Nichols PLC 2017 Trading Update (7064Z)

TIDMNICL

RNS Number : 7064Z

Nichols PLC

19 December 2017

 
 Date:       Embargoed until 07.00 Tuesday 19 December 
              2017 
 Contacts:   John Nichols, Non-Executive Chairman 
             Marnie Millard, Group Chief Executive Officer 
              Tim Croston, Group Chief Financial Officer 
              Andrew Milne, Group Commercial Director 
             Nichols plc 
             Telephone: [phone] 
             Website:www.nicholsplc.co.uk 
 
             Nick Lyon/Hattie          Richard Lindley 
              O'Reilly 
             Hudson Sandler            N+1 Singer (Nominated Adviser) 
             Telephone:[phone]        Telephone: [phone] 
              4133 
             Email: [e-mail]   Website: www.n1singer.com 
 

Nichols plc

2017 Trading Update

Nichols plc ("the Group"), today issues the following trading update for the year ending 31 December 2017.

We anticipate Group sales for the year ending 31 December 2017 to continue the strong trend reported at the half year. This sales performance is again being delivered from both our UK and international business.

UK sales of the Vimto brand are 9.0% ahead of the prior year (as at November 2017). This performance is significantly ahead of the UK market growth of 2.3% (Nielsen year to date 2 December 2017). As previously reported, this strong sales performance helps mitigate the margin impact from the increased input costs affecting the industry.

Internationally, our business in Africa has again delivered an excellent performance with full year revenues anticipated to be in excess of 20% ahead of the strong prior year comparatives.

Whilst 2017 sales are still expected to be ahead of the prior year, the recent escalation of hostilities in Yemen has resulted in the supply route to our Yemeni customer being blockaded. Therefore, at this time we are unable to send any further Vimto concentrate shipments that were planned for December 2017. As a consequence, management currently expects adjusted Group Profit Before Tax for the year ending 31 December 2017 to be in line with the prior year.

Outlook

For the year ahead, we are confident that the strong sales trend will continue 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 below the levy threshold.

In our international business, we anticipate the strong growth trend in Africa to continue in 2018. However, the current conflict in the Yemen coupled with some reported slowing in the Saudi economy indicates that sales to the Middle East region in the year ahead are likely to be less than previously anticipated. As a result, management currently expects low single digit percentage profit growth in 2018 in comparison to the current year.

In summary, our diversified business model is expected to deliver continued sales growth into 2018 and the Group remains highly profitable. In addition, our strong balance sheet and cash generation supports ongoing investment in our growth strategy and our ability to sustain a progressive dividend policy.

The Group's Preliminary results will be announced on 1 March 2018.

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

Notes to Editors:

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.

This information is provided by RNS

The company news service from the London Stock Exchange

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December 19, 2017 02:00 ET (07:00 GMT)