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Nichols PLC

11 March 2025

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2024 PRELIMINARY RESULTS

Strong performance delivered in line with growth strategy and medium-term financial ambitions

Nichols plc ('Nichols', the 'Company' or the 'Group'), the diversified soft drinks group, announces its Preliminary Results for the year ended 31 December 2024 (the 'Period').


	Year ended 31 December 2024	Year ended 31 December 2023	Movement

Group Revenue	£172.8m	£170.7m	+1.2%

Adjusted Operating Profit1	£28.9m	£25.2m	+14.6%
Operating Profit	£21.5m	£22.3m	(3.6%)

Adjusted Profit Before Tax (PBT) 1	£31.4m	£27.2m	+15.6%
Profit Before Tax (PBT)	£24.0m	£24.3m	(0.9%)

Adjusted PBT Margin1	18.2%	15.9%	+2.3ppts
PBT Margin	13.9%	14.2%	(0.3ppts)

Adjusted EBITDA 2	£30.8m	£27.6m	11.7%
EBITDA3	£23.5m	£24.7m	(4.3%)

Adjusted earnings per share (basic)1	64.02p	56.41p	+13.5%
Earnings per share (basic)	48.84p	50.34p	(3.0%)

Cash and cash equivalents	£53.7m	£67.0m	(19.9%)

Free Cash Flow4 (FCF)	£17.8m	£20.9m	(14.9%)

Adjusted Return on Capital Employed5	31.0%	26.3%	+4.7ppts
Return on Capital Employed6	23.1%	23.3%	(0.2ppts)

Proposed Final Dividend	17.1p	15.6p	+9.6%
Total Dividend	32.0p	28.2p	+13.4%
Special Dividend	54.8p	-	-

Financial Highlights


·	Group Revenue slightly higher than last year at £172.8m (2023: £170.7m), reflecting the shift in International to a lower revenue but margin enhanced concentrate model across several African markets
	o Overall Packaged revenue increased by +4.4%, with UK Packaged sales increasing by +6.3%, largely driven by innovation and distribution gains, while International Packaged revenue increased by +0.8%, as expected, due to the shift to a concentrate model o Out of Home ("OoH") revenue decreased by -8.2% in line with the Group's expectations following the strategic exit from unprofitable accounts delivering significant improvement in profitability
·	Gross Margin improvement to 45.7% (2023: 42.3%)
	o UK Packaged gross margin increased despite inflationary pressures due to revenue growth strategies o Increased weighting of higher margin concentrate sales in International within our Africa and Middle East business units
·	Continued focus on cost management resulted in Adjusted Operating Profit increasing by 14.6% to £28.9m, with an enhanced Adjusted Operating Margin of 16.7% (2023: 14.8%) and Adjusted Profit before Tax rising by 15.6% to £31.4m
·	Exceptional items of £7.4m (2023: £2.9m) reflecting the investment made in the Business Change Programme and Systems Development
·	Free Cash Flow of £17.8m (2023: £20.9m) in cash and cash equivalents of £53.7m (2023: £67.0m)
	o Dividend payments of £31.2m (2023: £10.2m), which included a special dividend of £20.0m o Investment in new Enterprise Resource Planning (ERP) system of £7.6m (2023: £1.7m)
·	Final dividend proposed at 17.1p (2023: 15.6p). Total normal dividend of 32.0p (2023: 28.2p).
·	Progress in line with medium-term ambitions

Strategic and Operational Highlights


·	Sustained growth in the UK Packaged division achieving the highest ever Vimto Retail Sales Value (RSV) of £121.2m driven by new product innovation, increased marketing investment and distribution gains
·	The International Packaged division continued to deliver excellent results underpinned by:
	o Successful volume growth in our core markets in the Middle East during our 101st Ramadan o New concentrate model in West Africa bringing production closer to the end consumer and improving margins o Strategic geographic expansion into Malaysia in Q4
·	Progress against ESG strategy ('Happier Future')
	o 'A' rating from Integrum ESG; a leading industry assessor of ESG credentials and achievements o Moved to sustainably sourced 51% rPET in all our UK Packaged products

Current Trading and Outlook


·	We anticipate a further strengthening of performance across 2025
·	Trading to date has been positive and is in line with management expectations
·	Nichols remains confident in its ability to deliver further strategic progress and a continued strong financial performance, in line with the Group's medium-term financial ambitions

Andrew Milne, Chief Executive Officer of Nichols, commented:

"Nichols delivered another strong performance in 2024, delivering double digit PBT growth and improved gross margin as we continued to successfully execute our growth strategy across each of our routes to market. In the UK, Vimto reached its highest ever retail sales value, demonstrating the enduring appeal of our iconic brand, driven by expanded distribution, new product innovation and our biggest ever marketing campaign, "Love the Taste". A strong performance in our International business was driven by volume growth in the Middle East during our 101st Ramadan in the region, as well as significant strategic progress across Africa as we transitioned to a margin-enhancing concentrate model in several markets.

At our Capital Markets Day in November, we outlined our medium-term financial ambitions and a clear roadmap for growth. We operate in a resilient and growing category and are well positioned to capitalise on the significant opportunities across both our UK and international markets, leveraging the strength of the Vimto brand. Underpinned by our diversified business model, strong brand portfolio, and solid financial position, I remain confident in our ability to drive high-margin, cash-generative growth and deliver long-term value for our shareholders."

