Last checked at 7 Mar 2013 07:01
Date: | Embargoed until 07.00am, Thursday 7 March 2013
| |
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 | ||
Alex Brennan/Nick Lyon | Richard Lindley/Jonny Franklin-Adams | |
Hudson Sandler | N+1 Singer (Nominated Adviser) | |
Telephone:020 7796 4133 | Telephone: 0113 388 4855/ 0207 496 3000 | |
Email: nichols@hspr.com | Website: www.n1singer.com | |
Nichols plc
PRELIMINARY RESULTS
Nichols plc ("Nichols" or "the Group"), the soft drinks group, announces its Preliminary results for the year ended 31 December 2012.
Nichols plc is a highly focused soft drinks business; the Group has a leading market position in both the "still" and "carbonate" drinks categories. Its brand portfolio includes Vimto, which is sold in over 65 countries and Levi Roots, Weight Watchers, Sunkist & Panda which are sold in the UK.
Highlights:
·; Group sales up 9% to £107.8m (2011: £98.9m)
·; Profit before tax up 13% to £20.5m (2011: £18.1m)
·; Earnings per share up 14% to 41.4p (2011: 36.3p)
·; Proposed final dividend of 11.7p, total dividend for the year up 13% to 17.3p (2011:15.3p)
·; Sales in the UK grew 9%, significantly ahead of the market growth rate
·; International sales up 8% year on year
Commenting John Nichols, Non-Executive Chairman, said:
"Nichols delivered a very good performance in 2012 against a backdrop of tough comparatives and a challenging UK consumer environment. Driven by the strength of our brands and continued international penetration, the Group once again delivered double digit growth in profit, earnings per share and cash.
2013 will remain challenging and pressures on UK consumer spending show little sign of moderating. We are confident that the Group will continue to deliver profitable growth in the current year and beyond through sustained investment in our brands, further innovation and increasing market share."
Chairman's Statement
I am pleased to announce that 2012 was another very strong year for Nichols plc. Once again we have delivered double digit growth in profit, earnings per share and cash.
Group sales increased to £107.8m, up 9% on 2011, an excellent performance against our own tough prior year comparatives and the challenging UK retail environment. Continued high levels of raw material inflation impacted our UK gross margins; however, the sales growth combined with strong cost control led to increased operating margins. Overall the Group delivered a 13% increase in profit, with profit before tax of £20.5m, a £2.4m increase on 2011. As a result, earnings per share increased 14% to 41.4p.
Results
Year ended 31 Dec 2012 | Year ended 31 Dec 2011 | % Movement | |
£m | £m | ||
Group Revenue | 107.8 | 98.9 | +9% |
Operating Profit | 20.5 | 18.1 | +13% |
Operating Profit R.O.S. | 19% | 18% | |
Profit Before Tax | 20.5 | 18.1 | +13% |
Net Cash | 24.7 | 20.1 | +23% |
EPS (basic) | 41.4p | 36.3p | +14% |
Trading
Continuing the trend of recent years, sales growth has been delivered from both our domestic and export businesses.
Our UK sales grew 9% in 2012 to £85m, outperforming the UK soft drinks market which grew 3% (A C Nielsen 52 week data to 5 Jan 2013). The growth was driven by a strong performance from our core Vimto brand and our innovative new products such as Levi Roots and the recently launched Weight Watchers range of soft drinks.
Export sales totalled £22.7m in the year, up 8% against the prior year's tough comparatives (2011 +31%). Within the regions, the momentum in Africa continued with sales up 22% (2011 +28%) and sales into mainland Europe also increased by 24%. Sales into the Middle East region were broadly flat on last year partly due to the timing of shipments at the end of 2012 as well as the strong comparatives from the prior year (2011 +24%).
Dividend
Following another strong performance and reflecting confidence in the outlook, the Board is pleased to recommend a final dividend of 11.7 pence per share. This takes the total 2012 dividend to 17.32 pence (2011: 15.30 pence), an increase of 13%. If approved, the final dividend will be paid on 3 May 2013 to shareholders registered on 2 April 2013; the ex-dividend date is 27 March 2013.
Succession announcement
We have today announced that after ten successful years with the Group, Brendan Hynes, Chief Executive Officer, has informed the Board of his intention to step down at the AGM on 1 May 2013, in order to pursue a non-executive portfolio career. He will hand over the leadership of the business to Marnie Millard from the date of the AGM. Marnie is currently Managing Director of our UK Soft Drinks business. To ensure a seamless transition, Brendan will be available to assist with the handover through to the end of 2013.
