REG - Nichols PLC - 2025 Interim Results
Thu 07:01
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RNS Number : 2773T Nichols PLC 31 July 2025
31 July 2025
(the "Company" or the "Group")
2025 INTERIM RESULTS
Continued delivery against strategic plan.
FY25 Adjusted PBT expected to be in line with market expectations.
Nichols plc, the diversified soft drinks Group, is pleased to announce its
unaudited Interim Results for the half year ended 30 June 2025 (the 'Period'),
with Adjusted PBT during the Period continuing to progress in line with
expectations, reflecting the ongoing delivery of the Group's strategic
priorities.
Key Financials
Half year ended Half year ended
30 June 2025 30 June 2024 Movement
Group Revenue £85.5m £84.0m +1.8%
Adjusted Operating Profit(1) £13.6m £13.1m +4.1%
Adjusted Operating Profit Margin(1) 15.9% 15.6% +30bps
Adjusted Profit Before Tax (PBT)(1) £14.6m £14.5m +0.8%
Adjusted PBT Margin(1) 17.1% 17.3% (20bps)
Adjusted EBITDA(2) £14.3m £14.1m +1.1%
Operating Profit £10.4m £10.4m +0.3%
Operating Profit Margin 12.2% 12.4% (20bps)
Profit Before Tax (PBT) £11.4m £11.8m (3.3%)
PBT Margin 13.4% 14.1% (70bps)
EBITDA(3) £11.1m £11.4m (2.9%)
Adjusted Earnings per Share (basic)(1) 29.90p 29.87p +0.1%
Earnings per Share (basic) 23.33p 24.29p (4.0%)
Cash and Cash Equivalents £61.6m £70.3m (£8.7m)
Free cash flow(4) £14.2m £9.0m £5.2m
Adjusted Return on capital employed(5) 30.4% 27.1% +330bps
Return on capital employed(6) 22.7% 23.3% (60bps)
Interim Ordinary Dividend per share 15.0p 14.9p +0.7%
Special Dividend per share - 54.8p -
Andrew Milne, Chief Executive Officer of Nichols, commented:
"We are pleased to have delivered further progress against our growth strategy
in the first half of the year. Our UK Packaged business performed well, driven
by distribution gains and exciting product innovation, including our new
functional squash, Wonderfuel. In Africa, the strategic transition to a
concentrate model remains on track and continues to drive higher-margin
growth. The Group also expanded its footprint across several other key
international markets, including Malaysia where Vimto is now listed across all
major retailers nationwide. Internally, we successfully launched our new ERP
system, a key milestone in our business transformation programme, and are now
focused on realising the benefits of this investment in supporting our
long-term growth ambitions. I would like to thank all our teams for their
dedication in delivering this important project while maintaining strong
momentum across our growth initiatives.
Leveraging the strength of our brand portfolio, our geographically diverse
business model, and a robust balance sheet, we remain confident that Nichols
is well-positioned to deliver growth in line with our strategy and medium-term
financial objectives."
