Nichols (LON:NICL) , the soft drinks group famed for its Vimto brand issued a reassuring AGM statement boosting the shares up 3% - that's about as good as it gets when the FTSE fall 25%! Despite demanding comparatives with 2009, which was “an exceptionally good year for the group”, sales in the new financial year are well ahead of last year (2009 £72m) and the group’s own internal expectations. Even the UK has joined the party with turnover significantly up and out-performing the market as a whole. The group has introduced a cherry flavoured version of its iconic Vimto brand . Vimto Cherry was launched in a carbonated format in January and to date sales have also significantly exceeded the group’s initial projections.
Unlike its giant peer’s Cherry Cola drink, Vimto Cherry is also available in dilute to taste format – maybe the boys from Atlanta could learn something, although I’m not sio sure about still cola! Internationally, Vimto has begun the year strongly and the company expects a similar trading pattern to last year with first half year sales benefiting from the slightly earlier timing of Ramadan in 2010 over 2009 - Middle East sales grew by 40% year on year last year. I admit to being unimpressed with the Vimto advertising and so are my children who aren’t keen on seeing cuddly berries squished on the ground after falling thousands of feet out of an airplane – can’t see the appeal in that one! The group’s Dispense Operation, which now includes the recently acquired Ben Shaws business, has also started the year well and, like the other parts of the Group, is also trading ahead of the Board’s expectations. Nichols is a tremendous generator of cash with net cash at the December year end of £11.2m available for further niche acquisitions and a balance sheet that is would the envy of many AIM companies. Let’s hope for a hot summer in the UK and plenty of Vimto guzzling – perhaps the gentleman in Omaha, famed for his love of Cherry Cola, might be tempted to try an alternative.
