Nichols

Soft drinks group Nichols (NICL), the company behind the Vimto brand, has reported a 20.4% increase in pre-tax profits for the six months to June amid a rise in overseas sales.

The AIM-50 constituent reported pre-tax profits of £7.2m on sales up 14.4% to £50.5m. EPS increased by 23.8% to 14.62p while the interim dividend rose 12.3% to 9.1p. A net cash position of £14.4m was also declared.

The increases were driven by growth across its territories, with its UK business growing sales by 11% while international sales were up 13% due to a 14% rise in sales to Africa and an 11% rise in sales to the Middle East. Last year it was well publicised that Nichols had received considerable orders from the Middle East due to the popularity of its Vimto drink among Muslims fasting in the holy month of Ramadan, as it was said to provide an energy boost.

Nichols added that over the period it launched the Levi Roots brand of Caribbean fruit drinks, named after the Dragon's Den contestant and entrepreneur behind the 'Reggae Reggae' brand. It noted that, while there had been 'well-documented economic challenges affecting the consumer', margins had been maintained by 'a combination of price increases, cost efficiencies, new product development and international business growth'.

Following the results, analysts at house broker Brewin Dolphin increased their forecasts. The broker is pencilling in pre-tax profits of £16.6m (EPS: 33.6p) on turnover of £93.5m for the year to December 2011. Profits of £17.4m on sales of £98m are forecast for 2012.

Having almost tripled its 2009 price of 200p, Nichols has grown impressively over the past few years at a time when most of its sector peers have suffered due to the reduction in consumer spending. Growing at a considerable rate in the Middle East and bolstered by its popularity amongst Muslims fasting for Ramadan (which falls in the second half of the year), the company looks set to expand on its existing overseas footprint.