Vimto maker Nichols has kept on track to hit its ambitious growth targets after a strong year in line with expectations.
The group’s revenue grew by 0.8% to £172.1m last year with pre-tax profit expected to be around £30.1m, according to a trading update on Wednesday.
The flat overall revenue was broadly expected as the company shifts to a lower-revenue but margin-enhancing concentrate model across several African markets, said analysts at Peel Hunt.
“Our strategy will drive a high-margin, highly cash-generative, diversified business, built on the unique strength of the Vimto brand,” said CEO Andrew Milne.
“Looking ahead, we remain focused on continuing to execute our strategic plans and driving further progress against our medium-term ambitions.”
Nichols set out ambitious medium-term growth targets in November, including revenue growth of 30% and pre-tax profits up 50% by 2029.
“We think these results put the group on a strong footing for its five-year ambition,” said Anubhav Malhotra at Panmure Liberium. “We think the group has a credible growth plan, supported by market dynamics and cost efficiency initiatives, to achieve these targets.”
This year the UK packaged business grew 5.4% largely driven by innovation and distribution gains. This helped drive the total packaged business up 3.8%. This part of the business is expected to be the key engine for revenue growth.
Out-of-home revenue slumped 8.2% following exits from unprofitable accounts as part of a strategic review in 2022.
The international business performed strongly in the second half of the year as expected, with sales up 7%.
Nichols’ gross margins have continued to improve as inflationary pressures eased during the year and its overall product mix improved. “This stability has enabled increased investment in the long-term strategic development,” it said.
The company’s share price was down 1% in early trading on Thursday.
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