TIDMNICL
RNS Number : 3064G
Nichols PLC
01 March 2018
Date: Embargoed until 0700 Thursday 1 March 2018
Contacts: John Nichols, Non-Executive Chairman
Marnie Millard, Group Chief Executive Officer
Tim Croston, Group Chief Finance Officer
Andrew Milne, Group Commercial Director
Nichols plc
Telephone: 01925 222 222
Website: www.nicholsplc.co.uk
Alex Brennan/ Hattie O'Reilly Richard Lindley
Hudson Sandler N+1 Singer (Nominated
Adviser)
Telephone: 020 7796 4133 Telephone: 0207 496 3000
Email: nichols@hudsonsandler.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
2017 (the 'period').
Nichols plc is an international soft drinks business with sales
in over 85 countries, selling products in both the Still and
Carbonate categories. The Group is home to the iconic Vimto brand
which is popular in the UK and around the world, particularly in
the Middle East and Africa. Other brands in its portfolio include
Feel Good, Starslush, ICEE, Levi Roots and Sunkist.
Financial Highlights:
*EBITDA is the statutory Year ended Year ended % movement
profit before tax, 31 Dec 31 Dec
interest, depreciation 2017 2016
and amortisation
----------------------------- ----------- ----------- -----------
GBPm GBPm
----------------------------- ----------- ----------- -----------
Group Revenue 132.8 117.3 +13.2%
----------------------------- ----------- ----------- -----------
Operating Profit 28.7 30.3 -5.3%
----------------------------- ----------- ----------- -----------
Operating Profit
margin 22% 26%
----------------------------- ----------- ----------- -----------
Operating Profit
pre-exceptional items 30.5 30.3 +0.7%
----------------------------- ----------- ----------- -----------
Operating Profit
margin pre-exceptional
items 23% 26%
----------------------------- ----------- ----------- -----------
EBITDA* 31.7 31.4 +0.9%
----------------------------- ----------- ----------- -----------
Profit Before Tax
pre-exceptional items 30.5 30.4 +0.4%
----------------------------- ----------- ----------- -----------
PBT margin pre-exceptional
items 23% 26%
----------------------------- ----------- ----------- -----------
EPS (basic) pre-exceptional
items 67.76p 66.18p +2.4%
----------------------------- ----------- ----------- -----------
Final dividend 23.4p 20.3p +15.3%
----------------------------- ----------- ----------- -----------
John Nichols, Non-Executive Chairman, said:
"In 2017 we delivered strong double-digit sales growth across
both the UK and international businesses, even though the market
conditions have been challenging. Profits were maintained despite
previously announced external challenges in the Yemen region and we
are proposing to increase the final dividend by 15.3%.
The Group expects to deliver further progress in 2018, supported
by the advantages of our diversified business model and the
strength of our brands."
Chairman's Statement
The Group has delivered a strong revenue performance throughout
2017, with both the UK and international businesses contributing to
a double-digit increase compared to the prior year.
Despite industry wide cost input increases and the challenges in
Yemen as reported in our Trading Update on 19 December 2017, profit
pre-exceptional items has been maintained at the same level as the
prior year and the Board has recommended a 15.3% increase in the
final dividend.
Trading
Total Group revenue for 2017 has increased by 13.2% to GBP132.8m
(12.2% on a constant exchange rate basis). This has been delivered
across the Group in both our UK and international businesses
highlighting the advantages of our diversified business model.
UK sales totalled GBP100.8m, an increase of 11.0%, which is a
strong performance given ongoing challenges in the UK market. Once
again, the Vimto brand has significantly outperformed the market
with sales in 2017 up by 9.0% compared to the overall UK soft
drinks market which was up by 2.2% in the same period (Nielsen year
to 30 December 2017). Elsewhere in the UK, our Out of Home business
increased its sales by 21.5% compared to the prior year. This was
delivered from both our dispensed soft drinks and frozen beverages
product ranges and demonstrates the benefits of recent acquisitions
in this part of our business.
Sales to our international customers grew by 20.4% to GBP32.0m
(2016: GBP26.6m). Revenues to Africa were GBP12.7m, an increase of
21.2% compared to 2016. Despite the reported challenges in Yemen,
revenues to the Middle East region were up 13.4%, although this was
in the context of softer comparatives in the prior year (2016:
-7%).