Financial highlights
· Group Revenue +1.8% at £85.5m (H1 2024: £84.0m)
- UK Packaged sales increased by +3.7% at £47.0m (H1 2024: £45.4m)
with encouraging volume growth from core products and innovation
- In line with expectations, International sales were down -2.5% at
£19.5m (H1 2024: £20.0m) due to the shift to the margin enhancing
concentrate model in Africa and phasing of Middle East shipments given earlier
timing of Ramadan. Strong progress continues in Africa delivering +16.9%
revenue growth (H1 2024: -10.1%)
- Out of Home +1.9% at £19.0m (H1 2024: £18.6m) in line with
expectations. Further simplification of our operating model and profit focus
led to the exit from Starslush business
· Gross margin maintained at 44.1% (H1 2024: 44.0%)
- Gross profit increased by £0.7m reflecting UK and International
volume growth
- UK margin stable following increased promotional spend on new product
innovation including Wonderfuel
- International margin increased with further implementation of
concentrate model in West Africa
· Adjusted operating profit growth of +4.1% to £13.6m (H1 2024:
£13.1m)
- Improved revenue and gross profit
- Continued focus on cost and investment in Operations and supply chain
- Adjusted operating profit margin increased to 15.9% (H1 2024: 15.6%)
· Adjusted profit before tax growth of +0.8% to £14.6m (H1 2024
£14.5m)
- Improved operating profit and lower interest income
- Adjusted profit before tax margin of 17.1% (H1 2024: 17.3%)
· Exceptional costs of £3.2m (H1 2024: £2.7m)
- Further investment in the Group's business change programme and new
ERP system
· Strong net cash and cash equivalents at £61.6m (H1 2024: £70.3m,
31 December 2024: £53.7m)
- Free cash flow of £14.2m (H1 2024: £9.0m) driven by lower working
capital requirements
- Reduced net interest income of £1.0m (H1 2024: £1.4m) following
£20m special dividend paid in H2 2024
- Robust balance sheet allows for on-going delivery against stated
growth objectives and capital allocation priorities
· Interim dividend of 15.0p (H1 2024: 14.9p with additional Special
dividend of 54.8p per share)
Strategic highlights
UK Packaged
· Market share growth in the UK driven by both ready to drink (RTD) and
Energy categories
· Encouraging volume growth from both core business and new product
innovation
International Packaged
· Continued strong growth in Africa driven by additional investment and
implementation of higher margin concentrate model
· Product innovation continues in Middle East to grow share in
established markets
· Malaysia launch supporting strategic geographic expansion plan
Out of Home (OoH)
· Further simplification of model with planned exit from Starslush brand
· Maintained profitability, with OoH performance continuing to support
the Group's overall growth strategy
Operations
· Successful launch of SAP ERP system to improve the efficiency and
effectiveness of Group operations
· Further investment in Supply Chain in line with strategic growth
ambitions
Outlook
· The Board remains confident in Nichols' ability to deliver further
strategic progress in the second half, in line with the Group's medium-term
financial ambitions
· Full year adjusted profit before tax is expected to be in line with
current market expectations(7)
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)
(7 Current market expectations refers to Group compiled market consensus for
FY 2025 Adjusted PBT of £33.1m at 30 July 2025)
( )
Contacts
Nichols plc 0192 522 2222
Andrew Milne, Chief Executive Officer
David Taylor, Interim Finance Director
Singer Capital Markets (Nominated Adviser and Broker) 0207 496 3000
Jen Boorer
Tom Salvesen Website: www.singercm.com (http://www.singercm.com)
Oliver Platts
Berenberg (Joint Broker) 0203 207 7800
Clayton Bush
Alix Mecklenburg-Solodkoff Website: www.berenberg.de (http://www.berenberg.de)
Hudson Sandler (Financial PR) 0207 796 4133
Alex Brennan
Hattie Dreyfus Email: nichols@hudsonsandler.com (mailto:nichols@hudsonsandler.com)
Harry Griffiths
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/
(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.
Executive Review
Overview
I am pleased to report another period of encouraging strategic progress for
Nichols in the first half of 2025, resulting in profit growth in line with the
Board's expectations. This outcome has been enabled by our focused growth plan
and continued product innovation which has offset the continuing backdrop of
economic uncertainty and volatility across several of our markets. On behalf
of the Board, I would like to thank all our people and our partners for their
contributions during the Period.
In the first six months of the year, we made considerable progress against a
number of the key components of our growth strategy, aimed at supporting the
delivery of our medium-term financial ambitions as outlined at 2024's Capital
Markets Day. In our Packaged business we continued to develop our
International footprint, particularly in Africa where the roll-out of our
concentrate model to additional markets is driving improved margin growth. Our
UK business continued to grow, both in our core products and through
innovation such as Wonderfuel and Energy. In Out of Home the changes made to
simplify our business model continue to support the overall profitable growth
of the Group.
