Vimto owner Nichols plc wants more international growth

Vimto owner Nichols plc is eyeing more international growth after enjoying a “strong” year as the cost of living crisis eased.

The soft drinks group, founded in Manchester by the Nichols family and today based in Newton-le-Willows, said in a trading update for 2024 that it had seen more “positive momentum” in the second half of the year. That means it expects its revenue and adjusted pre-tax profit figures to be in line with market expectations. Nichols said group revenue rose by 0.8% to £172.1m during the year.

Its Packaged business, which makes Vimto cans, bottles and squash as well as Levi Roots-branded bottled drinks, saw full year sales rise 3.8%, with UK sales performing particularly strongly with a 5.4% uplift “largely driven by innovation and distribution gains”.

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Vimto has a huge international reach and is particularly popular in cordial form in the Middle East during Ramadan. Nichols said full year revenues were in line with 2023 “despite the shift to a lower revenue but margin enhancing concentrate model across several African markets”.

It added: “The group continues to derive considerable benefit from its diversified business model, with an established UK position complemented by the significant growth opportunities within the International business. Within the Packaged business, the Group continues its strategy of investing in extending the product range and in the development of its international markets, both of which are expected to continue to provide growth over the medium-term.

Nichols’ Out of Home (OoH) division, which supplies soft drinks to venues such as pubs, cinemas and theme parks, saw revenues fall 8.2% “following exits from unprofitable accounts”.

Nichols said its margins had continued to improve as UK inflationary pressures, which sparked the cost-of-living crisis, eased. It said: “This stability has enabled increased investment in the long-term strategic development of the group.”

And it added: “Whilst inflationary pressures now appear to be moderating in the UK, the board remains mindful of continued uncertainty affecting some of the Group’s markets and necessary mitigating actions are in place.”

Andrew Milne, chief executive officer at Nichols, said: "I’m pleased to report Nichols delivered a strong performance in FY24, with good progress made against our strategic plan and towards our medium-term financial ambitions.

"Our strategy will drive a high-margin, highly cash-generative, diversified business, built on the unique strength of the Vimto brand. Looking ahead, we remain focused on continuing to execute our strategic plans and driving further progress against our medium-term ambitions."

John Noel Nichols invented Vimto in Manchester in 1908. His grandson John Nichols is still on Nichols plc's board of directors. Last year his son Matthew Nichols, already Commercial Director – International in the group’s packaged drinks business, joined him on the board.

This morning, analysts Andrew Ford and Charles Hall from Peel Hunt noted the group’s “strong margin performance” and added: “The outlook remains encouraging, with inflationary pressures abating and significant growth opportunities within the International business.”

Meanwhile Sahill Shan from Singer Capital Markets hailed “Another strong showing from the dominant UK packaged business and good execution of the international growth strategy”.

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