References:

1 Excluding exceptional items

2 Adjusted EBITDA is the adjusted profit before tax, interest, depreciation and amortisation

3 EBITDA is the profit before tax, interest, depreciation and amortisation

4 Free Cash Flow is the net increase in cash and cash equivalents before acquisition funding and dividends

5 Adjusted return on capital employed is the operating profit (excluding exceptional items) divided by the average period-end capital employed

6 Return on capital employed is the operating profit divided by the average period-end capital employed

Contacts


Nichols plc Andrew Milne, Chief Executive Officer David Taylor, Finance Director	Telephone: 0192 522 2222
Singer Capital Markets (NOMAD & Broker) Steve Pearce / Jen Boorer / Oliver Platts	Telephone: 0207 496 3000 Website: www.singercm.com
Joh. Berenberg, Gossler & Co KG, London (Joint Broker) Clayton Bush / Alix Mecklenburg-Solodkoff	Telephone: 0203 207 7800
Hudson Sandler (Financial PR) Alex Brennan / Hattie Dreyfus / Harry Griffiths	Telephone: 0207 796 4133 Email: [email protected]

Notes to Editors

Established in 1908, Nichols operates within the resilient soft drinks category and owns or licenses several brands. Nichols is geographically and operationally diversified, operating across three routes to market of UK Packaged, International Packaged and Out of Home.

In the UK, Nichols operates across five soft drinks sub-categories: squash, flavoured carbonates, fruit drinks, energy and flavoured water. Nichols' portfolio includes the iconic Vimto brand plus a growing portfolio of licensed brands including Levi Roots, ICEE, SLUSH PUPPiE and Sunkist.

Under its asset-light model, Vimto is prominent in areas such as the Middle East and Africa and is enjoyed in over 60 countries worldwide.

For more information, visit the website: https://www.nicholsplc.co.uk/

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the Company's obligations under Article 17 of MAR.

Chair's Statement

Introduction

I am pleased to report on what has been another important year for the Group. Although the external trading environment remained challenging, the team has made considerable progress in delivering our growth strategy, as set out at our inaugural Capital Markets Day (CMD) held in London in November.

Nichols operates in a fast-moving industry with a constant need to be agile and adapt to changing market dynamics. Due to the strength of our portfolio of brands, experienced senior leadership team and asset-light business model, we are able to meet these changing needs whilst focusing on long-term opportunities.

During the year, we delivered a 1.2% increase in revenue to £172.8m (2023: £170.7m). Our core Packaged business performed well, with revenue increasing by 4.4%. This was largely driven by another strong performance and encouraging growth within our UK division, where revenues increased by 6.3% underpinned by innovation, focused strategic marketing and some important distribution gains. In our International division, revenues increased by 0.8% with our rate of growth moderated as we shifted to a lower revenue but margin enhancing concentrate model in a number of African markets. As anticipated, revenue in our OoH business reduced by 8.2% as we withdrew from unprofitable accounts in line with our strategic plans. Adjusted Operating Profit increased to £28.9m (2023: £25.2m) and Adjusted Profit before Taxation rose by 15.6% to £31.4m (2023: £27.2m), supported by cost management.

Strategic Progress

At our CMD in November, the executive and senior leadership teams presented the Group's strategy including clear financial ambitions to be delivered over the medium term. Nichols operates in a resilient and growing category with a strong portfolio of brands, with clear growth opportunities in both our UK and International Packaged businesses. During recent years, we have focused on strengthening our operational infrastructure, and the strong financial performance in the year demonstrates our ability to deliver on those ambitions.

People

This strong performance has been delivered by an excellent team of people across the whole Group, who have all worked hard in the continued execution of our strategy. I would like to give my thanks to all my colleagues at Nichols for their continued hard work and dedication. Rich in experience, knowledge and expertise, the team's commitment to both the Company and each other is truly impressive and they are a key differentiator for us. All our stakeholders benefit significantly from the strength of our people and their continued ability to drive performance, positioning us well to deliver growth.

The Board

The Board continued to evolve during the year. As previously reported, we were delighted to appoint Richard Newman as Chief Financial Officer with effect from 21 March 2024. In January of this year, we shared that Richard would start treatment for cancer and that David Taylor would rejoin the Company as a non-Board Finance Director from February 2025 to support Richard, who remains in his role and on the Board of Directors. On behalf of the Board, I wish Richard all the best for his treatment.

John Gittins will step down from the Board as a Non-Executive Director in August 2025, having served a full term of 9 years plus an additional year to support the Group through a period of substantial change. It has been a pleasure to work with John over the last two years and, on behalf of the Board, I would like to thank him for his service and commitment to the Group, including in his role as Chair of the Audit Committee.

Alan Williams will be joining the Board as Non-Executive Director in March 2025 and will assume the role of Chair of the Audit Committee later in the year, enabling a smooth transition of responsibilities from John. We are delighted to welcome someone with Alan's experience and capability to the Board, and I look forward to benefiting from his insights in the years ahead.

During the year, we also further strengthened our succession planning processes as part of our continued focus on ensuring that the composition and expertise of the Board remains effective and appropriate for our business.

Environment, Social and Governance

We are proud of the Group's commitment to the Nichols Happier Future strategy. The Happier Future pillars of "Everyone Matters", "Products We're Proud Of" and "Owning Our Climate Impact" underpin the development of our growth strategy as well as our day-to-day decision making.

During the year, we made significant progress towards achieving our targets. Highlights for 2024 include receiving an 'A' rating from Integrum ESG, a leading industry assessor of ESG credentials and achievements, and moving our UK Packaged products to sustainably sourced 51% rPET. I am particularly pleased that our levels of employee engagement have risen further as we continue to build our unique culture and to support our colleagues across areas such as mental health, reward and workplace flexibility. We are equally proud of our team and values, as we are of our financial performance.