Internally our new ERP system, a major part of our business change programme,
was successfully launched. This has been a key area of focus across the
business for the past two years. We are now focussed on realising the benefits
of this investment in supporting our growth plan.
Summary Financial Performance
Group Revenue increased by 1.8% to £85.5m (H1 2024: £84.0m), predominantly
as a result of higher volumes in all three of our routes to market.
Gross margins were maintained despite increased promotional activity in the UK
linked to new product innovation during the period.
Adjusted Operating Profit increased by 4.1% to £13.6m (H1 2024: £13.1m) with
a higher level of absolute Gross Profit offsetting increases in Distribution
and Administrative expenses. Our Adjusted Operating Margin increased from
15.6% to 15.9% as we progressed our plans to deliver shareholder value by
creating a higher margin business.
Adjusted Profit before Tax rose by 0.8% to £14.6m, with interest income
£0.4m lower at £1.0m (H1 2024: £1.4m) as interest rates reduced on a lower
average cash balance compared with the prior period after the payment of last
year's £20m special dividend in H2 2024.
Adjusted Profit before Tax margins were broadly in line with H1 2024 at 17.1%
(H1 2024: 17.3%) with the slight decrease being attributable to lower interest
income. The Group's medium-term ambition, as set out in our 2024 Capital
Markets Day, is the delivery of a Profit before Tax margin of 20%.
After net exceptional costs of £3.2m in relation to our business and systems
change project, Operating Profit was £10.4 and Profit before Tax was £11.4m
(H1 2024 £11.8m).
Adjusted earnings per share ('Adjusted EPS') was maintained at 29.90p (H1
2024: 29.87p). Earnings per share were 23.33p (H1 2024: 24.29p). The estimated
tax rate for the period increased from 24.8% in the first half of 2024 to
25.3%.
We have continued our record of strong cash generation during the first half
of the year with Cash Generated from Operating Activities increasing to
£17.6m (H1 2024: £11.2m), principally as a result of lower working capital
utilisation in the period. Capital expenditure in the Period was £0.2m (H1
2024: £0.1m). Net Cash and Cash Equivalents increased by £7.9m (H1 2024:
£3.3m) to £61.6m as at 30 June 2025 (H1 2024: £70.3m, 2024 FY: £53.7m).
Adjusted Return on Capital grew to 30.4% (H1 2024: 27.1%) principally as a
result of higher Adjusted Operating Profit, but also reflecting improved
balance sheet efficiency following 2024's Special Dividend payment.
Dividend and Capital Allocation
In 2024 we confirmed our Dividend and Capital Allocation policy, balancing
forward investment into organic growth opportunities and the maintenance of a
strong balance sheet with the distribution of surplus cash and generation of
strong returns to investors. We have maintained a distribution policy of
paying an ordinary dividend with cover of approximately 2.0x the adjusted
earnings of the Group together with the return of surplus cash to
shareholders. This policy has been maintained at the first half year and we
are pleased to declare an ordinary dividend of 15.0p per ordinary share (H1
2024: 14.9p), to be paid on 12 September 2025 with a record date of 8 August
2025 and an ex-dividend date of 7 August 2025.
Strategy
We have made further progress in the implementation of the growth strategy
outlined at our Capital Markets Day in November 2024. This strategy is
focussed on accelerating growth in our core Packaged business both in the UK
and internationally through continued innovation, increased distribution,
geographic expansion, and brand investment. At the same time, we are focused
on driving bottom line value from our Out of Home business.
Alongside our prioritisation of delivering organic growth initiatives, we will
continue to selectively appraise M&A opportunities that provide the Group
with exposure to growth categories that complement our existing business and
strategic priorities.
Across the Group's diversified business model, we remain focused on delivering
exceptional products to consumers and a best-in-class service to our
customers.
Business Performance
Packaged Business - Total
Overall sales in Packaged increased by 1.8% to £66.5m (H1 2024: £65.4m).