Whilst the Group remains highly profitable with Group Profit
Before Tax and exceptional items delivering a 23% return on sales
(2016: 26%), the margin has been impacted by increased input costs
affecting the wider industry. In addition to the margin dilution
and as reported in our Trading Update on 19 December 2017, the
escalation in hostilities in Yemen prevented the planned shipments
of Vimto concentrate in December. As a result, Group Profit Before
Tax and exceptional items of GBP30.5m was broadly in line with the
prior year (2016: GBP30.4m).
Exceptional Items
The Group incurred a number of costs during 2017 which by their
nature were non-recurring and have been reported as exceptional
items. These costs fell into three categories: merger and
acquisition expenses, restructuring costs and costs incurred in
preparation for the introduction of the Soft Drinks Industry Levy.
The total cost of these exceptional items was GBP1.8m.
Dividend
As a reflection of the Board's confidence in the Group's
financial position and future growth prospects, we are pleased to
recommend a final dividend of 23.4 pence per share (2016: 20.3
pence).
If accepted by our shareholders, the total dividend for 2017
will be 33.5 pence (2016: 29.3 pence), an increase of 14.3% on the
prior year. Subject to shareholder approval, the final dividend
will be paid on 4 May 2018 to shareholders registered on 23 March
2018; the ex-dividend date is 22 March 2018.
Outlook
In 2018, we expect to maintain the positive sales trend in the
UK with the Vimto brand being supported by a new marketing campaign
launching in the spring. In addition, we are well prepared for the
introduction of the Sugar Levy with 100% of the Vimto and Feel Good
brands portfolio already exempt from the levy.
In our international business, we are confident of continued
sales growth in Africa, however, the current conflict in the Yemen
coupled with a slowdown in the Saudi economy, suggests that sales
to the Middle East region will soften in 2018.
In summary, the Group remains highly profitable and our
diversified business model, strong balance sheet, and the
resilience of the Vimto brand will continue to support the expected
sales growth in 2018.
John Nichols
Non-Executive Chairman
28 February 2018
Chief Executive Officer's Report
I am pleased to report Group sales grew by 13.2% despite the
global soft drinks market remaining challenging. The strength of
the Vimto brand, our geographical reach and continued focus on
driving "value over volume" delivered an excellent sales
performance across the Group. All of our routes to market have
performed well and it's particularly rewarding to see the
diversified business model contributing so positively to the
overall growth of our business.
We are proud of the heritage of our brand and proud of all the
partners we work with across the globe. Some overseas core markets
have proved challenging during 2017, but the resilience of the
brand and the love our consumers have for Vimto, ensures we
continue to perform strongly in these geographies.
The acquisition of one of our distributors, DJ Drink Solutions
Limited, was made in 2017 to further strengthen our Out of Home
presence in the North of England.
The Soft Drinks Industry Levy will be introduced into the UK in
April 2018 and I am delighted to report we are already 100% levy
free across the Vimto and Feel Good brands portfolio. All Vimto
reformulation work was completed and introduced into the market
during the second half of 2017. Our no added sugar Vimto sales grew
by 20% in 2017 and I am extremely pleased with the position of our
product portfolio ahead of the implementation of the levy.
The UK Soft Drinks Market
(As measured by Nielsen year to date 30 December 2017)
In 2017, volumes in the UK soft drinks market were flat at 0.2%.
Value sales were slightly higher but still only showing modest
growth of 2.2%, with the overall market totalling GBP7.8
billion.
Within the soft drinks market, value growth was seen across
mixers, colas, plain and flavoured waters and fruit carbonates.
Energy drinks, dilutables, fruit drinks and sports drinks were all
sectors in decline.
Vimto has added an impressive GBP3.5m to its brand value
(Nielsen data) in twelve months and is now worth GBP76m, an
increase of 5%. This metric is important to us as the UK soft
drinks market remains highly competitive and promotionally driven,
but we continue with our focus of adding value to the brand through
our focus on driving "value over volume" and to the sector as a
whole. The category remains highly competitive and promotionally
driven but we continue with our focus of adding value to the
sector. Our product innovation, under the sub brand Remix has added
GBP6.3m to the retail sales brand value in less than 3 years. In
both the dilutable and ready to drink categories, Vimto has
significantly outperformed the market. Vimto dilutes grew by 9.0%
versus a market decline of 3.6%, whilst Vimto ready to drink has
outperformed the market by 7.2 percentage points.