Dividend and Capital Allocation

Nichols has a clear and consistent capital allocation policy, including investing in growing our business both organically and through acquisition, maintaining a strong balance sheet and a progressive dividend policy with dividend cover of broadly 2x adjusted earnings of the Group. As reported previously, the Board is committed to returning surplus cash to shareholders and, in the year, the Group issued a special dividend of 54.8p per share (2023: nil) totalling £20m, which was paid alongside the Interim Dividend, returning a total of £31.2m to shareholders via dividends in 2024.

In line with the Group's dividend policy, the Board is pleased to recommend an increased final dividend of 17.1p per share (2023: 15.6p) as a result of its continued strong cash generation, providing a proposed total ordinary dividend for the year of 32.0p per share (2023: 28.2p). If approved, the final dividend will be payable to shareholders on the Register of Members at 21 March 2025. The ex-dividend date will be 20 March 2025.

Nichols has a strong record of long-term cash generation and holds significant cash and deposit balances of £53.7m as at 31 December 2024. The Board intends to maintain the strength of its balance sheet, while prioritising investment in growth opportunities, both organic and via acquisitions, as well as providing attractive shareholder returns.

Outlook

The Group continues to derive considerable benefit from its diversified and asset-light business model, with an established UK position complemented by the enhanced growth opportunities within our International business. Within our Packaged business, we have continued our strategy of investment in innovation and extending our product range and in the development of our international markets during the year, both of which are expected to continue to provide growth over the short and medium term.

Our 2024 Capital Markets Day set out a clear and ambitious strategy for growth across each of our business units and clear financial ambitions to be delivered over the medium term.

The Board remains confident that the Group is well positioned to execute its strategic plans and deliver sustainable shareholder returns, benefiting from the strength of its diversified business model, strong portfolio of brands and financial position.

Liz McMeikan

Non-Executive Chair

11 March 2025

Chief Executive Officer's Statement

Overview

I am pleased to report our results for the year ended 31 December 2024. We have delivered a strong set of results against a challenging market and evolving regulatory environment. Our success is largely due to the dedication, flexibility and resilience of our teams. I would like to thank all of them for continuing to embody the values of the Company and ensuring the business delivers continued value for all our stakeholders. I would also like to thank all our partners for their support in helping us achieve our goals and targets.

Financial Performance

Revenue was 1.2% ahead of last year at £172.8m which, encouragingly, was achieved through both volume and value reflecting strong consumer demand for our products. We also utilised appropriate revenue growth strategies to help mitigate continued cost pressures. As a result of these actions, and disciplined cost controls, I am pleased to report that Group margins and bottom line contribution improved, with Adjusted Operating Profit growth of £3.7m (+14.6%), Adjusted Profit Before Tax (PBT) growth of £4.2m (+15.6%) and an Adjusted PBT margin of 18.2% (2023: 15.9%).

After net exceptional costs of £7.4m (2023: £2.9m), principally relating to the Business Change Programme and Systems Development, Operating Profit was £21.5m (-3.6%) and Profit Before Tax was £24.0m (-0.9%) with a PBT margin of 13.9% (2023: 14.2%).

Our portfolio of owned and licensed brands continued to perform well, and we continued to invest in strong marketing campaigns, innovation and broader strategic initiatives. Our long-term customer partnerships are critical to our success, and we continued to execute our business plans to maintain high service levels and strong in-market delivery of our promotions and innovation programmes throughout the year. Additionally, we have continued to focus on increasing our distribution during the year and were pleased to have agreed extensions and new wins with a range of customers.

Ensuring our consumers can enjoy our products on a daily basis is key to our success. During the year, we again delivered some exceptional brand experiences in outlets and online for our consumers. In the UK, we launched our largest ever Vimto marketing campaign, "Love the Taste", which proved successful in attracting new consumers to the brand.

Our Happier Future strategy remains a vital element of our long-term strategy and we continued to make progress versus our commitments. A particular highlight was being awarded an 'A' rating from Integrum ESG, a leading industry assessor of ESG credentials and achievements.

Strategy

In November, we were delighted to host a Capital Markets Day in London where we set out our medium-term financial ambitions and shared our plans for driving growth across each of our business units.

Our four clear strategic pillars remain our focus to drive long-term growth:

· More from the Core

o Focus on building a diversified and optimised product range across all of our core geographies

· Thirst for New

o Drive growth across our Packaged business through product portfolio innovation, channel growth, targeted acquisition and entering new selective international geographies

· Fuel for Growth

o Continually drive efficiencies within our operations to enable investment and support the long-term growth of our business

· Happier Future

o Deliver across our key pillars of People, Products and Planet by doing the right things, acting responsibly and meeting the long-term needs of the business

These growth pillars will be delivered through three key enablers: our strong portfolio of brands, a culture that allows people to thrive and working in close collaboration with all of our key partners.

Market Performance

International Packaged

We delivered an excellent performance across our international markets, with total International revenue growth of +0.8% versus 2023. Growth was particularly strong in the Middle East as we continued to build on our relationship with our long-standing partners Aujan Coca Cola Beverages Company (ACCBC), which recently assumed responsibility for Vimto sales in the Yemen alongside its trade execution across the Gulf. As expected, revenue in Africa fell slightly following the successful phased transition from a finished goods to a margin-enhancing concentrate model.