Operating Profit increased by £0.5m to £19.3m (H1 2024: £18.8m) with
additional contribution from International after further investment in sales
and marketing resource and a further contribution from the UK where we
continue to support our revenue growth with promotional spend. Operating
margins in Packaged increased to 29.1% (H1 2024 28.7%).
International Packaged
We are pleased with the performance of our International Packaged business,
which continues to be a primary growth driver within our overall strategic
plan. In the first half year the initiatives we have implemented to develop
our African business model have continued to deliver strong returns. Our aim
remains to create a broader based and high margin International business over
the medium term and we have made important progress towards this during 2025
to date. Overall International revenue was £19.5m (H1 2024: £20.0m).
African revenue increased by 16.9% to £13.7m (H1 2024: £11.8m). On a like
for like basis, after adjusting for the effect of the shift towards
concentrate from finished product sales, underlying growth was even stronger.
The first stage of the planned move to local manufacture in Senegal was
completed during 2024 and we continue to see progress in the second phase of
this project, which we expect to come online in the next two years. We have
invested in marketing resource and expenditure in West Africa to support this
strategic move.
As expected, revenue in the Middle East reduced in the first half year
following a high level of product shipments to the region in 2024 in
anticipation of an earlier 2025 Ramadan season. Sales in H1 2025 were £1.6m
(H1 2024: £3.5m). We currently anticipate sales in H2 2025 will be broadly
similar to H2 2024.
Revenues across the Rest of the World, including Europe, North America and the
Far East were £4.1m (H1 2024: £4.8m). We expect to deliver a strong sales
performance in H2.
UK Packaged (UKP)
Revenue in UKP increased by 3.7% to £47.0m (H1 2024: £45.4m), with increased
volume, up 5.0%, from both new product launches and our core business,
reflecting particular success in our target categories of Energy and Ready to
Drink products.
In line with our focus on new product innovation, we successfully launched our
Wonderfuel product, a new 'functional' squash fortified with vitamins and
minerals, in March with dedicated multichannel promotions. This, alongside
growth in our core product range and through wider distribution gains has
played an important role in supporting our UK growth.
Out of Home
Following strong trading progress in 2024 from the Out of Home business we are
pleased to have maintained our performance in the first half of 2025 with
overall growth in revenue and a further simplification of our operating model
allowing additional focus on profit generation. We have now exited our
remaining Starslush customers, leaving our Slush business focused on the ICEE
product in Cinema outlets only. We expect to make further progress in the
second half of the year.
Revenue in the first half of the year increased by 1.9% to £19.0m (H1 2024:
£18.6m), with Operating Profit increasing slightly in the period at £3.1m
(H1 2024: £3.0m) reflecting a change in the mix of our sales and some one-off
costs. Operating margins in the period increased from 15.9% to 16. 5%.
Central overheads
Group Central overheads increased to £8.8m (H1 2024 £8.7m) with additional
investment in IT support and operational personnel balanced by a reduction in
other cost areas. This figure also includes increased staff costs in the
second quarter reflecting higher rates of national insurance.
We are pleased with the progress of our major business change programme. This
project, combining both the implementation of a new SAP ERP system and a
substantial organisational re-design to improve the efficiency and
effectiveness of our operations, will provide a platform for us to achieve our
medium and long-term strategic and financial ambitions.
Board succession
The search process for a new Chief Financial Officer is well underway. The
Board expects to confirm the appointment of the successful candidate in due
course.
John Gittins, currently Non-Executive Director and Chair of the Audit
Committee, will retire from the Board today following the completion of ten
years of service to the Group. We would like to place on record our sincere
thanks to John for his work and for his support over that time, covering a
period of substantial change within the business. We wish John well in his
continuing career.
John will be succeeded as Audit Committee Chair by Alan Williams who was
appointed to the Board in March 2025.
