Vimto firm Nichols says profits to surpass expectations

Vimto maker Nichols has said it is set for higher-than-expected profits after a slowdown in cost inflation.

Shares in the Merseyside-based company jumped in early trading as it also announced a £20 million special dividend for shareholders.

Andrew Milne, chief executive of the drinks firm, said he was “pleased to report further strategic progress in the first half”.

Nevertheless, Nichols reported that group revenues dipped 1.8% to £84 million over the first half of 2024, compared with the same period a year earlier.

It said the dip was partly driven by its out-of-home business, after it exited a number of unprofitable contracts.

However, the group said UK packaged revenues grew by 5.3% to £45.4 million due to strong sales volumes.

Meanwhile, it saw a 6.9% decline in revenues from its international packaged business, which it linked to the timing of shipments to the Middle East and lower volumes in Africa.

Its stronger UK trade helped to drive a 5.8% increase in pre-tax profits to £11.8 million for the half-year, as it was supported by easing cost inflation.

Mr Milne said: “Our biggest ever UK promotional campaign was launched towards the end of the period, and we are confident this will support the continued growth of the Vimto brand over the summer.

“Whilst mindful of continued pressure on consumer spending, despite levels of inflation stabilising, our diversified business model and the enduring strength of the Vimto brand have enabled us to deliver a strong performance.

“As a result, we now expect full-year profitability to be slightly ahead of current market expectations and we remain confident that Nichols is well placed to deliver its strategic growth ambitions.”

Nichols shares were 8.5% higher on Wednesday morning.