The UK on-Trade
(As measured by CGA, Total Licensed, Total Soft Drinks, last 12
months to 4 November 2017)
The UK on-trade soft drinks sector saw a dip in consumption as
volume has decreased by 1.6% and value sales also decreased by
1.3%, as consumers remain cautious with spending.
All categories, including beers, wines & spirits, are
experiencing a challenging time, potentially related to the drop in
frequency in total eating out as consumers tighten their belts
during these uncertain economic times.
Category performance has also been affected by the number of
licensed outlets in the UK declining 1%. This is across Free Trade
and Leased & Tenanted as the market remains a challenging
place.
Operational Review
Vimto UK
Vimto achieved an impressive sales increase of 9.0% during 2017,
with both original and Remix contributing to that market leading
performance. Driven through all market channels and across all pack
formats, dilute and ready to drink achieved double digit growth at
10% and 11% respectively.
It is more important than ever for brands to remain relevant and
top of mind for consumers. The UK market is fiercely competitive,
with unprecedented changes taking place in the retail space. Our
customers are continually looking for winning brands and are taking
tough decisions to ensure they are fit for the future. Therefore,
with this backdrop it is particularly pleasing to see Vimto
succeeding in these difficult times.
Pink Remix 500ml ready to drink was launched in 2017 and
delivered a 13% increase in sales on our Remix brand in the Cash
& Carry sector. Our launch of drink now water in the form of
Vim2o helped to improve our Convenience business by 12% and we
achieved 4,000 new distribution points for our Vimto 500ml range
within the M25 as part of our Go South extended trial.
Our marketing campaign for 2017 continued to feature our very
own successful Vimtoad alongside the Remixed toad. However, I am
sad to report this is the last you will see of the Vimtoad as he
prepares for retirement. We have appointed a new creative agency
and have developed new brand positioning which will be launched in
spring 2018.
Feel Good was relaunched in 2017 with new packaging design, new
and improved flavours as well as launching Feel Good Infusions,
which allowed the brand to enter the water category.
The launch was announced with 100 women taking part in a Skinny
Dip to celebrate the strapline "100% natural and 100% Feel Good".
The subsequent digital advert reached 2.4 million of our target
"Health Conscious Urbanites", the outdoor advertising seen by 2.5
million people and the radio campaign attracted 2.5 million
listeners. As a result of this good work, I am pleased to report
Feel Good now has a brand value of GBP3.2m.
Vimto International
International revenue, despite some extraordinary trading
challenges was up 20.4%.
Africa delivered an outstanding performance with growth of 21.2%
(14.1% on a constant exchange rate basis), with three new countries
coming on stream in 2017: Mauritania, Benin and Uganda. Core
markets in this geographical region continued to perform well with
in market sales up by 21%.
We launched a new 250ml Vimto can, which was initially sold into
Guinea in order to celebrate, with Vimto, at large family
gatherings. Pleasingly, this has not detracted sales from the
original 330ml can, but created a new drinking occasion for
Vimto.
Following our hugely successful launch into Sudan in 2016, we
introduced Vimto ready to drink in a carton, which has already
resulted in 2.3m units being consumed in market. The rollout of
Vimto Ginger and Vimto Malt continued into 2017 and will be joined
by Vimto Watermelon in 2018.
The relationship with our partner Aujan Coca Cola Bottling
Company in the Middle East is over 90 years old and again in 2017
they delivered a truly impressive 360-degree marketing campaign,
which included new creative content for Ramadan delivered across
all forms of media. Their TV campaign reached 96% of their target
audience, in store displays were as magnificent as previous years,
with the star of the show being a 6 metre tall replica of Big Ben
and their digital content achieved collectively over 220 million
impressions.
Despite the challenging macro-economic environment in the
region, which saw the introduction of a "bubble tax" at the end of
2017, our sales to the Middle East were up 13.4%. The tax has been
applied to carbonated soft drinks and energy drinks at a level of
50% and 100% respectively. Our first new flavour development, Vimto
strawberry, was launched into the region and our Vimto 250ml still
ready to drink targeted at children was the star performer of the
portfolio.