Outlook
In first half of 2025 Nichols has delivered another pleasing performance in
line with the Board's expectations and the strategic plans and medium-term
financial ambitions articulated at our Capital Markets Day in November 2024.
We have grown volumes in our UK and International Packaged businesses through
increasing distribution and product innovation, and we continue to benefit
from improved profitability and focus in Out of Home.
The Board is mindful of continued economic uncertainty both in the UK and
wider export markets, including lower levels of business confidence, the
potential impact of renewed inflation and changes to taxation. However, we are
confident that we operate a robust, well diversified, business and that the
progress we have made in the implementation of our strategy provides us with
confidence in the future.
We anticipate that the business will continue to perform well in the second
half of the year and expect to report full year Revenue and Adjusted Profit
before Tax(1) in line with current market expectations(2).
(1) Excluding exceptional items.
(2) FY25 expectations refers to Group compiled market consensus for FY 2025
Adjusted PBT of £33.1m at 30 July 2025.
CONSOLIDATED INCOME STATEMENT
Unaudited Unaudited Audited
Half year to Half year to Year ended
30 June 30 June 31 December 2024
2025 2024 £'000
£'000 £'000
Continuing operations
Revenue 85,488 83,976 172,809
Cost of sales (47,788) (47,021) (93,855)
Gross profit 37,700 36,955 78,954
Distribution expenses (5,502) (5,171) (10,214)
Administrative expenses (21,783) (21,402) (47,249)
Operating profit 10,415 10,382 21,491
Finance income 1,037 1,458 2,660
Finance expenses (39) (37) (117)
Profit before taxation 11,413 11,803 24,034
Taxation (2,887) (2,927) (6,196)
Profit for the Period 8,526 8,876 17,838
Earnings per share (basic) 23.33p 24.29p 48.84p
Earnings per share (diluted) 23.31p 24.28p 48.81p
Adjusted for exceptional items
Operating profit 10,415 10,382 21,491
Exceptional items 3,214 2,713 7,370
Adjusted operating profit 13,629 13,095 28,861
Profit before taxation 11,413 11,803 24,034
Exceptional items 3,214 2,713 7,370
Adjusted profit before taxation 14,627 14,516 31,404
Adjusted earnings per share (basic) 29.90p 29.87p 64.02p
Adjusted earnings per share (diluted) 29.87p 29.86p 63.98p
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Unaudited Half year to 30 June Unaudited Audited
2025 Half year to Year ended
31 December
£'000 30 June
2024
2024
£'000
£'000
Profit for the financial Period 8,526 8,876 17,838
Items that will not be classified subsequently to profit or loss:
Re-measurement of net defined benefit liability 174 (360) (434)
Deferred taxation on pension obligations and employee benefits (44) 90 95
Other comprehensive income/(expense) for the Period 130 (270) (339)
Total comprehensive income for the Period 8,656 8,606 17,499
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
30 June 30 June 31 December
2025 2024 2024
ASSETS £'000 £'000 £'000
Non-current assets
Property, plant and equipment 8,596 8,773 8,743
Intangibles 137 215 175
Pension surplus 3,939 3,715 3,721
Total non-current assets 12,672 12,703 12,639
Current assets
Inventories 9,858 10,491 9,322
Trade and other receivables 44,828 42,205 44,340
Corporation tax receivable 679 - -
Cash and cash equivalents 61,586 75,973 55,185
Total current assets 116,951 128,669 108,847
Total assets 129,623 141,372 121,486
LIABILITIES
Current liabilities
Borrowings - 5,682 1,512
Trade and other payables 40,142 32,899 33,271
Corporation tax payable - 74 243