In the Middle East, revenue increased by 9.6% versus 2023, driven by strong volume growth during our 101st Ramadan in the region. Despite increased category competition, the brand continues to dominate the Iftar occasion across the region supported by a strong integrated market campaign, "In sweetness is our togetherness". New product innovation also contributed to growth, with Ready to Drink (RTD) flavours gaining volume momentum. Additionally, our zero cordial and cans now represent 8% and 10% of Vimto cordial and can sales, respectively. Capitalising on the evolving consumer trends towards health, wellness and immunity, the stills RTD range has been fortified with a vitamin and zinc bundle to improve product credentials and drive further volume growth.

As anticipated, revenues in Africa declined versus the prior year in line with our strategy to move can production closer to the point of consumption. We commenced the phased move of red cans from our contract packers in Spain and Portugal to our partner's new facility in Senegal, which provides volume, margin and carbon-reduction ESG benefits. The opening of our first international legal entity in Senegal during the year also supports regional licensee and distributor initiatives, with the local team already making a valuable impact. This move, alongside a more efficient can supply chain, lays a strong foundation for continued growth of the Vimto brand in West Africa and the rest of the continent.

Across our Rest of World markets, largely Europe and North America, value growth has been the key focus, building on the strong volumes delivered in 2023. Revenues in Europe increased by 8.9% versus 2023, as we focused on driving the core range into more distribution points and increasing penetration through high quality in-market execution. Towards the end of 2024, we targeted new retailer distribution in the Nordics and Germany with bespoke red can SKUs aligned to local market demand.

A particular highlight within the International business was launching into Malaysia in Q4 as part of our strategic geographic expansion. After years of planning and preparation, in Q4 we launched a bespoke, local recipe in a 1L cordial bottle via a local production model. With 25% juice, and a source of vitamin C, the product is designed to meet local consumer needs and to stand out from the competition. The exclusive launch in a national convenience retailer was followed by a broader trade rollout with listings secured in all the major national super and hypermarkets. We invested strongly in an integrated launch plan to drive awareness and trial, focusing on differentiated product offerings through sampling and promotions at the point of purchase, supported by digital and outdoor advertising campaigns.

UK Packaged

During 2024, we continued to deliver sustained growth in the UK Packaged division, with revenue growth of 6.3% versus 2023. We were delighted that Vimto reached its highest ever RSV of £121.2m, driven by NPD, focused strategic marketing and key distribution gains. In addition, our portfolio reached a total RSV of £128m1, a 2.4% year-on-year increase through a combination of our Vimto and licensed brands.

At the beginning of 2024, we launched our "Fresh Thinking for Drinking" category strategy which fuelled our trading momentum throughout the year and helped identify new opportunities to drive our performance within the category over the medium term.

In squash, we have maintained our position as the number two brand in the marketplace with an RSV of £71.8m2, up 2.1% year-on-year. We launched our blood orange and lime variant, bringing a new, fresh and relevant flavour profile to our established portfolio which, as a combined total, now represents 11.6% of our squash RSV at £8.3m2. In addition, we continued to focus on growing our core purple proposition through a combination of targeted distribution gains, including convenience, as well as successfully unlocking white space in key southern regions, further driving availability to support our long-term brand penetration ambitions.

Beyond squash, we continued to drive awareness and appeal across our carbonated and still ranges, including the launch of our new sub-brand Vimto Discoveries and the return of our much-loved Vimto Minis. We also marked our second full year since the launch of Vimto Energy with a growing RSV of £2.9m3. The energy category offers significant opportunities and, with the distribution gains in 2024 plus those established in 2023, our performance remains encouraging with further ambitious plans to be realised in 2025. We remain focused and confident in driving further growth opportunities for Vimto Energy as the energy category is now worth an estimated £2.2bn3, and "clean energy" is increasingly gaining prominence.

2024 saw the launch of our biggest ever Vimto master brand campaign, "Love the Taste". This "through the line" campaign drove significant visibility for the Vimto brand, creating countless opportunities over a three-month period for consumers to "love the taste or your money back". The advertising campaign reached 87% of our target audience and was seen an average of 10 times by our target customers5. Importantly, the size and scale of the investment and activation delivered accelerated shopper marketing opportunities across our customer base and the ability to reach new audiences by working closely with customers to create optimum go-to-market plans.

In line with our multi-channel approach, we continued to invest and deliver growth in our e-commerce business. We have now successfully traded for a full year with Amazon and increased our presence across multiple e-commerce providers, ensuring consumers can buy one or more of our brands wherever and whenever they want. We continue to explore further online opportunities as we seek to expand across core retail customer platforms in addition to dedicated pureplay customers including Amazon and Ocado.

Within our brand licensing channel, our ongoing partnership with Myprotein (MYP) continues to perform strongly. This has been supported by a targeted move into UK retail in addition to the MYP direct-to-consumer platform, extending Vimto's visibility and reach across another key category in the retail environment. As we continue to build momentum in this space, we are exploring new flavour extensions to broaden appeal in 2025.

Beyond the Vimto brand, our licensed portfolio continued to make positive strides delivering £7m RSV4. Within licensing, SLUSH PUPPiE and Levi Roots provide complementary propositions to our core Vimto range. In 2024, to further accelerate licensing growth, we launched three new formats into the Levi Roots portfolio targeting new occasions and sales channels with a single serve Caribbean Crush can, as well as entering the energy category with two new flavours. The launch of Levi Roots energy has proven to be a particular hit with retailers and consumers, and early 2025 sales have been encouraging.

Out of Home

2024 represented the first full year of trading in OoH post the strategic review with the business now operating as a distinct division within the Group, focusing on driving profitability.