2017 saw the launch of Vimto slush into the region in the United
Arab Emirates and the Kingdom of Saudi Arabia. So far, the results
have been encouraging and we look forward to installing additional
machines during 2018.
Our long standing partner in Yemen has experienced many
operational challenges during 2017 due to the hostilities in his
country and this situation remains unchanged. Unfortunately, this
did impact our Group Profit, as we were unable to ship concentrate
as we had planned in December.
Vimto Out of Home
Vimto Out of Home delivered a second year of good organic sales
growth of 11.0%. Including the DJ Drink Solutions Limited (DJ)
acquisition, who were our largest distributor based in the North of
England, overall sales were up 21.5%.
I am very pleased with the performance of our Distributor
network in this sales channel and would like to thank them for
their continued hard work and support. Our overall market share of
cola dispense grew in 2017, with sales of no added sugar cola
accelerating as we start to see consumer tastes change in the on
trade.
The Starslush brand performed well in 2017 with increased sales
of 7%, driven by some great new business wins such as Tayto Park in
Ireland and Flamingo Land in Yorkshire. In addition we introduced
our first ever new flavour under the Starslush brand for Halloween,
a blood orange variant, which delivered good incremental
volume.
In line with all our UK packaged products, all our frozen
beverage brands will be sugar levy ready by April and we have made
absolutely sure they have kept their original great taste. In 2017,
we embarked on a new long-term relationship with the great American
ICEE brand which is famous for its frozen carbonated beverage. ICEE
in the USA already works in partnership with many of the great
brands we have in our Out of Home product range. We look forward to
developing that partnership over the coming years, as frozen
carbonated beverages are particularly strong in the cinema chains
in both the UK and Europe.
Corporate Responsibility
The Soft Drinks Industry Levy will be introduced in April 2018.
Before this legislation was introduced, we had been working for
many years on the following:
-- Reducing sugar in our product portfolio
-- All new product development for the last 5 years has focused on no added sugar
-- All our advertising has featured our no added sugar ranges
As a result:
-- 100% of our own brands are exempt from the Soft Drinks Industry Levy
-- We have removed 2,000 tonnes of sugar since 2011
-- We have reduced 9.5 billion calories from our products
-- By 2020 we will have taken more than 20% of calories out of our drinks
Our Community
We continued to support Warrington Youth Club in 2017.
Warrington Youth Club believes in "inspiring young people to
achieve" and supports young people's development by offering
opportunities to increase and develop skills, self-awareness and
confidence. In support of this work, Nichols plc ran a "dragons
den" workshop as part of the national NCS programme and over six
weeks, twenty young people took part in this initiative. They were
given a real business issue for which they had to find a solution
and then pitch their proposal to a panel of Vimto dragons. The
successful all-girl winning team were then taken to the House of
Lords for the day accompanied by Baroness Helen Newlove. Thanks
also goes to all our partners, suppliers and friends who joined us
at our annual golf day and attended our Moonlight gala dinner where
we raised over GBP30,000 for the Youth Club.
Our People
I would like to take this opportunity to thank each and every
member of our work family. It has been a challenging year with many
changes taking place within the business. Many individuals have
taken on additional tasks to their day job and they have tackled
that with the "vim and vigour" I see day in and day out in the
organisation. A very big thank you to you all!
We conducted our second employee engagement survey at the
beginning of 2017. 88% of our colleagues responded to our survey
and we achieved an engagement score of 95% which was very pleasing.
99% of our respondents are proud to work at Vimto, with 93% feeling
they have an opportunity to work and grow with us.
Our Vision
We continue to develop our rolling long-term strategy built up
on our four key pillars:
More from the Core
We will build upon the success we have achieved for Vimto in
2017. We remain focussed on value driving activity and look forward
to the new exciting creative campaign to be released in 2018. There
is significant headroom for growth for both Vimto and Feel Good
both in the UK and overseas.
Thirst for New
As we have proven with Remix, product innovation is key to
attracting new consumers into our brands. It remains a key part of
our growth strategy along with appropriate acquisitions.
Healthier Future
Our entry into the water category with Vim2o and Feel Good
Infusions are indicative of our determination to have natural
healthier soft drinks within our product portfolio. We will
continue to work on our product formulations in order to ensure we
meet the changing tastes of our consumers, which include taking
into account their desire for less sugar both home and abroad.
