Last checked at 4 Aug 2011 07:00
Date: | Embargoed until 07.00am, Thursday 4 August 2011
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Contacts: | John Nichols, Non-Executive Chairman | |
Brendan Hynes, Group Chief Executive Tim Croston, Group Finance Director | ||
Nichols plc | ||
Telephone: 01925 222222 | ||
Website: www.nicholsplc.co.uk | ||
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Alistair Mackinnon-Musson | Mark Brady | |
Nathan Field | Brewin Dolphin Ltd | |
Hudson Sandler | (Nominated Adviser) | |
Telephone: 020 7796 4133 | Telephone: 0845 213 4729 | |
Email: nichols@hspr.com | Website: www.corporatefinance.brewin.co.uk | |
Nichols plc
INTERIM RESULTS
"Excellent Results - Sales up 14% and Profits up 20%"
Nichols plc, the soft drinks group, announces its Interim results for the period ended 30 June 2011.
Nichols plc is a highly focused soft drinks business. Its brand portfolio includes Vimto, which is sold in over 65 countries and Levi Roots (soft drinks), Sunkist & Panda which are sold in the UK. The Group has a leading market position in both the "Stills" and "Carbonates" drinks categories and also in the soft drinks on dispense market, where its brands include Cabana, Ben Shaws & Dayla.
Highlights:
·; Group sales up 14.4%
·; Profit before tax up 20.4%
·; EPS up 23.8%
·; Interim dividend up 12.4%
·; UK volumes up 11% against a market up only 1% (source: AC Nielsen)
·; UK sales up 13% / International sales up 13%
·; Net cash of £14.4m (2010: £11.7m)
Commenting John Nichols, Non-Executive Chairman, said:
"I am delighted to be announcing such excellent results, strongly ahead of last year's outstanding performance. We have again grown our UK market share and our international business continues to thrive. We expect full year profits will be significantly ahead of last year."
Chairman's Statement
On the back of last year's excellent results, I am extremely pleased to report the Group has once again delivered significant growth in both sales (up 14%) and profit before tax (up 20%) in the first half.
In context, our strong performance was also achieved against the well documented economic challenges affecting the consumer, compounded by almost unprecedented raw material cost inflation in the food & drinks sector. I am therefore delighted to be announcing these excellent Interim results.
Results
| Half Year ended 30 June 2011 | Half Year ended 30 June 2010 | % movement |
£m | £m | £m | |
| |||
Group Revenue | 50.5 | 44.2 | 14.4% |
Operating Profit | 7.2 | 6.0 | 20.5% |
Profit Before Tax | 7.2 | 6.0 | 20.4% |
EPS (basic) | 14.62p | 11.81p | 23.8% |
Net Cash | 14.4 | 11.7 | 23.2% |
Trading
Volumes in our UK soft drinks business were 11% up on last year, delivering a 13% sales increase to £28.3m, against a UK soft drinks market which grew by only 1% in volume terms and 6% in value (AC Nielsen 26 weeks to 9 July 2011).
In April we launched our Levi Roots branded range of Caribbean soft drinks and we are pleased to report that sales to date are in line with our expectations.
Our International sales grew by 13% in the first half of the year, with sales to the Middle East up 11% and sales to Africa up 14%, following a strong performance last year.
In March 2011 we acquired the remaining 50% equity of Dayla Liquid Packing Ltd (Dayla), this has generated additional revenue of £1.4m, which contributed to a 20% increase in sales at the half year for our Dispense business. Like for like sales without the incremental Dayla revenues increased by 5% year on year.
I am pleased to report that whilst our gross margin in the UK business is under pressure from the challenges of raw material cost inflation in the food and drinks sector, we have maintained our Group operating margin at the half year. This has been achieved by a combination of price increases, cost efficiencies, new product development and international business growth, which has mitigated the adverse impact.
Dividend
Based on these robust results at the half year and our ongoing confidence for the future, the Board has approved an Interim dividend of 5.00 pence (2010: 4.45 pence), an increase of 12.4%.
The Interim dividend will be paid on 9 September 2011 to shareholders registered on 12 August 2011.
Outlook
The period of economic uncertainty and cost inflation is likely to continue in the UK for the remainder of the year and into 2012. We are confident, however, of maintaining our growth momentum by continuing to invest in our existing brands, developing new products and expanding our International business, whilst keeping a strong control over costs.
At this stage, we expect full year profits will be significantly ahead of last year.