The key changes that were implemented broadly fit into three areas:

· Exited underperforming customer contracts, channels and regions which were considered sub scale and unprofitable

· Implemented processes to simplify the business and a rationalisation of operating costs and central overheads

· Improved financial reporting, including divisional and regional reporting focused on net profit

I am pleased to report that, as a result of these changes, we were able to grow our Adjusted Operating Profit in the year by 35.0%. As expected, our revenues were down 8.2% as we exited unprofitable accounts as part of the actions following our strategic review.

During the year, we launched four limited edition flavour ICEE products in partnership with the Ghostbuster and Wicked film releases, which have received positive consumer feedback.

In line with our Happier Future commitments, we carried out a review into our packaging and have refreshed a number of lines in our 'Premium Mixers by Vimto' range.

Looking Ahead

Our strong financial performance in 2024 reflects the successful execution of our clear growth strategy across multiple routes to market and the strength of our diversified business model.

Looking ahead, although we expect continued macroeconomic uncertainty, we anticipate that we will be able to further strengthen our performance across 2025 building on the progress made in 2024. Trading to date has been positive and in line with management expectations. We operate in a resilient and growing soft drinks market, with an exciting portfolio of owned and licensed brands, significant opportunities for geographical expansion, and a strong balance sheet to support both organic growth and targeted acquisitions.

As we maintain our focus on the clear strategic priorities we have in place, underpinned by the strength of our business model and the passion of our teams, I am confident we will deliver further strategic progress, sustained growth, and attractive returns for shareholders, in line with our medium-term financial ambitions.

Andrew Milne

Chief Executive Officer

11 March 2025

References

1 Nielsen IQ RMS data; Squash, Flavoured Carbonates, RTD Still, Energy and Flavoured Water categories; 12-month period ending 28.12.24; GB Total Coverage market

2 Nielsen IQ RMS data; Squash category; 12-month period ending 28.12.24; GB Total Coverage market

3 Nielsen IQ RMS data; Energy category; 12-month period ending 28.12.24; GB Total Coverage market

4 Nielsen IQ RMS data; Flavoured Carbonates category; 12-month period ending 28.12.24; GB Total Coverage market

5 Wavemaker PCA 2024

Chief Financial Officer's Statement

Revenue

Group revenue increased by 1.2% to £172.8m (2023: £170.7m). Revenue increased satisfactorily despite the planned reduction in scale of the OoH business and supply chain changes in West Africa.

We continued to perform well within our Packaged business, with sales up by 4.4%, with particularly strong growth in the UK where sales increased by 6.3% versus 2023. International packaged sales rose by 0.8% versus 2023 following a strong second half, as expected.

Revenue in our OoH business fell by £3.6m to £40.0m (8.2%), as expected, following the exit from lower margin accounts following the implementation of the actions from our strategic review in 2022 .

Gross Profit

The Group has focused on improving and restoring its gross margin that had been eroded due to the significant inflationary pressures over the last 18 months. We mitigated much of the cost increases experienced in the latter part of 2022 and early 2023 through more effective purchasing and working closely with our manufacturing partners to optimise productivity and, where appropriate, increased sales pricing. As a result of these decisions, absolute gross profit improved to £79.0m (2023: £72.2m), with Group gross margin increasing to 45.7% from 42.3%. This improvement also reflects a change in sales mix within our International business in Africa, with an increased weighting of concentrate sales.

Distribution Expenses

Distribution expenses totalled £10.2m (2023: £9.6m), as overall volumes increased in the UK Packaged and International Packaged businesses and rates increased in line with inflation.

Administrative Expenses

Administrative expenses (excluding exceptional items) increased in the year by £2.5m to £39.9m. This has been driven by further investment in marketing spend to drive brand equity within the Packaged business as well as investment in our people through increased payroll and staff related costs in response to cost-of-living pressure. These additional expenses have been partially offset by a significant reduction in overhead costs related to the OoH business following implementation of the actions identified through the strategic review process.

Including exceptional items of £7.4m (related to the Business Change Programme and Systems Development and detailed below), administrative expenses were £47.2m (2023: £40.3m).

Exceptional Items

The Group has incurred £7.4m of net Exceptional Costs during the year (2023: £2.9m), almost entirely attributable to the investment made in our Business Change Programme and Systems Development, detailed below.

Business Change Programme and Systems Development

The Group commenced a project in 2022 to identify the potential benefits from replacing current operational and IT processes and systems, which were reaching the end of their planned life, with a cloud-based integrated Enterprise Resource Planning (ERP) solution. During 2024 this project continued to progress well, as we completed the design, build and testing of the systems and processes. Costs of £7.6m (2023: £1.7m) have been incurred in completing this work with some final costs to be incurred in early 2025 ahead of the planned 'go-live' in March 2025. Due to the nature of these charges, the Group is treating the costs as exceptional.

Historic Incentive Scheme

During 2022 the Group finalised the treatment of a historic incentive scheme with HM Revenue and Customs and agreed to pay a sum in settlement of additional tax and interest liabilities. The Group also commenced the process of the recovery of debts from current and former employees who had indemnified the Company. A reserve was put in place to provide against the potential irrecoverability of some of these debts. Given the progress made in the collection of outstanding amounts this provision has been reduced during 2024 giving a net exceptional credit of £0.2m (2023: £0.6m credit).

Out of Home Strategic Review and Restructuring

In 2022 the Group completed a strategic review into its OoH business following a number of changes to the market it serves. This review included an assessment of customer and product profitability and the identification of opportunities to raise operating margins. As the changes arising from this review have been finalised during 2024, a net credit of under £0.1m has been realised. This restructuring was one-off in nature and has been treated as exceptional. The review is now fully concluded.