Wherever Whenever
With our diversified portfolio and our flexible outsourced
global production model, we are able to meet the ever changing
needs of our consumers. Geographic expansion for both the UK and
international remains a high priority for the business.
Outlook
Vimto will be a magnificent 110 years old in 2018 and its brand
performance in 2017 is as strong as ever. We are facing
unprecedented change in our market environment, not just in the UK
but internationally. Consumers' tastes, beliefs and habits are all
contributing to different choices being made and we believe with
continued investment in our brands and our people, we are well
placed to meet these challenging times. Our diversified model has
and will continue to serve us well and we remain committed to
acquisition of the right brand and or the right business.
Marnie Millard
Chief Executive Officer
28 February 2018
Chief Financial Officer's Report
Reflecting on 2017, the Group has delivered a solid performance.
Double digit revenue growth was achieved in both our UK and
international businesses, in addition, the Group remains very
profitable and is underpinned by a strong balance sheet.
This is despite the headwinds of challenges in the UK trading
environment and an escalation of hostilities in one of our Middle
Eastern territories.
Income Statement
Group revenue increased by 13.2% to GBP132.8m (2016:
GBP117.3m).
Business 2017 2016 Year on year growth
segments GBPm GBPm GBPm %
revenue
----------- ------ ------ ----------------------
Still 64.1 59.5 4.6 7.7%
----------- ------ ------ ---------- ----------
Carbonate 68.7 57.8 10.9 18.9%
----------- ------ ------ ---------- ----------
Total 132.8 117.3 15.5 13.2%
----------- ------ ------ ---------- ----------
Whilst both business segments contributed to the sales growth,
the majority of the increase came from Carbonates. This excellent
performance was driven by the growth in Africa, where the vast
majority of sales are Carbonate and the increase in Out of Home
sales in the UK.
UK sales
UK revenues increased by 11.0% to GBP100.8m which represents 76%
of Group income.
This was a very strong performance within a challenging trading
environment. The UK market dynamics are evolving at a rapid pace,
although overall growth is minimal, the rising trend for
convenience shopping and the increasing influence of the
discounters means that suppliers need to be agile and responsive to
change.
Against that backdrop, I am delighted to report that Vimto brand
sales grew by 9.0% in the year which compares to an overall market
growth of 2.2% growth (Nielsen MAT to 30 December 2017). Once
again, the Vimto brand has gained market share, the growth was
driven by sales within the Still segment across the multiples and
discounters.
Elsewhere in our UK business, sales within our Out of Home
business totalled GBP38.9m, a 21.5% increase on the prior year.
Growth on a like for like basis excluding the acquisition of DJ
(acquired 2 June 2017) was 7.3%.
International sales
Sales in our international business grew by 20.4% (15.9% on a
constant exchange rate basis) to GBP32.0m.
It is pleasing to report that revenue from the USA and central
Europe increased by 37% compared to the prior year, growing our
international footprint beyond the core markets of Africa and the
Middle East. These regions now represent c20% of our international
revenues.
The strong momentum in Africa was maintained in 2017 with sales
up 21.2% on the prior year (14.1% on a constant exchange rate
basis). This result is all the more impressive as the 2016
comparatives delivered 19.7% year on year growth. The 2017 increase
came from both core and new markets in the region.
In our pre-Christmas Trading Update (19 December 2017) we
reported that an escalation of hostilities in Yemen had prevented
the shipments of Vimto concentrate planned for December 2017. At
the time of writing, the situation in Yemen remains unchanged,
therefore we are uncertain as to the timing at which we will be
able to resume shipments to our Yemeni customer. Despite this
unfortunate situation, which is clearly something that management
cannot control, sales to the Middle East region in 2017 increased
by 13.4% (12.1% on a constant exchange rate basis). However, this
performance should be considered in combination with the 2016
reported sales to the Middle East which were 7.0% down on the prior
year. As previously explained, reported Middle East sales are
sensitive to timing around the Group's year end as the shipment
date is driven by the supply chain requirements ahead of the
following year's Ramadan period.
Gross Profit
Gross Profit for the year was GBP60.6m, 2.6% above the prior
year (2016: GBP59.1m).