The Board would like to thank Brendan for his contribution, which has helped to ensure that the business has made consistently strong progress during the last ten years.
Outlook
2012 was extremely challenging for the UK soft drinks market and the broader grocery market as consumer spending was restrained by the economic environment. The industry also had to deal with the effects of the second wettest summer on record, further dampening demand for soft drinks. Against this backdrop, the Group again outperformed the market, delivering EPS growth of 14%, profit growth of 13% and increasing its cash reserves.
Although we anticipate the UK retail environment will be just as challenging in 2013, we are confident that the Group will again outperform the market with continued investment behind our brands, launching innovative new products and further growth in our international markets.
In summary, the Board is confident that the Group is in a strong position to deliver further profitable growth in 2013 and beyond.
John Nichols
Non-Executive Chairman
7 March 2013
Chief Executive's Review
Nichols plc is a growing international business with an enviable stable of brands, selling to over 65 countries worldwide. We have leading market positions in both the Still and Carbonate drinks categories and continuously seek to bring new and innovative products to the soft drinks market both in the UK and internationally.
In 2012, Nichols plc was delighted to be awarded the prestigious Queen's Award for International Trade. This award is made annually to businesses achieving substantial overseas growth for a sustainable period by Her Majesty the Queen.
The UK Soft Drinks Market
In overall terms the UK soft drinks market, excluding the "on trade", grew by 3.0% in value terms but declined 1.0 % in volume terms (AC Nielsen 52 week data to 5 Jan 2013). Economic and consumer conditions continued to provide a big challenge, particularly in the UK. This, combined with significant raw material cost inflation and continued high levels of price promotion from the competition, led to an extremely competitive marketplace throughout the whole of 2012.
Despite this, we have once again been successful in growing our share of both the UK and international markets and, as a result, Group sales increased by 9% year on year and operating margins were maintained.
We have also continued to invest in our core brands, which has helped to increase our market share both in the UK and overseas, in the still and carbonate categories.
Group Financial Performance
In 2012 the Group delivered another strong financial performance, which was again ahead of both internal and external expectations.
To summarise our financial performance in 2012 we delivered:
·; 9% sales growth,
·; 13% profit growth
·; 14 % earnings per share growth (basic).
·; 13% dividend growth
In addition cash conversion was also strong and we ended the year with £24.7m of cash in the bank.
Trading Highlights
Sales in the UK increased by 9% to £85.0m (2011: £77.8m) driven by increased market share for Vimto, together with new product and brand extensions such as Weight Watchers and Levi Roots. We invested heavily in marketing in 2012, and again increased household penetration bringing new consumers into the Vimto brand.
Internationally, 2012 was another successful year with sales increasing by 8% to £22.7m. This was helped by Vimto again increasing its market share, particularly in key markets such as Africa and Europe. We sell to more than 28 countries in Africa and in 2012 increased sales by 22% in this region, in spite of very strong sales comparatives from last year.
In summary, growth from our existing core markets, both in the UK and overseas, combined with innovative new product developments and further new brand launches, has enabled the Group to deliver strong top and bottom line growth in 2012.
Corporate Responsibility
Nichols plc prides itself on having a sustainable business strategy which takes into account our wider corporate, environmental and social responsibilities.
Sustainability and the Environment
We continue to make good progress on each of the four key areas targeted, being
climate change, waste and packaging, water and transport.
We continue to work actively with the British Soft Drinks Association (BSDA), the Food and Drink Federation (FDF) and our key suppliers on environmental improvements. We are also signatories to the Courtauld Commitment and the Department of Health's Public Health Responsibility Deal.
Our high standards in health and safety continued in 2012 and we are an active member of Valpak, ensuring our compliance with waste regulations, and minimising the direct impact our business activities have on the external environment.
Community
Our commitment to the wider community continued in 2012 as we actively look to give something back in return for the support we enjoy. In 2012 our charity team once again worked hard on behalf of our chosen charity Derian House, including a 10 kilometre run, fund raising golf day and a wide variety of events involving our customers, suppliers and advisors.
Employees
As a team our core values emphasise the importance of customer service, quality, professionalism, teamwork and mutual support. We have a strong people orientated culture that is a key priority for our business and critical to our continuing success.