Segmental Performance

The Group's Packaged business achieved revenue growth of 4.4% versus 2023. This growth was driven by our UK Packaged business where the positive momentum from H1 continued into H2. Despite the switch to a lower revenue generating model in our Africa business, there was good progress in the International Packaged division, with a particularly strong second half performance resulting in an overall increase in revenue of 0.8% (H1 2024: -6.9%). Group profit growth was strong with Packaged Adjusted Operating Profit increasing by £4.3m to £40.6m (2023: £36.3m, +11.9%).

The OoH business saw revenues fall to £40.0m (2023: £43.6m) reflecting the continued strategic exits of several unprofitable accounts and product offerings, identified as part of the OoH Strategic Review. As anticipated, the absolute profitability of the business has improved significantly as a consequence of reducing the cost base and focusing resources more efficiently within OoH. Adjusted Operating Profit increased by £1.7m to £6.8m (2023: £5.1m, +35.0%).

Central costs increased in the year to £18.6m (2023: £16.2m). The majority of this increase was in employment costs reflecting both cost of living increases and investment into additional capability and skills within the Group.

Interest Income

Net finance income of £2.5m (2023: £2.0m) has been received during the year. The Group has benefitted from the continued higher level of interest rates during the year.

Adjusted Profit Before Tax, Profit Before Tax and Tax Rate

Adjusted Profit Before Tax (excluding exceptional items) increased by 15.6% to £31.4m (2023: £27.2m) and Profit Before Tax (including exceptional items) decreased by 0.9% to £24.0m (2023: £24.3m). The effective tax rate for the year rose to 25.8% principally as a result of the general increase in UK corporation tax rates.

Adjusted Earnings per Share and Earnings Per Share

Adjusted Earnings per Share ('Adjusted EPS') increased by 13.5% from 56.41p to 64.02p. Earnings per Share were 48.84p (2023: 50.34p).

Cash and Cash Equivalents and Balance Sheet

The Group's cash generated from operating activities remained strong at £23.0m (2023: £24.8m) and our cash conversion performance was 76% (2023: 102%). Our free cash flow, after the payment of tax and capital expenditure, was down £3.1m at £17.8m (2023: £20.9m). The reduction in these metrics reflects a higher cash element within exceptional costs during the year. Capital expenditure in the period was higher than in 2023 at £0.9m (2023: £0.5m) with the increase largely a result of operational and quality enhancements at our Ross manufacturing facility.

Overall, after the payment of dividends totalling £31.2m (2023: £10.2m), which included a special dividend of £20.0m, net cash decreased by £13.3m to £53.7m (2023: increase of £5.4m to £67.0m). The Group retains substantial cash resources to fund investment in its forward strategic growth plans whilst balancing shareholder returns.

The Group's Adjusted Return on Capital Employed increased to 31.0% (2023: 26.3%). Return on Capital Employed was 23.1% (2023: 23.3%).

Andrew Milne

Chief Executive Officer

11 March 2025

CONSOLIDATED INCOME STATEMENT

For the year ended 31 December 2024


	2024 £'000	2023 £'000

Continuing operations
Revenue	172,809	170,741
Cost of sales	(93,855)	(98,565)
Gross profit	78,954	72,176

Distribution expenses	(10,214)	(9,567)
Administrative expenses	(47,249)	(40,323)
Operating profit	21,491	22,286

Finance income	2,660	2,095
Finance expense	(117)	(123)
Profit before taxation	24,034	24,258

Taxation	(6,196)	(5,896)
Profit for the year	17,838	18,362

Earnings per share (basic)	48.84p	50.34p
Earnings per share (diluted)	48.81p	50.32p


Adjusted for exceptional items

Operating profit	21,491	22,286
Exceptional items	7,370	2,907
Adjusted operating profit	28,861	25,193

Profit before taxation	24,034	24,258
Exceptional items	7,370	2,907
Adjusted profit before taxation	31,404	27,165

Adjusted earnings per share (basic)	64.02p	56.41p
Adjusted earnings per share (diluted)	63.98p	56.39p

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 December 2024


	2024	2023
	£'000	£'000
Profit for the financial year	17,838	18,362

Items that will not be reclassified subsequently to profit or loss
Re-measurement of net defined benefit surplus	(434)	(192)
Deferred taxation on pension obligations and employee benefits	95	48

Other comprehensive expense for the year	(339)	(144)

Total comprehensive income for the year	17,499	18,218

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 31 December 2024



	2024	2023
ASSETS	£'000	£'000
Non-current assets
Property, plant and equipment	8,743	9,457
Intangibles	175	256
Pension surplus	3,721	4,014

Total non-current assets	12,639	13,727

Current assets
Inventories	9,322	8,809
Trade and other receivables	44,340	41,393
Cash and cash equivalents	55,185	82,546

Total current assets	108,847	132,748

Total assets	121,486	146,475

LIABILITIES
Current liabilities
Borrowings	1,512	15,516
Trade and other payables	33,271	30,719
Corporation tax payable	243	318

Total current liabilities	35,026	46,553

Non-current liabilities
Other payables	1,672	1,865
Deferred tax liabilities	743	715

Total non-current liabilities	2,415	2,580
Total liabilities	37,441	49,133

Net assets	84,045	97,342

EQUITY
Share capital	3,697	3,697
Share premium reserve	3,255	3,255
Capital redemption reserve	1,209	1,209
Other reserves	2,471	1,845
Retained earnings	73,413	87,336