The Group remains highly profitable with a Gross Margin of 45.6%
(2016: 50.4%). As expected and consistent with many UK businesses,
weaker sterling post the Brexit vote had an adverse effect on our
input costs in 2017, which has diluted our margins during the
year.
Distribution Expenses
The majority of our distribution expenses relate to our UK
business. The total cost in 2017 of GBP5.9m represents a 5.3%
saving compared to the prior year (2016: GBP6.3m) and equates to
4.5% of sales (2016: 5.3%). The savings have been achieved from a
number of cost efficiency projects.
Administrative expenses
Pre-exceptional overheads in 2017 totalled GBP24.1m which is an
increase of GBP1.6m compared to the prior year. Of this increase,
the majority is the incremental overheads associated with DJ, which
was acquired during the year.
Operating Profit
As indicated in the Group's pre-Christmas Trading Update,
pre-exceptional Operating Profit of GBP30.5m is marginally ahead of
the prior year.
EBITDA
Given the acquisitive nature of the Group, the directors have
started to utilise EBITDA as a key performance indicator. EBITDA is
defined as profit before interest, tax, depreciation and
amortisation and is similarly marginally ahead of the prior year at
GBP31.7m (2016: GBP31.4m).
Profit Before Tax and Exceptional Items
Profit Before Tax (PBT) and exceptional items totalled GBP30.5m
and is in line with the prior year, it should be noted that the
Group remains highly profitable with a 23.0% return on sales (2016:
26.0%). The decline in PBT margin is principally as a result of
increased input costs noted above. Nevertheless, the Group has
delivered compound annual PBT growth of 8% over the last five
years.
Exceptional items
Exceptional costs during 2017 totalled GBP1.8m and were made up
of:
-- Merger & Acquisition costs (GBP0.3m)
-- Restructuring costs (GBP1.3m)
-- Preparations for the introduction of the Soft Drinks Industry Levy (GBP0.2m)
Cash
The Group continues to be very cash generative in relation to
its operating activities and had a year-end cash balance of
GBP36.1m (2016: GBP39.8m).
Management aim to leverage the strong cash position to reinvest
in the long-term growth strategy for the Group. During 2017,
GBP6.6m of cash was used to acquire DJ to enhance our growing Out
of Home business. DJ was the largest of our Out of Home
distributors, covering the North West, North East and North Wales
regions. This acquisition consolidates the Group's route to market
in the regions and is consistent with our successful business model
already operating in other UK regions.
A further GBP1.2m was invested in our Ross on Wye manufacturing
facility. This expenditure completes a long-term project that has
seen a significant expansion of the factory as well as investment
in state of the art robotic and automated machinery capable of much
greater volume and efficiency than the Out of Home division has
previously been capable of. During the year, a special pension
contribution of GBP1.9m was made, which allowed the pension scheme
to acquire the adjoining property to that occupied by Nichols plc
in Newton-le-Willows. This property purchase safeguards our plans
for future growth and expansion.
Tim Croston
Chief Financial Officer
28 February 2018
Consolidated income statement
Year ended 31 December 2017
2017 2016
Before Exceptional Total Before Exceptional Total
exceptional items exceptional items
items items
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 132,789 - 132,789 117,349 - 117,349
Cost of sales (72,166) - (72,166) (58,234) - (58,234)
--------------------- ------------- ------------ --------- ------------- ------------ ---------
Gross profit 60,623 - 60,623 59,115 - 59,115
Distribution
expenses (5.938) - (5,938) (6,271) - (6,271)
Administrative
expenses (24,142) (1,801) (25,943) (22,519) - (22,519)
--------------------- ------------- ------------ --------- ------------- ------------ ---------
Operating profit 30,543 (1,801) 28,742 30,325 - 30,325
Finance income 134 - 134 214 1,087 1,301
Finance expense (154) - (154) (134) - (134)
Profit before
taxation 30,523 (1,801) 28,722 30,405 1,087 31,492
Taxation (5,548) - (5,548) (6,015) - (6,015)
--------------------- ------------- ------------ --------- ------------- ------------ ---------
Profit for the
financial year
attributable
to equity holders
of the parent 24,975 (1,801) 23,174 24,390 1,087 25,477
Earnings per share (basic) 62.88p 69.13p
Earnings per share (diluted) 62.81p 69.07p
Earnings per share (basic)
- before exceptional items 67.76p 66.18p
Earnings per share (diluted)
- before exceptional items 67.69p 66.12p
All results relate to continuing
operations.
