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Soft drinks group Nichols has hailed a “strong” performance in 2023 as the strength of the Vimto brand in the UK and overseas boosted revenues and profits.

The group said Vimto recorded its best ever brand value sales in the UK of £107m [Nielsen IQ 52 w/e 30 December 2023] thanks to investment in innovation, marketing and new distribution points, as well as improving availability.

Overall revenues from the packaged division increased 6.1% to £127.2m last year, with international growth of 16.8% accounting for most of the increase, while a modest 1.3% rise in the UK came as the company increased prices to recover cost inflation.

Revenues from out of home fell 3.4% to £43.6m following a restructure of the division to withdraw from lower margin products.

Nichols posted total revenues for 2023 of £164.9m, a rise of 3.5% on the prior year.

Adjusted operating profits increased 2.4% to £25.2m, while adjusted pre-tax profits rose 8.7% to £27.2m.

Nichols propsed a final dividend of 15.6p to take the total dividend for the year to 28.2p - slightly up on 2022.

CEO Andrew Milne said 2023 was a year of “strong progress and execution” for Nichols, as the packaged business recorded another year of growth, underpinned by the Vimto brand, and benefits from the newly streamlined out of home business were delivered earlier than expected.

“The group delivered a very strong performance in international markets driven by strong market penetration across existing and new territories in Africa and the Middle East,” he added.

“Innovation remained a critical growth driver and we have an exciting pipeline of new products planned for 2024.”

Milne said he was confident about the group’s prospects in 2024.

“Our diversified business model provides the foundation for continued success, reinforced by our well-established portfolio of owned and licensed brands, the close partnerships we have with our suppliers and customers and our long-term strategic focus.

“These strengths, coupled with a resilient soft drinks market and the dedication of our people, will enable us to continue to deliver value to shareholders.”

Morning update

Premier Foods has reached an agreement with its pension scheme trustee to suspend deficit contribution payments from the 1 April.

The suspension of future contributions is taking place earlier than originally expected, which Premier said reflected the strong performance of the scheme following the segregated merger that took place in June 2020.

The group will benefit from £33m increased free cashflow as a result in the financial year ended 29 March 2025.

CFO Duncan Leggett said: “The further significant progress in the funding position of the pension scheme has enabled us to take another important step to expected full resolution of the scheme by the end of 2026.

“This suspension of pension payments substantially increases the free cashflow available to us and presents us with enhanced capital allocation options to deliver on our growth ambitions. The scheme has reached this position following strong stewardship by the trustee over many years and we will continue to work collaboratively with them to further de-risk the scheme.”

Science in Sport has completed a full business and organisational review in a turnaround bid to secure the business’ future.

In a trading update for 2023, the group said the strength of the two core brands, SiS and PhD, was “unquestionable, but a “relentless pursuit of top line growth led to some poor strategic decisions and an inflated operating structure”.

A new leadership team, put in place in the fourth quarter of 2023, has reset the “aggressive” growth strategy to reduce and control the cost base and improve margins.

A “significant” number of uncommercial marketing contracts that prioritised growth over profitability have been exited.

Overall, the plan implemented by the new team is expected to save more than £2.5m.

Revenues in 2023 declined 1.6% to £62.8m as growth in the retail channel in the UK and internationally was offset by problems in Chine and lower digital trading.

Adjusted EBITDA swung from a loss of £2.7m to a profit of £2m.

“At the core of the business are two very strong brands operating in a growing marketplace,” the trading statement said.

“Management is confident with the revised operating model and new leadership, through re-engaging with core customers, shareholders and financing partners the business is building a more stable platform from which substantial shareholder value can be delivered.”

The FTSE 100 opened 0.3% higher at 7,671.99pts.

Nichols shares soared 6.4% to 1,075p on the back of its strong results.

Premier Foods also rocketed 13.1% higher to 157p thanks to the planned suspension of deficit contribution payments.

In contrast, Science in Sport sank 4.5% to 16p after its update.

Yesterday in the City

The FTSE 100 ended the day just up by 0.1% to 7,646.31pts.

Greggs enjoyed a 2% lift to 2,770p and Bakkavor jumped 3.1% to 99p following publication of annual results.

The high street bakery chain posted a double-digit hike to sales and profits in 2023, while the prepard foods manufacturer outperformed the market in 2023 and forecast profits at the upper end of the range for 2024.

Other climbers included Glanbia and Marks & Spencer, up 4.3% to €17.80 and 3.9% to 239.2p respectively.

Just Eat Takeaway led the fallers, down 5.3% to 1,146p, while Deliveroo dropped 2.5% to 114.9p.