Total equity	84,045	97,342

CONSOLIDATED STATEMENT OF CASH FLOWS

For the year ended 31 December 2024


	2024		2023
	£'000	£'000	£'000	£'000

Cash flows from operating activities

Profit for the financial year		17,838		18,362

Adjustments for:
Depreciation and amortisation	1,909		2,343
Loss on sale of property, plant and equipment	52		67
Interest received	(2,480)		(2,095)
Interest paid	117		123
Tax expense recognised in the income statement	6,196		5,896
(Increase)/decrease in inventories	(513)		1,623
Increase in trade and other receivables	(2,984)		(1,549)
Increase in trade and other payables	2,549		384
Charge for share-based payments	272		-
Change in pension obligations and employee benefits	39		(81)
Fair value loss/(gain) on derivative financial instruments	37		(285)
		5,194		6,426

Cash generated from operating activities		23,032		24,788
Tax paid		(6,131)		(4,776)

Net cash generated from operating activities		16,901		20,012


Cash flows from investing activities
Finance income	2,480		2,095
Proceeds from sale of property, plant and equipment	18		192
Acquisition of property, plant and equipment	(851)		(479)

Net cash from investing activities		1,647		1,808

Cash flows from financing activities Payment of lease liabilities	(755)		(909)
Dividends paid	(31,153)		(10,177)

Net cash used in financing activities		(31,908)		(11,086)

Net (decrease)/increase in cash and cash equivalents Exchange gain on cash and cash equivalents		(13,360) 3		10,734 -
Cash and cash equivalents at 1 January		67,030		56,296

Cash and cash equivalents at 31 December		53,673		67,030

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

As at 31 December 2024


	Called up share capital £'000	Share premium reserve £'000	Capital redemption reserve £'000	Other reserves £'000	Retained earnings £'000	Total equity £'000

At 1 January 2023	3,697	3,255	1,209	1,280	79,295	88,736
Movement in ESOT	-	-	-	(2)	-	(2)
Credit to equity for equity-settled share-based payments	-	-	-	567	-	567
Dividends	-	-	-	-	(10,177)	(10,177)
Transactions with owners	-	-	-	565	(10,177)	(9,612)
Profit for the year	-	-	-	-	18,362	18,362
Other comprehensive expense	-	-	-	-	(144)	(144)
Total comprehensive income	-	-	-	-	18,218	18,218
At 1 January 2024	3,697	3,255	1,209	1,845	87,336	97,342
Movement in ESOT	-	-	-	23	-	23
Credit to equity for equity-settled share-based payments	-	-	-	603	-	603
Share option exercise	-	-	-	-	(272)	(272)
Dividends	-	-	-	-	(31,153)	(31,153)
Transactions with owners	-	-	-	626	(31,425)	(30,799)
Profit for the year	-	-	-	-	17,838	17,838
Other comprehensive expense	-	-	-	-	(339)	(339)
Currency translation	-	-	-	-	3	3
Total comprehensive income	-	-	-	-	17,502	17,502
At 31 December 2024	3,697	3,255	1,209	2,471	73,413	84,045

NOTES

1. Basis of Preparation

The preliminary financial information does not constitute statutory accounts for the financial years ended 31 December 2024 and 31 December 2023 but has been derived from those accounts. The accounting policies remained unchanged from those set out in the 2023 Annual Report and Accounts.

Statutory accounts for 2023 have been delivered to the Registrar of Companies and those for the financial year ended 31 December 2024 will be delivered following the Group's Annual General Meeting. The auditors have reported on those accounts and their reports were unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.

2. Going Concern

In assessing the appropriateness of adopting the going concern basis in preparing the Annual Report and Accounts, the Directors have considered the current financial position of the Group and its principal risks and uncertainties. The review performed considers severe but plausible downside scenarios that could reasonably arise within the period.

Our modelling has sensitised the impacts of Russia's invasion of Ukraine and the conflict within Yemen, in particular their impact on global supply chains and macroeconomic inflationary factors. Alternative scenarios, including the potential impact of key principal risks from a financial and operational perspective, have been modelled with the resulting implications considered. In all cases, the business model remained robust. The Group's diversified business model and strong balance sheet provide resilience against these factors and the other principal risks that the Group is exposed to. At 31 December 2024 the Group had cash and cash equivalents of £53.7m with no external bank borrowings.

On the basis of these reviews, the Directors consider the Group has adequate resources to continue in operational existence for the foreseeable future (being at least one year following the date of approval of the Annual Report and Accounts) and, accordingly, consider it appropriate to adopt the going concern basis in preparing the financial statements.

3. Segmental Reporting

The Board, as the entity's chief operating decision maker, analyses the Group's internal reports to enable an assessment of performance and allocation of resources. The operating segments are based on these reports.

The accounting policies of the reportable segments are the same as the Group's accounting policies. Segment performance is evaluated based on adjusted operating profit (excluding exceptional items), finance income and exceptional items. This is the measure reported to the Board for the purpose of resource allocation and assessment of segment performance.


Year ended	Packaged
31 December 2024	UK	Middle East	Africa	Rest of World	Total Packaged	Out of Home	Total Segments	Central1	Total Group
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000

Revenue	89,222	14,213	20,793	8,593	132,821	39,988	172,809	-	172,809

Adjusted operating profit					40,626	6,835	47,461	(18,600)	28,861

Net finance income									2,543

Adjusted profit before tax									31,404

Exceptional items									(7,370)

Profit before tax									24,034


Year ended	Packaged
31 December 2023	UK	Middle East	Africa	Rest of World	Total Packaged	Out of Home	Total Segments	Central1	Total Group
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000

Revenue	83,914	12,963	22,184	8,122	127,183	43,558	170,741	-	170,741

Adjusted operating profit					36,317	5,063	41,380	(16,187)	25,193

Net finance income									1,972

Adjusted profit before tax									27,165

Exceptional items									(2,907)

Profit before tax									24,258

1 Central includes the Group's central and corporate costs, which relate to salaries and head office overheads such as rent and rates, insurance and IT maintenance as well as the costs associated with the Board and Executive Leadership Team, Governance and Listed Company costs.