Total current liabilities 40,142 38,655 35,026
Non-current liabilities 1,680 1,801
Other payables 1,672
Deferred tax liabilities 787 626 743
Total non-current liabilities 2,467 2,427 2,415
Total liabilities 42,609 41,082
37,441
Net assets 87,014 100,290 84,045
EQUITY
Share capital 3,697 3,697 3,697
Share premium reserve 3,255 3,255 3,255
Capital redemption reserve 1,209 1,209 1,209
Other reserves 3,030 2,151 2,471
Retained earnings 75,823 89,978 73,413
Total equity 87,014 100,290 84,045
CONSOLIDATED STATEMENT OF CASH FLOWS
Unaudited Unaudited Audited
Half year to Half year to Year ended
30 June 30 June 31 December
2025 2024 2024
£'000 £'000 £'000 £'000 £'000 £'000
Cash flows from operating activities
Profit for the financial Period 8,526 8,876 17,838
Adjustments for:
Depreciation and amortisation 711 975 1,909
(Profit) / loss on sale of property, plant and equipment (55) 56 52
Finance income (939) (1,458) (2,480)
Finance expense 39 37 117
Tax expense recognised in the income statement 2,887 2,927 6,196
(Increase)/decrease in inventories (536) (1,682) (513)
Increase in trade and other receivables (273) (405) (2,984)
Increase/(decrease) in trade and other payables 7,286 1,971 2,549
Charge for share-based payments - - 272
Change in pension obligations (44) (61) 39
Fair value gain on derivative financial instruments (30)
(47) 37
9,029 2,330
5,194
Cash generated from operating activities 17,555 11,206 23,032
(3,813) (3,171) (6,131)
Tax paid
13,742 8,035 16,901
Net cash generated from operating activities
Cash flows from investing activities
Finance income 939 1,458 2,480
Acquisition of property, plant and equipment (174) (146) (851)
Proceeds from sale of property, plant and equipment 225 15 18
Net cash from investing activities 990 1,327 1,647
Cash flows from financing activities (573) (409) (755)
Payment of lease liabilities
Dividends paid (6,246) (5,692) (31,153)
Net cash used in financing activities (6,819) (6,101) (31,908)
Net increase/(decrease) in cash and cash equivalents 7,913 3,261 (13,360)
Exchange gain on cash and cash equivalents - - 3
Cash and cash equivalents at start of Period 53,673 67,030 67,030
Cash and cash equivalents at end of Period 61,586 70,291 53,673
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Called up share capital Share premium reserve Capital redemption reserve Other reserves Retained earnings Total
£'000 £'000 £'000 equity
£'000 £'000
£'000
At 1 January 2024 3,697 3,255 1,209 1,845 87,336 97,342
Dividends - - - - (5,692) (5,692)
Movement in ESOT - - - 4 - 4
Share option exercise - - - - (272) (272)
Credit to equity for equity-settled share-based payments - - - 302 - 302
Transactions with owners - - - 306 (5,964) (5,658)
Profit for the Period - - - - 8,876 8,876
Other comprehensive income - - - - (270) (270)
Total comprehensive income - - - - 8,606 8,606
At 30 June 2024 3,697 3,255 1,209 2,151 89,978 100,290
Called up share capital Share premium reserve Capital redemption reserve Other reserves Retained earnings Total
£'000 £'000 £'000 equity
£'000 £'000
£'000
At 1 January 2025 3,697 3,255 1,209 2,471 73,413 84,045
Dividends - - - - (6,246) (6,246)
Movement in ESOT - - - (4) - (4)
Share option exercise - - - - - -
Credit to equity for equity-settled share-based payments - - - 563 - 563
Transactions with owners - - - 559 (6,246) (5,687)
Profit for the Period - - - - 8,526 8,526
Other comprehensive expense - - - - 130 130
Total comprehensive income - - - - 8,656 8,656
At 30 June 2025 3,697 3,255 1,209 3,030 75,823 87,014
Treasury shares used for share option exercises are held within retained
earnings.
