Nichols plc Regulatory News (NICL)

2 Aug 2006 07:01

Nichols PLC02 August 2006 Date: Embargoed until 07.00hrs, Wednesday 2 August 2006 Contacts: John Nichols, Executive Chairman Brendan Hynes, Group Finance Director Nichols plc Telephone: 01925 222222 Website: www.nicholsplc.co.uk Alistair Mackinnon-Musson Nicola Savage Hudson Sandler Telephone: 020 7796 4133 Email: nichols@hspr.com 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 2006. 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 'dispense') Highlights: • Sales from continuing operations up 6.7% on June 2005 • Profit before tax up 15.1% (on continuing activities & before exceptional items) on June 2005 • EPS up 18.8% to 5.11 pence (2005: 4.30 pence) • Interim dividend up 4.8% to 3.30 pence per share (2005: 3.15 pence) • Cash inflow of £8.76 million (2005: outflow of £8.04 million) in first half (before financing) • Net cash balance at period end £2.44 million (2005: £9.01 million debt) • Vimto continues to grow market share at maintained margin on increased volumes • Panda successfully re-formulated, re-launched and to be supported by national TV & cinema advertising during the school holidays • International sales (of Vimto) ahead of last year • Five new distributors added to the Cabana business Commenting John Nichols, Chairman, said: "We are now a stronger and more focused business with no borrowings, positivecash and our core brands, particularly Vimto, continuing to perform strongly ina highly competitive market place". "Given the momentum we now have and with better than average summer weather sofar, we anticipate that our full year results will show further progress". Chairman's Statement The Group's re-shaping continues to produce real benefits and I am thereforeextremely pleased to report a fourth consecutive year of improved Interimprofits and a much stronger balance sheet and cash position. In the six months to 30 June 2006 profit on continuing activities beforeexceptional items was up 15.1% on last year to £2.27 million (2005: £1.97million). Turnover on continuing operations was also ahead, up 6.7% to £26.19million (2005: £24.54 million). The first half year saw the disposal of Balmoral, our hot beverage business, inmid-January for £6.5 million in cash and in March the sale of a surplus freeholdproperty in Golborne, Greater Manchester, for a further £6.1 million in cash.The combination of these two events also enabled the Group to repay all its bankborrowings in the first half, resulting in a net cash inflow (before financing)of £8.76 million (2005: £8.04 million outflow). We are now a highly focused soft drinks and dispense business, comprising twooperations: 1) Soft Drinks - the sale of the Vimto brand throughout the worldand the Panda and Sunkist brands in the UK; and 2) Beverage Systems - namelyCabana, soft drinks on draught ('dispense'). All our efforts and investment arenow concentrated on these two areas. Soft Drinks Operation I am delighted to report that our core Vimto brand has continued to grow itsshare in a highly competitive marketplace. This has also been achieved with asensible mix of promotional activity enabling us to maintain our margin and togrow successfully both our sales value as well as our sales volumes. In April we re-launched the Panda brand, aimed at the children's market, as anatural flavoured, sugar free, soft drink. To date it has been very wellreceived by the trade and for the first time ever, during the school holidays itis being supported by a national TV and cinema advertising campaign. Today, Vimto is available in over 65 countries overseas and our internationalbusiness (sales of the Vimto brand) has performed well in the first half year,with our core long-term markets in the Middle East and Africa both showingincreased sales over last year. Beverage Systems Operation With the disposal of Balmoral in January 2006, this division is now entirelyfocused on dispensing cold soft drinks on draught. In the first half year wesuccessfully attracted five new distributors to our Cabana business and thetransformation of beverage systems to a franchised distribution model continues. 