Vimto range


Soft drinks group Nichols has returned to the black thanks to a 14.3% jump in sales, with Vimto selling particularly well overseas. However, chairman John Nichols warned ongoing inflationary pressures continued to make life difficult in 2023.

Revenues in the year ended 31 December 2022 increased 14.3% to £164.9m as the out-of-home market, where Nichols supplies pubs, clubs, theme parks and cinemas, continued to recover from the pandemic and the Vimto brand outperformed rivals in the UK and boomed internationally.

It contributed to a return to pre-tax profits of £13.8m, compared with a £17.7m loss in 2021 that was mostly the result of writedowns in the out-of-home division as the group carried out a strategic review.

UK turnover rose 13.7% to £127m, with the off-trade registering a 2.9% sales rise and on-trade 42.8%. Internationally, revenues jumped 16.1% to £38m as Vimto expanded distribution across the Middle East and Africa.

However, of the £20.6m growth in group revenues, £8m came from increased prices and significantly higher volumes in out-of-home and overseas.

UK volumes in supermarkets declined, especially for the group’s carbonated drinks, which fell 16.4% as it protected margins from significant cost of goods pressures and pursued a value over volume strategy.

The reduction in volumes in the UK packaged market led to a negative gross profit impact of £900k in the year for the division. However, overall group pre-tax profit margins held steady year on year at 15.1%.

Underlying cost of goods inflation approached 14% across the year, with mitigating actions, such as switching dilutes manufacturing to faster more efficient lines, implemented to reduce this to closer to 10%.

CFO David Rattigan said he expected to see a similar picture for 2023.

Chairman John Nichols added: “Whilst FY23 will be a challenging year as cost-of-living pressures impact consumer demand across all routes to market, the group will continue to seek to mitigate these pressures through both cost efficiency and revenue management.”

CEO Andrew Milne told The Grocer that the group continued to look at M&A opportunities to strengthen the UK packaged business.

“We have a strong balance sheet and one of the opportunities for that money is M&A,” he said. “We believe we can buy something that we can add value to and complements our current range.”

Rattigan added: “The cost of capital has increased, so therefore the threshold is tougher, which makes the M&A market quieter at the moment. We recognise that and want to make sure that when we go, it is a deal that adds value.”