Our overriding objective is to consistently deliver high results in everything we do and this has once again been recognised externally with Nichols plc being shortlisted for the AIM company of the year in 2012, for the second year in succession.
Brendan Hynes
Chief Executive Officer
Consolidated income statement
Year ended 31 December 2012
Total
|
Total
| |
2012 | 2011 | |
£'000 | £'000 | |
Revenue | 107,788 | 98,912 |
Cost of sales
| (59,661) | (52,683) |
Gross profit
| 48,127 | 46,229 |
Distribution expenses | (6,569) | (5,862) |
Administrative expenses | (21,041) | (22,218) |
Operating profit | 20,517 | 18,149 |
Finance income | 324 | 72 |
Finance expense | (331) | (116) |
Profit before taxation |
20,510 |
18,105 |
Taxation
| (5,252) | (4,779) |
Profit for the financial year attributable to equity holders of the parent | 15,258 | 13,326 |
Earnings per share (basic) | 41.43p | 36.28p |
Earnings per share (diluted) | 41.38p | 36.25p |
Consolidated statement of comprehensive income
Year ended 31 December 2012
2012 | 2011 | |||||
£'000 | £'000 | |||||
Profit for the financial year | 15,258 | 13,326 | ||||
Other comprehensive expense | ||||||
Defined benefit plan actuarial loss | (773) | (2,926) | ||||
Deferred taxation on pension obligations and employee benefits | 78 | 842 | ||||
Other comprehensive expense for the year | (695) | (2,084) | ||||
Total comprehensive income for the year | 14,563 | 11,242 |
Statement of financial position
Year ended 31 December 2012
Group | Parent | |||||
2012 | 2011 | 2012 | 2011 | |||
ASSETS | £'000 | £'000 | £'000 | £'000 | ||
Non-current assets | ||||||
Property, plant and equipment | 1,275 | 1,374 | 398 | 461 | ||
Goodwill | 15,973 | 13,658 | 0 | 0 | ||
Investments | 0 | 0 | 16,566 | 16,566 | ||
Deferred tax assets | 2,148 | 2,579 | 2,082 | 2,512 | ||
Total non-current assets | 19,396 | 17,611 | 19,046 | 19,539 | ||
Current assets | ||||||
Inventories | 5,331 | 5,790 | 2,769 | 4,056 | ||
Trade and other receivables | 23,741 | 21,118 | 20,446 | 16,510 | ||
Cash and cash equivalents | 24,745 | 20,111 | 21,948 | 17,871 | ||
Total current assets | 53,817 | 47,019 | 45,163 | 38,437 | ||
Total assets | 73,213 | 64,630 | 64,209 | 57,976 | ||
LIABILITIES | ||||||
Current liabilities | ||||||
Trade and other payables | 19,377 | 20,073 | 20,427 | 21,154 | ||
Current tax liabilities | 2,191 | 1,752 | 1,368 | 1,138 | ||
Provisions | 47 | 139 | 47 | 99 | ||
Total current liabilities | 21,615 | 21,964 | 21,842 | 22,391 | ||
Non-current liabilities | ||||||
Pension obligations | 6,556 | 6,313 | 6,556 | 6,313 | ||
Deferred tax liabilities | 47 | 51 | 0 | 0 | ||
Total non-current liabilities | 6,603 | 6,364 | 6,556 | 6,313 | ||
Total liabilities | 28,218 | 28,328 | 28,398 | 28,704 | ||
Net assets | 44,995 | 36,302 | 35,811 | 29,272 | ||
EQUITY | ||||||
Share capital | 3,697 | 3,697 | 3,697 | 3,697 | ||
Share premium reserve | 3,255 | 3,255 | 3,255 | 3,255 | ||
Capital redemption reserve | 1,209 | 1,209 | 1,209 | 1,209 | ||
Other reserves | (474) | (546) | 301 | 229 | ||
Retained earnings | 37,308 | 28,687 | 27,349 | 20,882 | ||
Total equity | 44,995 | 36,302 | 35,811 | 29,272 | ||
Consolidated statement of cash flows
Year ended 31 December 2012
2012 | 2012 | 2011 | 2011 |
| |
£'000 | £'000 | £'000 | £'000 | ||
Profit for the financial year | 15,258 | 13,326 | |||
Cash flows from operating activities | |||||
Adjustments for: | |||||
Depreciation | 460 | 467 | |||
Loss on sale of property, plant and equipment | 2 | 26 | |||
Finance income | (324) | (72) | |||
Tax expense recognised in the income statement | 5,252 | 4,779 | |||
Change in inventories | 611 | (1,674) | |||
Change in trade and other receivables | (2,297) | (4,069) | |||