2006 is a year of transition for Beverage Systems, but given the changes made todate, it is now well on its way to securing a place as the third largestoperator in this sector. Results Turnover on continuing operations in the half year to 30 June 2006 was up 6.7%to £26.19 million (2005: £24.54 million). Profit before tax increased by 15.1% to £2.27 million (2005: £1.97 million,pre-exceptional). Exceptional items comprise an exceptional gain of £2.16 million on the disposalof Balmoral Trading Limited and a gain of £0.13 million on the disposal of thelong leasehold property at Golborne. This was offset by £2.11 million ofexceptional charges associated with the re-structuring of our Cabana business,principally non-cash items relating to asset impairment and onerous leasecontracts. FRS 17 costs, including interest charges, relate to the company adopting the newaccounting standard in relation to the final salary pension scheme, which is nowclosed to new members. FRS 20 "Share Based Payments" will be adopted for the first time in 2006; theInterim results include an estimate of the impact on the half year results. Cash inflow (before financing) was £8.76 million (2005: £8.04 million outflow)with net cash balances of £2.44 million (2005: £9.01 million debt). Earnings per share increased by 18.8% to 5.11 pence (2005: 4.30 pence). Given the consistent progress we have made, the strong cash position, and ourconfidence in the future, the Board has approved a 4.8% increase in the Interimdividend to 3.30 pence per share (2005: 3.15 pence). The dividend will be paid on 15 September 2006 to shareholders registered on 11August 2006. The ex-dividend date will be 9 August 2006. Outlook The Group is now a stronger and more focused business with no borrowings,positive cash and its core brands, particularly Vimto, continuing to performstrongly in a highly competitive market place. We expect this robust trading tocontinue into the second half of the year. Given the momentum we now have in our core business and with a better thanaverage summer so far, we anticipate that our full year results will showfurther progress. John NicholsChairman 2 August 2006 CONSOLIDATED PROFIT AND LOSS ACCOUNT Unaudited Unaudited Audited Half year ended 30 June 2006 Restated Before Exceptional Total Half year ended Full year exceptional items and 30 June 2005 ended items and FRS17 31 Dec 2005 FRS17 charges charges £'000 £'000 £'000 £'000 £'000Turnover Continuing operations 26,188 0 26,188 24,542 51,521 Discontinued operations 0 0 0 5,994 11,815 26,188 0 26,188 30,536 63,336Operating profit / (loss) Continuing operations 2,250 (2,170) 80 2,255 6,166 Discontinued operations 0 0 0 276 537Profit on disposal of 0 2,166 2,166 0 0subsidiary undertaking andtangible fixed assetsNet interest receivable / (payable) 25 (60) (35) (280) (707) Profit before taxation 2,275 (64) 2,211 2,251 5,996Taxation 336 675 1,999 Profit after taxation 1,875 1,576 3,997 Earnings per share (basic) 5.11p 4.30p 10.91pEarnings per share (diluted) 5.09p 4.28p 10.88p Dividends per share 3.30p 3.15p 9.25p CONSOLIDATED BALANCE SHEET Unaudited Unaudited Audited Restated 30 June 2006 30 June 2005 31 Dec 2005 £'000 £'000 £'000Fixed assetsIntangible assets 9,248 9,718 9,504Tangible assets 4,053 13,564 13,563 13,301 23,282 23,067 Current assetsStocks 3,053 4,799 3,972Debtors 17,599 16,892 14,592Cash at bank and in hand 2,448 0 0 23,100 21,691 18,564 CreditorsAmounts falling due within one year 13,097 21,808 17,532 Net current assets / (liabilities) 10,003 (117) 1,032 Total assets less current liabilities 23,304 23,165 24,099 CreditorsAmounts falling due after one year 0 1,271 750 23,304 21,894 23,349 Provisions for liabilities and charges 2,287 1,182 1,452 Net assets excluding pension liability 21,017 20,712 21,897 Pension liability 4,406 3,223 4,906 Net assets including pension liability 16,611 17,489 16,991 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) (698) (698)Profit and loss account 9,148 10,026 9,528 Shareholders' funds 16,611 17,489 16,991 CONSOLIDATED CASH FLOW Unaudited Restated Audited Half year Half year Full year ended ended ended 30 June 2006 30 June 2005 31 Dec 2005 £'000 £'000 £'000 Operating profit before exceptional items 2,250 2,531 6,703Exceptional items - non cash costs 1,930 0 (159)Exceptional items - cash costs (232) (346) (1,194)Amortisation and depreciation 829 961 2,061(Profit)/ loss on sale of tangible fixed 8 111 (7)assetsWorking capital movements (4,972) 755 3,300Pension scheme contributions (500) (500) (1,000) Cash flow from operating activities (687) 3,512 9,704after exceptional items Returns on investments andservicing of finance (35) (280) (575) Taxation (482) (778) (2,004) Capital expenditure, fixed assetdisposals and financial investment 5,760 (744) (1,556) Acquisitions and disposals 6,455 (7,609) (8,215) Equity dividends paid (2,255) (2,144) (3,309) Cash inflow/ (outflow) before use of 8,756 (8,043) (5,955)liquid resources Financing - increase in short term deposits 0 2,750 2,750 Financing - repayment of borrowings (6,308) (2,725) 217 Increase / (decrease) in cash 2,448 (8,018) (2,988) STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES Unaudited Restated Audited Half year ended Half year ended Full year ended 30 June 2006 30 June 2005 31 Dec 2005 £'000 £'000 £'000 Profit for the period 1,875 1,576 3,997 Actual return less expected return 0 0 1,004on pension scheme assetsExperience gains and losses arising 0 0 (1,194)on the scheme liabilitiesChanges in the assumptions 0 0 (2,316)underlying the present value of thescheme liabilitiesMovement on deferred taxation 0 0 752relating to pension liability Total recognised gains and losses 1,875 1,576 2,243for the period Prior year adjustment 0 (3,723) (1,579) Total recognised gains and losses 1,875 (2,147) 664since last financial statements Notes: 1. Basis of preparation The figures for 31 December 2005 are extracted from the financial statements forthat year which received an unqualified auditor's report and have been filedwith the Registrar of Companies. The Interim results which are unaudited havebeen prepared in accordance with accounting policies adopted for the year ended31 December 2005 and have been approved by the board. The information set outin this Interim report does not constitute statutory accounts within the meaningof the Companies Act. 2. Profit Before Tax (and exceptional items) Profit before tax (and exceptional items) can be split between continuing anddiscontinued activities as shown in the table below. June 2006 June 2005 December 2005 PBT on continuing activities 2,275 1,975 6,644PBT on discontinued activities 0 276 537 Profit Before Tax 2,275 2,251 7,181 3. Dividends The Interim dividend of 3.30p (2005: 3.15p) will be paid on 15 September 2006 toshareholders registered on 11 August 2006. The ex dividend date is 9 August2006. 4. Earnings per share Earnings per share are based on the weighted average number of shares in issuein the six months to 30 June 2006 of 36,693,536 (six months to 30 June 2005 of36,656,419 and 12 months to 31 December 2005 of 36,633,627). 5. Change in accounting policies FRS 20 "Share Based Payments" will be adopted for the first time in thefinancial statements for the year ended 31 December 2006. The Interim financialstatements include an estimate of the impact of the FRS 20 charge on the halfyear results. The impact of FRS 21 "Events after the balance sheet" has resulted in arestatement in the comparative Interim profit and loss and balance sheet figuresto reflect the dividend declared after the prior year Interim period not beingrecognised as a liability in the prior year Interim balance sheet. In respect of FRS 17 "Retirement Benefits", no interim valuation of the assetsand liabilities of the scheme has been carried out and accordingly, thestatement of total recognised gains and losses has not been updated to reflectany actuarial gain or loss. An estimate of the charge has however been made andthis is reflected in the profit and loss account. 6. Exceptional Items On 12 January 2006, the group disposed of Balmoral Trading Limited for a cashconsideration of £6.5m. On 3 March 2006, the group completed the sale of surplus long leasehold propertyat Golborne for a cash consideration of £6.1m. During the period, Cabana changed its business model from an in house model to adistributor based model. This has resulted in an impairment of the fixed assetsof £1.6m, a provision for onerous leases of £0.4m and redundancy costs of £0.1m. 7. This statement will be mailed to shareholders on or about 14 August 2006and copies will be available from The Secretary, Nichols plc, Laurel House, 5Woodlands Park, Ashton Road, Newton-le-Willows, WA12 0HH after that date.Copies of this statement are now available on the Investor 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