Date: Embargoed until 0700 Thursday 24th July 2014
Telephone: 01925 222222
Website:www.nicholsplc.co.uk
Alex Brennan Richard Lindley
Telephone:020 7796 4133 Telephone: 0113 388 4855/ 0207 496 3000
Email: nichols@hspr.com Website: www.n1singer.com
Nichols plc ('Nichols', the 'Group'), the soft drinks Group, announces its interim results for the period ended 30 June 2014 (the 'period').
Nichols plc is a highly focused soft drinks business. Its brand portfolio includes Vimto, which is sold in over 65 countries and Levi Roots, Sunkist, Panda and Weight Watchers which are sold in the UK. The Group has a leading market position in both the "Still" and "Carbonate" drinks categories.
• Pre-exceptional Profit before Tax up 11% to £10.0m
• Pre-exceptional Basic Earnings Per Share up 13% to 21.23p
• Interim dividend up 12% to 7.1p
"Nichols has delivered another strong performance during the first half of 2014. I am pleased to report that once again the Group has delivered double digit growth in pre-exceptional profit and earnings per share. The Board anticipates that full year performance will be in line with current expectations."
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Chairman's Statement
I am pleased to report that the Group has delivered another robust performance during the first half of 2014. During the period we have achieved strong growth of 11% in pre- exceptional profit and 13% in earnings per share.
Group sales for the first six months of 2014 totalled £56.6m, an increase of 3% over the prior year. The Group's on-going strategy of focusing on value over volume resulted in an enhanced operating performance with operating profit increasing by 12% to £9.9m (2013:
£8.9m) and operating margins of 18% (2013:16%). Pre-exceptional profit before tax grew by
11% to £10.0m (2013: £9.0m).
Half Year ended 30 June 2014 | Half Year ended 30 June 2013 | % movement | |
£m | £m | ||
Group Revenue | 56.6 | 55.2 | +3% |
Operating Profit | 9.9 | 8.9 | +12% |
Operating Profit R.O.S. | 18% | 16% | |
Profit Before Tax | 10.0 | 9.0 | +11% |
EPS (basic) | 21.23p | 18.76p | +13% |
Interim Dividend | 7.1p | 6.32p | +12% |
Continuing the trend from the second half of 2013, our UK sales grew to £43.8m, up by 8% compared to the corresponding period in 2013. This performance is ahead of the UK soft drinks market which grew at 2.7% (Source: Nielsen 6 months to 21 June 2014). Sales growth in the UK was largely driven by the Carbonate category which was 11% ahead compared to the first six months of 2013. Importantly, the incremental sales were achieved whilst maintaining the margin. Our sales into the Still category grew by 3% compared to the prior year.
Our international sales revenue was £12.8m at the half year, 12% behind the prior year which is in line with management expectations. The performance at the half year point is mainly driven by a shift in timing of shipments of Vimto concentrate to the Middle East. Significantly, in-country sales of finished product in the Middle East region are 7% ahead of
2013 and we expect international sales in the second half of 2014 to show improved performance in comparison to both the period and the second half of 2013.
During the period, stronger Sterling rates against both the US Dollar and the Euro have negatively impacted our international sales, accounting for 3ppts of the 12% year on year decline.
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As announced on 2 July 2014, the High Court awarded damages against Nichols plc with regard to the litigation claim from Gul Bottlers (PVT) Ltd. As a consequence, a one-off exceptional cost of £8.0m has been included in the Group's consolidated income statement for the period to 30 June 2014.
DividendReflecting our strong balance sheet and the Board's continued confidence in the outlook, I am pleased to announce that we are recommending an interim dividend of 7.1 pence per share, an increase of 12% over the prior year (2013: 6.32 pence). The interim dividend will be paid on 29 August 2014 to shareholders registered on 1 August 2014.
Outlook
We expect our UK performance for the remainder of 2014 to maintain the positive trend seen in the first half of the year.
In light of the strong performance of in-country sales and the change in timing of shipments to the Middle East, we anticipate International revenues in the second half of 2014 to be ahead of the prior year.
In summary, the Board believes that full year performance will be in line with current expectations.
