Newton-le-Willows-headquartered Nichols’ well-invested brands range runs from Vimto, sold in over 65 countries, to Sunkist, Panda and licensed brands Weight Watchers and Levi Roots. The share price remains well below previous peaks, not helped by a recent high court ruling requiring Nichols to pay £8 million of damages to a former bottling partner in Pakistan.
Shares is reassured by Nichols’ balance sheet strength, which means the payout won’t constrain brand investment. Furthermore, interim results (24 Jul) showed the company continuing to outperform peers, revealing pre-exceptional profit before tax up 11% to £10 million on sales 3% ahead at £56.6 million. Going forwards, there’s scope for a much improved second half international performance, since first half sales disappointment largely reflected Ramadan timing, pushing Middle East shipments of Vimto into the second half.