A geographical split of revenue is provided below:


	Year ended 31 December 2024	Year ended 31 December 2023
	£'000	£'000
Geographical split of revenue
Middle East	14,213	12,963
Africa	20,793	22,184
Rest of the World	8,950	8,518
Total exports	43,956	43,665
United Kingdom	128,853	127,076
Total revenue	172,809	170,741

4. Exceptional items


	Year ended 31 December 2024	Year ended 31 December 2023
	£'000	£'000

Out of Home Strategic Review and Restructuring	(34)	1,784
Business Change Programme and Systems Development	7,603	1,722
Historic incentive scheme	(199)	(599)
	7,370	2,907

The Group incurred £7.4m of exceptional costs during the year (2023: £2.9m).

Business Change Programme and Systems Development

Historic Incentive Scheme

Out of Home Strategic Review and Restructuring

Due to the one-off nature of these charges, the Board is treating these items as exceptional costs and their impact has been removed in all adjusted measures throughout this report.

5. Earnings Per Share

Basic earnings per share is calculated by dividing the profit after tax for the period of the Group by the weighted average number of ordinary shares in issue during the period. The weighted average number of ordinary shares is calculated by adjusting the shares in issue at the beginning of the period by the number of shares bought back or issued during the period multiplied by a time-weighting factor. Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares in issue assuming the conversion of all potentially dilutive ordinary shares.

The earnings per share calculations for the period are set out in the table below:


	Earnings £'000	Weighted average number of shares	Earnings per share
31 December 2024
Basic earnings per share	17,838	36,520,834	48.84p
Dilutive effect of share options		21,719
Diluted earnings per share	17,838	36,542,553	48.81p

Adjusted earnings per share (excluding exceptional items) has been presented in addition to the earnings per share as defined in IAS 33 Earnings per share, since, in the opinion of the Directors, this provides shareholders with a more meaningful representation of the earnings derived from the Groups' operations. It can be reconciled from the basic earnings per share as follows:


	Earnings £'000	Weighted average number of shares	Earnings per share
31 December 2024
Basic earnings per share	17,838	36,520,834	48.84p
Exceptional items after taxation	5,542
Adjusted basic earnings per share	23,380	36,520,834	64.02p
Diluted effect of share options		21,719
Adjusted diluted earnings per share	23,380	36,542,553	63.98p

6. Property, plant and equipment and Intangibles


	Property, Plant & Equipment	Intangibles
	£'000	£'000
Cost
At 1 January 2024	31,674	9,998
Additions	1,185	-
Disposals	(5,697)	-
At 31 December 2024	27,162	9,998
Depreciation and Amortisation
At 1 January 2024	22,217	9,742
Charge for the period	1,828	81
Disposals	(5,626)	-
At 31 December 2024	18,419	9,823
Net book value
At 31 December 2023	9,457	256
At 31 December 2024	8,743	175

7. Cash and cash equivalents


	Restated at 31 January 2024 £'000	Cash Flow £'000	At 31 December 2024 £'000

Cash and cash equivalents	82,546	(27,361)	55,185
Current borrowings	(15,516)	14,004	(1,512)
Net cash	67,030	(13,357)	53,673

Included within cash and cash equivalents are short term deposits of £32,286,000 (2023: £48,631,000) that are readily convertible to known amounts of cash.

The Group operates set off arrangements with Royal Bank of Scotland PLC to facilitate the day-to-day management of cash. In 2024, the Group has presented the amounts held within the set off arrangement on a gross basis without netting off individual accounts that are in credit or overdrawn. Comparative figures for 2023 were not presented in accordance with IAS 32 as gross balances and have been restated.

The equivalent balances at 31 December 2022 were presented as a net cash balance of £56.3m, these should also have been presented on a gross basis with Cash and cash equivalents of £64.5m and Current borrowings of £8.2m.

8. Defined Benefit Pension Scheme

The Group operates a defined benefit plan in the UK. A full actuarial valuation was carried out on 5 April 2023 and updated at 31 December 2024 by an independent qualified actuary.

A summary of the pension surplus position is provided below:


Pension surplus	£'000
At 1 January 2024	4,014
Current service cost	(12)
Scheme administrative expenses	(51)
Net interest income	180
Actuarial losses	(434)
Contributions by employer	24
At 31 December 2024	3,721

9. Dividends

The final dividend proposed is 17.1p, which will become ex-dividend on the 20 March 2025 and paid, subject to shareholder approval to all shareholders on the register on 21 March 2025 , on 1 May 2025.

Annual Report and Accounts

The Annual Report and Accounts will be mailed to shareholders and made available on our website during March 2025. Copies will be available after that date from: The Secretary, Nichols plc, Laurel House, Woodlands Park, Ashton Road, Newton-le-Willows, WA12 0HH.

Cautionary Statement

This Preliminary Report has been prepared solely to provide additional information to shareholders to assess the Group's strategies and the potential for those strategies to succeed. The Preliminary Report should not be relied on by any other party or for any other purpose.

-Ends-

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