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CONSOLIDATED INCOME STATEMENTUnaudited | Unaudited | Audited | Audited | ||
before | Unaudited | after | before | after | |
exceptional | exceptional | exceptional | exceptional | exceptional | |
items | items | items | Unaudited | items | items |
Exceptional items - (7,976) (7,976) - - (3,680) Finance income 140 - 140 205 347 347
Finance expense (60) - (60) (61) (264) (264)
Profit before taxation 10,010 (7,976) 2,034 9,004 22,510 18,830Taxation (2,188) 1,715 473 (2,094) (5,645) (4,721)
Profit for the financial period 7,822 (6,261) 1,561 6,910 16,865 14,109Earnings per share
(basic)
- all activities
21.23p 4.24p 18.76p 38.30p
Earnings per share
(diluted) - all activities
21.21p 4.23p 18.75p 38.25p
Dividends paid per
share 13.30p 11.70p 18.02p
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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Unaudited Unaudited Audited Half year ended 30 Jun 2014 Half year ended 30 Jun 2013 Full year ended 31 Dec 2013 £'000 £'000 £'000 Profit for the financial period 1,561 6,910 14,109 Other comprehensive income:Defined benefit plan actuarial gain 0 0 1,909
Deferred taxation on pension obligations 0 0 (308)
Other comprehensive income for the period 0 0 1,601 Total comprehensive income for the period 1,561 6,910 15,7105
CONSOLIDATED STATEMENT OF FINANCIAL POSITION Unaudited Unaudited Audited 30 Jun 2014 30 Jun 2013 31 Dec 2013 ASSETS Non-current assets £'000 £'000 £'000Property, plant and equipment 4,791 1,379 1,295
Goodwill 16,447 15,973 16,057
Deferred tax assets 1,321 2,148 1,321
Total non-current assets 22,559 19,500 18,673Current assets | |||
Inventories | 5,694 | 5,913 | 4,144 |
Trade and other receivables | 23,998 | 24,374 | 22,721 |
Cash and cash equivalents 32,903 31,208 34,293
Total current assets 62,595 61,495 61,158 Total assets 85,154 80,995 79,831LIABILITIES | |||
Current liabilities | |||
Trade and other payables | 20,187 | 24,531 | 18,152 |
Current tax liabilities | 508 | 2,232 | 1,675 |
Provisions 9,812 34 2,018
Total current liabilities 30,507 26,797 21,845 Non-current liabilitiesPension obligations 4,047 6,556 4,047
Deferred tax liabilities - 47 -
Total non-current liabilities 4,047 6,603 4,047 Total liabilities 34,554 33,400 25,892 Net assets 50,600 47,595 53,939EQUITY | |||
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 | (598) | (474) | (598) |
Retained earnings 43,037 39,908 46,376
Total equity 50,600 47,595 53,9396
CONSOLIDATED STATEMENT OF CASH FLOWS Unaudited Half year ended 30 Jun 2014 Unaudited Half year ended 30 Jun 2013 Audited Full year ended 31 Dec 2013Profit for the financial period Cash flows from operating activities | £'000 | £'000 1,561 | £'000 | £'000 6,910 | £'000 | £'000 14,109 |
Adjustments for: | ||||||
Depreciation (Gain)/loss on sale of property, plant and equipment | 224 (6) | 253 4 | 513 11 | |||
Finance income | (140) | (205) | (347) | |||
Finance expense Taxation expense recognised in the income statement | 60 473 | 61 2,094 | 0 4,721 | |||
Change in inventories | (1,518) | (582) | 1,103 | |||
Change in trade and other receivables | (1,277) | (633) | 1,050 | |||
Change in trade and other payables | 1,964 | 5,093 | (1,224) | |||
Change in provisions | 7,794 | (13) | 1,971 |
Change in pension obligations 0 0 (600)
7,574 6,072 7,198 Cash generated from operating activities 9,135 12,982 21,307Tax paid (1,640) (2,052) (4,765)
Net cash generated from operating activities 7,495 10,930 16,542 Cash flows from investing activitiesFinance income 151 205 316
Proceeds from sale of property, plant and
equipment 10 10 148
Acquisition of property, plant and equipment (3,724) (371) (692) Acquisition of subsidiary, net of cash acquired (87) 0 0
Acquisition of business trade and assets (335) 0 0
Net cash used in investing activities (3,985) (156) (228) Cash flows from financing activitiesDisposal of own shares 0 0 (127)
Dividends paid (4,900) (4,311) (6,639)
Net cash used in financing activities (4,900) (4,311) (6,766) Net (decrease)/increase in cash and cash equivalents (1,390) 6,463 9,548Cash and cash equivalents at beginning of period 34,293 24,745 24,745
Cash and cash equivalents at end of period 32,903 31,208 34,2937
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 2013, 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 2013. 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.
The interim dividend of 7.10p (2013: 6.32p) will be paid on 29 August 2014 to shareholders registered on 1 August 2014. The ex dividend date is 30 July 2014.
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 2014 of 36,843,875 (six months to 30 June 2013 of
36,826,580 and 12 months to 31 December 2013 of 36,834,655).
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.
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