Consolidated statement of comprehensive income
Year ended 31 December 2017
2017 2016
GBP'000 GBP'000
Profit for the financial
year 23,174 25,477
Other comprehensive income/
(expense) that will not
be reclassified to profit
or loss
Re-measurement of net
defined benefit liability 1,140 (3,472)
Deferred taxation on pension
obligations and employee
benefits (113) 601
Other comprehensive income/
(expense) for the year 1,027 (2,871)
Total comprehensive income
for the year 24,201 22,606
Statement of financial position
Year ended 31 December 2017
Group Parent
2017 2016 2017 2016
ASSETS GBP'000 GBP'000 GBP'000 GBP'000
Non-current assets
Property, plant and equipment 12,059 8,715 4,145 3,970
Goodwill 30,666 23,061 2,504 2,504
Investments - - 16,566 16,566
Intangibles 7,993 6,084 1,316 1,316
Deferred tax assets 1,065 1,436 1,065 1,436
-------------------------------- -------- -------- -------- --------
Total non-current assets 51,783 39,296 25,596 25,792
Current assets
Inventories 4,815 6,717 2,342 3,914
Trade and other receivables 34,740 31,508 31,742 25,020
Cash and cash equivalents 36,058 39,754 15,422 25,768
-------------------------------- -------- -------- -------- --------
Total current assets 75,613 77,979 49,506 54,702
-------------------------------- -------- -------- -------- --------
Total assets 127,396 117,275 75,102 80,494
-------------------------------- -------- -------- -------- --------
LIABILITIES
Current liabilities
Trade and other payables 21,031 21,456 14,955 21,008
Current tax liabilities 2,536 2,355 232 357
Total current liabilities 23,567 23,811 15,187 21,365
Non-current liabilities
Pension obligations and
employee benefits 2,921 6,395 2,921 6,395
Deferred tax liabilities 1,586 1,101 - -
Total non-current liabilities 4,507 7,496 2,921 6,395
Total liabilities 28,074 31,307 18,108 27,760
-------------------------------- -------- -------- -------- --------
Net assets 99,322 85,968 56,994 52,734
-------------------------------- -------- -------- -------- --------
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 134 (358) 909 417
Retained earnings 91,027 78,165 47,924 44,156
Total equity 99,322 85,968 56,994 52,734
-------------------------------- -------- -------- -------- --------
Consolidated statement of cash flows
Year ended 31 December 2017
2017 2016
GBP'000 GBP'000 GBP'000 GBP'000
Cash flows from operating
activities
Profit for the financial
year 23,174 25,477
Adjustments for:
Depreciation and amortisation 1,175 1,111
Loss/ (profit) on sale of
property, plant and equipment 40 (6)
Finance income - non-exceptional (134) (214)
Finance expense 154 134
Finance income - exceptional
gain - (1,087)
Tax expense recognised in
the income statement 5,548 6,015
Change in inventories 1,878 (2,382)
Change in trade and other
receivables (4,675) (3,036)
Change in trade and other
payables (1,810) 1,229
Change in pension obligations (2,334) (970)
(158) 794
Cash generated from operating
activities 23,016 26,271
Tax paid (5,274) (6,116)
--------- --------
Net cash generated from operating
activities 17,742 20,155
Cash flows from investing
activities
Finance income 134 214
Proceeds from sale of property,
plant and equipment 4 17
Acquisition of property,
plant and equipment (3,795) (2,442)
Acquisition of subsidiary (6,568) (3,715)
Net cash used in investing
activities (10,225) (5,926)
Cash flows from financing
activities
Share options exercised - (107)
Dividends paid (11,213) (9,806)
----------------------------------- --------- --------- -------- --------
Net cash used in financing
activities (11,213) (9,913)
Net (decrease)/ increase
in cash and cash equivalents (3,696) 4,316
Cash and cash equivalents
at 1 January 39,754 35,438
----------------------------------- --------- --------- -------- --------
Cash and cash equivalents
at 31 December 36,058 39,754
----------------------------------- --------- --------- -------- --------
Consolidated statement of changes in equity
Year ended 31 December 2017
Called Share Capital Other Retained Total
up share premium redemption reserves earnings equity
capital reserve reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 2016 3,697 3,255 1,209 (547) 65,397 73,011
Dividends - - - - (9,806) (9,806)
Movement in ESOT - - - 189 (32) 157
Transactions with
owners - - - 189 (9,838) (9,649)
----------------------- ---------- --------- ------------ ---------- ---------- ---------
Profit for the