Change in trade and other payables | (1,071) | 4,794 | |||
Change in provisions | (92) | (226) | |||
Change in pension obligations | (530) | (748) | |||
2,011 | 3,277 | ||||
| |||||
Cash generated from operating activities | 17,269 | 16,603 | |||
Tax paid | (4,545) | (3,794) | |||
Net cash generated from operating activities | 12,724 | 12,809 | |||
Cash flows from investing activities | |||||
Finance income | 324 | 72 | |||
Proceeds from sale of property, plant and equipment | 7 | 1 | |||
Acquisition of property, plant and equipment | (297) | (302) | |||
Acquisition of subsidiary, net of cash acquired | (2,254) | (2,300) | |||
Acquisition of subsidiary's net overdraft | 0 | (24) | |||
Net cash used in investing activities | (2,220) | (2,553) | |||
Cash flows from financing activities | |||||
(Acquisition)/disposal of own shares | (4) | 83 | |||
Dividends paid | (5,866) | (5,195) | |||
Net cash used in financing activities | (5,870) | (5,112) | |||
Net increase in cash and cash equivalents | 4,634 | 5,144 | |||
Cash and cash equivalents at 1 January | 20,111 | 14,967 | |||
Cash and cash equivalents at 31 December | 24,745 | 20,111 | |||
Consolidated statement of changes in equity
Year ended 31 December 2012
Called up share capital £'000 | Share premium reserve £'000 | Capital redemption reserve £'000 | Other reserves
£'000 | Retained earnings
£'000 | Total Equity
£'000 | |
At 1 January 2011 | 3,697 | 3,255 | 1,209 | (629) | 22,644 | 30,176 |
Dividends | 0 | 0 | 0 | 0 | (5,195) | (5,195) |
Movement in ESOT | 0 | 0 | 0 | 83 | (4) | 79 |
Transactions with owners | 0 | 0 | 0 | 83 | (5,199) | (5,116) |
Profit for the year | 0 | 0 | 0 | 0 | 13,326 | 13,326 |
Other comprehensive expense | 0 | 0 | 0 | 0 | (2,084) | (2,084) |
Total comprehensive income | 0 | 0 | 0 | 0 | 11,242 | 11,242 |
At 1 January 2012 | 3,697 | 3,255 | 1,209 | (546) | 28,687 | 36,302 |
Dividends | 0 | 0 | 0 | 0 | (5,866) | (5,866) |
Movement in ESOT | 0 | 0 | 0 | 72 | (76) | (4) |
Transactions with owners | 0 | 0 | 0 | 72 | (5,942) | (5,870) |
Profit for the year | 0 | 0 | 0 | 0 | 15,258 | 15,258 |
Other comprehensive expense | 0 | 0 | 0 | 0 | (695) | (695) |
Total comprehensive income | 0 | 0 | 0 | 0 | 14,563 | 14,563 |
At 31 December 2012 | 3,697 | 3,255 | 1,209 | (474) | 37,308 | 44,995 |
Nichols plc
NOTES TO THE PRELIMINARY FINANCIAL INFORMATION
Basis of Preparation
The preliminary financial information does not constitute statutory accounts for the financial years ended 31 December 2012 and 31 December 2011, but has been derived from those accounts. Statutory accounts for 2011 have been delivered to the Registrar of Companies and those for the financial year ended 31 December 2012 will be delivered following the Company's annual general meeting. The auditors have reported on those accounts and their reports were unqualified and did not contain statements under section 498(2) or (3) of the Companies Act 2006.
Earnings per Share
The calculation of basic earnings per share is based on earnings attributable to ordinary shareholders divided by the weighted average number of shares in issue during the year. Shares held in the Employee Share Ownership Trust and Employee Benefit Trust are treated as cancelled for the purposes of this calculation.
The calculation of diluted earnings per share is based on the basic earnings per share adjusted to allow for the assumed conversion of all dilutive options.
Basic earnings per share is 41.43 pence (2011: 36.28 pence).
Annual Report
The annual report will be mailed to shareholders on or around 2 April 2013. 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 1 May 2013 at 11.00am.
Copies of the announcement can be found on the Investors Relations section of the company's website: www.nicholsplc.co.uk.