TIDMNICL
RNS Number : 7895F
Nichols PLC
19 November 2020
Nichols plc
(the "Company" or "Group')
Trading Update
Continued outperformance of the Vimto brand offset by
anticipated declines in Out of Home as a result of Covid-19
Nichols plc, the diversified soft drinks Group, provides the
following trading update for the 9 months to 30 September 2020
("the period").
As anticipated in the Group's Interim Results in July, the
ongoing Covid-19 pandemic has continued to impact the soft drinks
industry. Strong further growth achieved by the Vimto brand in the
UK and a good performance in the Group's International business
have been offset by significant declines in the UK Out of Home
("OoH") route to market. As a result, total Group revenue in the
period decreased by 16.5% to GBP91.7m against the prior year.
The Vimto brand has continued to outperform the wider UK soft
drinks market, achieving growth of 5.8%*1 in value terms in the
year to date ("YTD"), versus 1.9% value growth across the wider UK
soft drinks market. Across the Group's International markets, the
strong momentum reported in the Group's Interim Results has
continued, particularly in Africa, where revenues increased by
10.5% YTD against the prior year.
As previously anticipated, trading since the half year has
remained very challenging in the Group's OoH route to market. Q3
revenues in OoH were 45.2% lower than those seen in the same period
of 2019, as many of the Group's customers' outlets remained closed
or operated with significantly reduced footfall as a result of
ongoing social distancing restrictions.
The Group has placed a strong focus on controlling overhead and
operational costs whilst ensuring the business is able to 'Build
Back Better' post the pandemic. Management has focused on reducing
discretionary spend and realigning marketing investment to FY 2021.
Consequently, the Group has carried out a review of its operational
structures, and following the integration of prior year
acquisitions in the OoH route to market, has announced to its
employees on 18 November proposals subject to consultation that, if
implemented fully, would make a number of roles redundant by Q1
2021.
Whilst recognising that significant uncertainty remains
regarding Q4 trading as a result of ongoing social restrictions in
the UK, the Board currently expects Adjusted Profit Before Tax
("PBT")2 for FY20 to be between GBP11m and GBP13m.
Cash generation has continued to be very positive through 2020
and despite the financial challenges posed by the ongoing pandemic
cash and cash equivalents at the end of the period were GBP45.4m
(30 September 2019: GBP37.2m).
2021 Outlook
Given the ongoing uncertainty regarding the future progression
of the pandemic, the Board is not able to provide financial
guidance for the year ended 31 December 2021 at this stage.
Whilst recognising the current and near-term impact of the
pandemic on the soft drinks market, the Board continues to believe
that Nichols, underpinned by the strength of the Vimto brand and
the Group's diversified business model, remains well placed to
deliver its long-term strategic ambitions. The Group intends to
provide its next trading update on 12 January 2021.
John Nichols, Non-Executive Chairman, said:
"The Board remains pleased with the Group's resilient
performance in the period despite the significant impact of the
Covid-19 pandemic on the Out of Home sector. We are particularly
encouraged by the strong performance of the Vimto brand in the UK
where we continue to make market share gains.
As part of our ongoing focus on ensuring the Group has the right
structures in place to deliver its long-term strategy, the Group
has taken the difficult decision to propose, subject to
consultation, that a number of roles are removed from our
structure. These difficult decisions have not been taken lightly
and I thank all Nichols colleagues for their continued hard work
and commitment.
Whilst recognising the current and near-term impact of the
pandemic on the soft drinks market, the Board continues to believe
that Nichols, underpinned by the strength of the Vimto brand and
the Group's diversified business model, remains well placed to
deliver its long-term strategic ambitions."
*1 Nielsen Total Coverage Year to Date 3.10.2020
*2 Excluding Exceptional items
Contacts
Marnie Millard, Group Chief Executive Officer
Andrew Milne, Group Chief Operating Officer
David Rattigan, Group Chief Financial Officer
Nichols plc
Telephone: 0192 522 2222
Website: www.nicholsplc.co.uk
Alex Brennan / Hattie Dreyfus Steve Pearce / Rachel Hayes
Hudson Sandler N+1 Singer (Nominated Adviser)
Telephone: 0207 796 4133 Telephone: 0207 496 3000
Email: nichols@hudsonsandler.com Website: www.n1singer.com
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.
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