Vimto firm Nichols sees revenue rise; shares up 7%

Shares of Merseyside-based Vimto and soft drinks firm Nichols plc rose about 7% on Friday after it published a strong trading update for the first nine months of the year to September 30, 2021.

Group revenue for the period was ahead of the board’s expectations, increasing 17% year on year to £107 million.

The firm now believes that adjusted profit before tax for FY21 will be ahead of the current market consensus.

“The Vimto brand has continued to deliver a strong performance across all of its markets,” said Nichols.

“In the UK, Vimto brand value has increased by 4.5% YTD, according to Nielsen.

“In Africa, the Middle East, Europe and the US the brand continued to see progress year on year, with international revenues increasing 36% versus the prior year.

“The group’s Out of Home (OoH) route to market continues to recover from the impact of the pandemic and has seen growth of 29% year on year.

“Cash generation has continued to be very positive through 2021 and despite the ongoing financial challenges posed by the pandemic, cash and cash equivalents at the end of the period were £55.6m (30 September 2020: £45.4m). ”

In its outlook, Nichols said: “Although uncertainty remains regarding Q4 trading as a result of increasing Covid-19 infection rates in the UK, in light of the strong trading in the year to date the board now believes that adjusted profit before tax for FY21 will be ahead of the current market consensus.

“The board now anticipates that adjusted PBT for FY21 will be in the range of £21m – £22m.

“Whilst the group’s revenue momentum is expected to continue into 2022, the outlook for the next financial year is adversely impacted by inflationary pressures including logistics, labour and materials, therefore profit expectations for 2022 remain unchanged.”

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