005 to shareholders registered onthe 16 September 2005. The ex-dividend date will be 14 September 2005. Outlook The group is now a much stronger and more focused business with its core brands,particularly Vimto, continuing to perform well in extremely competitive marketconditions. We expect the market to remain extremely challenging for the rest of thefinancial year, particularly in the carbonated soft drinks sector, however, weanticipate that our full year results will reflect the progress made in thefirst half year. John NicholsChairman 10 August 2005 CONSOLIDATED PROFIT AND LOSS ACCOUNT Unaudited Audited Half year Half year Before Exceptional Full year ended ended exceptional items ended 30 June 30 June 2004 items 31 Dec 2004 2005 31 Dec 2004 31 Dec 2004 (Restated) (Restated) £'000 £'000 £'000 £'000 £'000Turnover Continuing operations 30,536 24,597 50,741 0 50,741 Discontinued operations 0 22,265 37,332 0 37,332 30,536 46,862 88,073 0 88,073Operating profit / (loss) Continuing operations 2,531 2,246 7,311 (2,291) 5,020 Discontinued operations 0 134 233 0 233Loss on disposal of subsidiary undertaking 0 0 0 11,062 11,062Net interest payable 280 370 887 0 887 Profit/(loss) before taxation 2,251 2,010 6,657 (13,353) (6,696)Taxation 675 663 2,015 (436) 1,579 Profit/(loss) after taxation 1,576 1,347 4,642 (12,917) (8,275)Equity dividends 1,166 1,109 3,253 0 3,253 Retained profit / (loss) 410 238 1,389 (12,917) (11,528) Earnings / (loss) per share 4.30p 3.67p (22.68p)(basic)Earnings / (loss) per share 4.28p 3.65p (22.68p)(diluted) Earnings per share (basic) 4.30p 3.67p 12.72pbefore exceptional itemsEarnings per share (diluted) 4.28p 3.65p 12.69pbefore exceptional items Dividends per share 3.15p 3.00p 8.80p CONSOLIDATED BALANCE SHEET Unaudited Unaudited Audited 30 June 2005 30 June 2004 31 Dec 2004 (Restated) (Restated) £'000 £'000 £'000Fixed assetsIntangible assets 9,718 1,574 1,587Tangible assets 13,564 24,957 13,231Own shares 0 547 0 23,282 27,078 14,818 Current assetsStocks 4,799 7,821 3,987Debtors 16,892 22,547 13,203Current asset investment 0 0 2,750Cash at bank and in hand 0 0 2,988 21,691 30,368 22,928 CreditorsAmounts falling due within one year 22,974 27,516 14,125 Net current (liabilities) / assets (1,283) 2,852 8,803 Total assets less current liabilities 21,999 29,930 23,621 CreditorsAmounts falling due after one year 1,271 3,184 2,592 20,728 26,746 21,029 Provisions for liabilities and charges 1,182 953 1,393 Net assets excluding pension liability 19,546 25,793 19,636 Pension liability 3,223 3,494 3,723 Net assets including pension liability 16,323 22,299 15,913 Share capital & reservesCalled up share capital 3,697 3,697 3,697Share premium account 3,255 3,255 3,255Capital redemption reserve 1,209 1,209 1,209Other reserves (698) 0 (698)Profit and loss account 8,860 14,138 8,450 Equity shareholders' funds 16,323 22,299 15,913 CONSOLIDATED CASH FLOW Unaudited Audited Half year ended Half year ended Full Year ended 30 June 2005 30 June 2004 31 Dec 2004 £'000 £'000 £'000 Cash flow from operating activities - 4,358 3,179 11,172before exceptional items Exceptional cash costs (346) (976) (4,268) Pension scheme contributions (500) 0 0 Cash flow from operating activities 3,512 2,203 6,904after exceptional items Returns on investments andservicing of finance (280) (370) (709) Taxation (778) (416) (1,279) Capital expenditure andfinancial investment (744) 805 (128) Acquisitions and disposals (7,609) 0 11,482 Equity dividends paid (2,144) (2,144) (3,253) Financing - increase / (decrease) in 2,750 0 (2,750)short term deposits Financing - decrease in borrowings (2,725) (1,444) (8,645) (Decrease) / increase in cash (8,018) (1,366) 1,622 STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES Unaudited Audited Half year ended Half year ended 30 Full year ended 30 June 2005 June 2004 31 Dec 2004 £'000 £'000 £'000 Profit / (loss) for the period 410 238 (11,528) Actual return less expected return on 0 0 188pension scheme assetsExperience gains and losses arising on 0 0 (215)the scheme liabilitiesChanges in the assumptions underlying the 0 0 (514)present value of the scheme liabilitiesMovement on deferred taxation relating to 0 0 162pension liability Total recognised gains and losses for the 410 238 (11,907)period Prior year adjustment (see note 4) (3,723) Total recognised gains and losses since (3,313)last financial statements Notes : 1. Basis of preparation The figures for 31 December 2004 are extracted from the financial statements for that year which received anunqualified auditors' report and have been filed with the Registrar of Companies. The interim results whichare unaudited have been prepared in accordance with accounting policies adopted for the year ended 31 December2004 and have been approved by the board. The information set out in this interim report does not constitutestatutory accounts within the meaning of the Companies Act. 2. Dividends The interim dividend of 3.15p (2004 : 3.00p) will be paid on 14 October 2005 to shareholders registered on 16September 2005. 3. Earnings per share Earnings per share are based on the weighted average number of shares in issue in the six months to 30 June2005 of 36,656,419 (Six months to 30 June 2004 of 36,719,583 and 12 months to 31 December 2004 of 36,492,387). 4. Change in accounting policy The company has adopted FRS 17, "Retirement benefits" in the interim report. The adoption of this new standardin full represents a change in accounting policy and the comparative balance sheet figures have been restated toreflect a pension liability of £3,723,000 at 31 December 2004 (£3,494,000 at 30 June 2004). The change to theprofit and loss account is shown below. No interim revaluation of the assets and liabilities of the scheme has been carried out and, accordingly, thereis no actuarial gain or loss shown in the Statement of Recognised Gains or Losses in respect of the interimperiod to 30 June 2005 and 30 June 2004. Year ended Prior year Year ended 31 Dec 2004 as 31 Dec 2004 previously stated adjustment as restated £'000 £'000 £'000Profit and lossLoss before taxation (6,909) 213 (6,696)Taxation 1,515 64 1,579Loss after taxation (8,424) 149 (8,275) 5. This statement will be mailed to shareholders on or about 24 August 2005 and copies will be available fromThe Secretary, Nichols plc, Laurel House, 3 Woodlands Park, Ashton Road, Newton-le-Willows, WA12 0HH after thatdate. Copies of this statement are now available on the Investor Relations section of the company's website:www.nicholsplc.co.uk. This information is provided by RNS The company news service from the London Stock Exchange