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(Sharecast News) - Vimto cordial producer Nichols published its interim results on Thursday, which showed continued strategic progress but also flagged margin pressure and a more cautious capital return approach.
Group revenues edged up 1.8% to 85.5m in the six months ended 30 June, while adjusted operating profits rose 4.1% to 13.6m. However, adjusted pre-tax profits increased just 0.8% to 14.6m, with margins narrowing slightly due to reduced interest income and higher exceptional costs.
International sales fell 2.5% overall, weighed down by shipment phasing in the Middle East, though African revenue surged 16.9% on the back of a shift to a concentrate model.
UK packaged sales grew 3.7%, supported by volume gains and the launch of its vitamin-enriched squash, Wonderfuel, while out-of-home revenue rose 1.9%.
Howver, despite solid free cash flow of 14.2m and net cash of 61.6m, Nichols voted against declaring a special dividend, following last year's 20m payout, and instead, opted for a modest 15.0p interim dividend, up just 0.7% year-on-year.
Looking ahead, Nichols said FY adjusted pre-tax profits were expected to be in line with market expectations, but cautioned that ongoing economic uncertainty and tax changes both posed potential headwinds
As of 1015 BST, Nichols shares were down 2.58% at 1,359p.
Reporting by Iain Gilbert at Sharecast.com
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