year - - - - 25,477 25,477
Other comprehensive
expense - - - - (2,871) (2,871)
----------------------- ---------- --------- ------------ ---------- ---------- ---------
Total comprehensive
income - - - - 22,606 22,606
----------------------- ---------- --------- ------------ ---------- ---------- ---------
At 1 January 2017 3,697 3,255 1,209 (358) 78,165 85,968
Dividends - - - - (11,213) (11,213)
Movement in ESOT - - - 192 (126) 66
Credit to equity
for equity-settled
share based payments - - - 300 - 300
Transactions with
owners - - - 492 (11,339) (10,847)
----------------------- ---------- --------- ------------ ---------- ---------- ---------
Profit for the
year - - - - 23,174 23,174
Other comprehensive
income - - - - 1,027 1,027
----------------------- ---------- --------- ------------ ---------- ---------- ---------
Total comprehensive
income - - - - 24,201 24,201
----------------------- ---------- --------- ------------ ---------- ---------- ---------
At 31 December
2017 3,697 3,255 1,209 134 91,027 99,322
----------------------- ---------- --------- ------------ ---------- ---------- ---------
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 2017
and 31 December 2016, but has been derived from those accounts. The
accounting policies used in preparation of this preliminary
announcement have remained unchanged from those set out in the 2016
annual report. Statutory accounts for 2016 have been delivered to
the Registrar of Companies and those for the financial year ended
31 December 2017 will be delivered following the Company's Annual
General Meeting. The auditors have reported on those accounts and
their reports were unqualified, did not draw attention to any
matters by way of emphasis, and did not contain a statement under
498(2) or 498(3) of the Companies Act 2006.
Exceptional costs
The Group incurred a number of costs during 2017, which by their
nature were non-recurring and have been reported as exceptional
items within administrative expenses. These costs fall into three
categories: merger and acquisition expenses (GBP0.3m),
restructuring costs which represent redundancies as well as costs
incurred in respect of the exit from an operating site in the Out
of Home division (GBP1.3m) and costs incurred in preparation for
the introduction of the Soft Drinks Industry Levy (GBP0.2m).
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 62.88 pence (2016: 69.13 pence).
Basic earnings per share (pre-exceptional items) is 67.76 pence
(2016: 66.18 pence).
Segmental information
The Board analyses the Group's internal reports to enable an
assessment of performance and allocation of resources. The
operating segments are based on these reports.
The Board considers the business from a product perspective and
reviews the Group on the operating segments identified below. There
has been no change to the segments during the year. Based on the
nature of the products sold by the Group, the types of customers
and methods of distribution management consider reporting operating
segments at the Still and Carbonate level to be reasonable. Gross
profit is the measure used to assess the performance of each
operating segment as identified as a KPI in the Chief Financial
Officer's Report.
Revenue Gross Profit
2017 2016 2017 2016
GBP'000 GBP'000 GBP'000 GBP'000
Still 64,139 59,523 35,168 34,702
Carbonate 68,650 57,826 25,455 24,413
Total 132,789 117,349 60,623 59,115
There are no sales between the two operating segments, and all
revenue is earned from external customers.
The operating segments gross profit is reconciled to profit
before taxation as per the consolidated income statement.
The Group's assets are managed centrally by the Board and
consequently there is no reconciliation between the Group's assets
per the statement of financial position and the segment assets.
Annual report
The annual report will be mailed to shareholders and made
available on our website on or around 30 March 2018. 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 Nichols plc, Laurel
House, Woodlands Park, Ashton Road, Newton-le-Willows, WA12 0HH on
Wednesday 25 April 2018 at 11.00am.
Copies of the announcement can be found on the Investors
Relations section of the Company's website:
www.nicholsplc.co.uk.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR TPMRTMBJTBFP
(END) Dow Jones Newswires
March 01, 2018 02:00 ET (07:00 GMT)
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