Vimto owner Nichols plc is eyeing more international growth after enjoying a “strong” year as the cost of living crisis eased.
In a brief trading update, the soft drinks supplier noted that trading in the second half of last year had continued the positive momentum from the first and was in line with its growth strategy and medium-term financial ambitions.
Group revenue rose by 0.8 per cent to £172.1m as Nichols continued to perform well within its packaged business, which saw sales grow by 3.8 per cent. This was driven by particularly solid trading in the UK, where sales rose by 5.4 per cent, largely due to innovation and distribution gains.
However, in line with the company’s expectations, Out of Home (OoH) revenue fell by 8.2 per cent following exits from unprofitable accounts as part of plans outlined in its 2022 strategic review.
Meanwhile, gross margins continued to improve as inflationary pressures eased during the year and as its overall product mix improved. Nichols noted that this stability has enabled increased investment in the long-term strategic development of the business.
Whilst inflationary pressures now appear to be moderating in the UK, Nichols stated that it “remains mindful” of continued uncertainty affecting some of its markets and necessary mitigating actions are in place.
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”.
“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."
Chief Executive Andrew Milne commented, “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.