John Nichols
Non-Executive Chairman
4 August 2011
CONSOLIDATED INCOME STATEMENT
Unaudited | Unaudited | Audited | Audited | |
before exceptional items | after exceptional items | |||
Half year ended 30 Jun 2011 | Half year ended 30 Jun 2010 | Full year ended 31 Dec 2010 | Full year ended 31 Dec 2010 | |
£'000 | £'000 | £'000 | £'000 | |
Revenue | 50,493 | 44,151 | 83,899 | 83,899 |
Operating profit | 7,252 | 6,019 | 15,117 | 14,824 |
Finance income | 45 | 71 | 129 | 129 |
Finance expense | (60) | (81) | (163) | (163) |
Profit before taxation | 7,237 | 6,009 | 15,083 | 14,790 |
Taxation | (1,876) | (1,694) | (4,042) | (3,966) |
Profit for the financial period | 5,361 | 4,315 | 11,041 | 10,824 |
Earnings per share (basic) - all activities
| 14.62p | 11.81p | 29.63p | |
Earnings per share (diluted) - all activities | 14.59p | 11.66p | 29.59p | |
Dividends paid per share | 9.10p | 8.10p | 12.55p |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Unaudited | Unaudited | Audited | |||
Half year ended 30 Jun 2011 | Half year ended 30 Jun 2010 | Full year ended 31 Dec 2010 | |||
£'000 | £'000 | £'000 | |||
Profit for the financial period | 5,361 | 4,315 | 10,824 | ||
Other comprehensive income:
Defined benefit plan actuarial gain | 0 | 0 | 74 | ||
Deferred taxation on pension obligations | 0 | 0 | 28 | ||
Other comprehensive income for the year | 0 | 0 | 102 | ||
Total recognised income and expense for the period | 5,361 | 4,315 | 10,926 | ||
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited | Unaudited | Audited | |||
30 Jun 2011 | 30 Jun 2010 | 31 Dec 2010 | |||
£'000 | £'000 | £'000 | |||
ASSETS | |||||
Non-current assets | |||||
Property, plant and equipment | 1,524 | 1,665 | 1,288 | ||
Goodwill | 13,482 | 11,711 | 11,914 | ||
Deferred tax assets | 2,587 | 2,829 | 2,587 | ||
Total non-current assets | 17,593 | 16,205 | 15,789 | ||
Current assets | |||||
Inventories | 6,108 | 5,002 | 3,418 | ||
Trade and other receivables | 25,552 | 21,207 | 16,272 | ||
Cash and cash equivalents | 14,414 | 11,695 | 14,967 | ||
Total current assets | 46,074 | 37,904 | 34,657 | ||
Total assets | 63,667 | 54,109 | 50,446 | ||
LIABILITIES | |||||
Current liabilities | |||||
Trade and other payables | 25,168 | 21,612 | 14,165 | ||
Current tax liabilities | 1,945 | 1,659 | 1,533 | ||
Provisions | 172 | 185 | 365 | ||
Total current liabilities | 27,285 | 23,456 | 16,063 | ||
Non-current liabilities | |||||
Pension obligations | 4,135 | 4,744 | 4,135 | ||
Deferred tax liabilities | 93 | 99 | 72 | ||
Total non-current liabilities | 4,228 | 4,843 | 4,207 | ||
Total liabilities | 31,513 | 28,299 | 20,270 | ||
Net assets | 32,154 | 25,810 | 30,176 | ||
EQUITY | |||||
Share capital | 3,697 | 3,697 | 3,697 | ||
Additional paid in capital | 3,255 | 3,255 | 3,255 | ||
Capital redemption reserve | 1,209 | 1,209 | 1,209 | ||
Other reserves | (629) | (357) | (629) | ||
Retained earnings | 24,622 | 18,006 | 22,644 | ||
Total equity | 32,154 | 25,810 | 30,176 | ||
CONSOLIDATED STATEMENT OF CASH FLOWS
Unaudited Half year ended 30 Jun 2011 | Unaudited Half year ended 30 Jun 2010 | Audited Full year ended 31 Dec 2010 | ||||
£'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
Profit for the financial period | 5,361 | 4,315 | 10,824 | |||
Cash flows from operating activities | ||||||
Adjustments for: | ||||||
Depreciation | 200 | 308 | 542 | |||
Loss/ (profit) on sale of property, plant and equipment | 3 | (1) | 241 | |||
Equity-settled share based payment transactions | 0 | 0 | (627) | |||
Finance income | (43) | (71) | (129) | |||
Finance expense | 60 | 81 | 0 | |||
Taxation expense recognised in the income statement | 1,876 | 1,694 | 3,966 | |||
Change in inventories | (2,011) | (2,308) | (724) | |||
Change in trade and other receivables | (8,533) | (5,572) | (886) | |||
Change in trade and other payables | 10,331 | 9,363 | 2,439 | |||
Change in provisions | (192) | (70) | 110 | |||
Change in pension obligations | 0 | 0 | (534) | |||
1,691 | 3,424 | 4,398 | ||||
Cash generated from operating activities | 7,052 | 7,739 | 15,222 | |||
Tax paid | (1,464) | (1,594) | (3,777) | |||
Net cash generated from operating activities | 5,588 | 6,145 | 11,445 | |||
Cash flows from investing activities | ||||||
Finance income | 43 | 47 | 139 | |||
Proceeds from sale of property, plant and equipment | 0 | 5 | 5 | |||
Acquisition of property, plant and equipment | (142) | (405) | (503) | |||
Acquisition of subsidiary, net of cash acquired | (2,300) | 0 | 0 | |||
Acquisition of subsidiary's net overdraft | (24) | 0 | 0 | |||
Acquisition of business trade and assets | 0 | (2,300) | (2,733) | |||
Net cash used in investing activities | (2,423) | (2,653) | (3,092) | |||
Cash flows from financing activities | ||||||
Finance expense | 0 | (49) | 0 | |||
Repayment of borrowings | (365) | 0 | 0 | |||
Dividends paid | (3,353) | (2,963) | (4,601) | |||
Net cash used in financing activities | (3,718) | (3,012) | (4,601) | |||
Net (decrease)/ increase in cash and cash equivalents | (553) | 480 | 3,752 | |||
Cash and cash equivalents at beginning of period | 14,967 | 11,215 | 11,215 | |||
Cash and cash equivalents at end of period | 14,414 | 11,695 | 14,967 | |||
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 2010, 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 2010. 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 5.00p (2010: 4.45p) will be paid on 9 September 2011 to shareholders registered on 12 August 2011. The ex dividend date is 10 August 2011.
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 2011 of 36,678,398 (six months to 30 June 2010 of 36,522,046 and 12 months to 31 December 2010 of 36,531,394).
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.