NOTES
1. Basis of Preparation
The financial information set out in this Interim Report does not constitute
statutory accounts as defined in Section 434 of the Companies Act 2006. The
Group's statutory financial statements for the year ended 31 December 2024,
prepared in accordance with International Accounting Standards in conformity
with the requirements of the Companies Act 2006 have been filed with the
Registrar of Companies. The Auditor's Report on those financial statements was
unqualified and did not contain a statement under Section 498 (2) or (3) of
the Companies Act 2006.
These condensed consolidated interim financial statements for the half year
reporting period ended 30 June 2025 have been prepared in accordance with IAS
34 Interim financial reporting and also in accordance with the measurement and
recognition principles of UK adopted international accounting standards. The
Interim Report has not been audited or reviewed in accordance with the
International Standard on Review Engagement 2410 issued by the Auditing
Practices Board.
The interim financial statements were authorised for issue by the Board of
Directors on 30 July 2025.
2. Going Concern
In assessing the appropriateness of adopting the going concern basis in
preparing the Interim Report and financial statements, 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 continued economic uncertainty
both in the UK and wider export markets, including lower levels of business
confidence, the potential impact of renewed inflation and changes to taxation.
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 30 June 2025 the Group had cash and cash
equivalents of £61.6m 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 this Interim Report
and financial statements) 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.
Half year to Packaged
30 June 2025 UK Middle East Africa Rest of World Total Packaged Out of Home Total Segments Central(1) Total Group
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Revenue 47,045 1,623 13,735 4,106 66,509 18,979 85,488 - 85,488
Adjusted operating 19,341 3,129 22,470 (8,841) 13,629
profit
Net finance income 998
Adjusted profit before tax 14,627
Exceptional items (3,214)
Profit before tax 11,413
Half year to Packaged
30 June 2024 UK Middle East Africa Rest of World Total Packaged Out of Home Total Segments Central(1) Total Group
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Revenue 45,386 3,466 11,754 4,752 65,358 18,618 83,976 - 83,976
Adjusted operating profit 18,779 2,964 21,743 (8,648) 13,095
Net finance income 1,421
Adjusted profit before tax 14,516
Exceptional items (2,713)
Profit before tax 11,803
Year ended Packaged
31 December 2024 UK Middle East Africa Rest of World Total Packaged Out of Home Total Segments Central(1) 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
(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:
Half year to Half year to Year ended
30 June 30 June 31 December
2025 2024 2024
£'000 £'000 £'000
Geographical split of revenue
Middle East 1,623 3,466 14,213
Africa 13,735 11,754 20,793
Rest of World 4,278 4,852 8,950
Total exports 19,636 20,072 43,956
United Kingdom 65,852 63,904 128,853
Total revenue 85,488 83,976 172,809
4. Exceptional Items
Half year to Half year to Year ended
30 June 2025 30 June 31 December
2024 2024
£'000 £'000 £'000
Business Change Programme and Systems Development 3,214 2,733 7,603
Out of Home Strategic Review and Restructuring - 179 (34)
Historic incentive scheme - (199) (199)
3,214 2,713 7,370
The Group incurred £3.2m of exceptional costs during the Period (H1 2024:
£2.7m).
Business Change Programme and Systems Development
The Group successfully launched its new enterprise resource planning (ERP)
system in Q1. This project, combining both the implementation of a new SAP ERP
system and a substantial organisational re-design to improve the efficiency
and effectiveness of our operations, will provide a platform for us to achieve
our long-term ambitions. Costs of £3.2m were incurred in the Period. Further
investment in the Group's business change programme and systems development
will continue in H2.
Historic Incentive Scheme
In 2022 the Group settled with HMRC a £4.3m tax and interest charge relating
to an historic incentive scheme and has continued to recover debts from
current and previous employees who had indemnified the Company. The Group's
provisions relating to the recovery of these amounts remains unchanged from
the year end.
Out of Home Strategic Review and Restructuring
The strategic review into the Group's OoH business, which commenced in 2022,
concluded in the previous year. A net credit of under £0.1m was realised in
the previous year as the project concluded.
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:
Weighted average number of shares
Earnings Earnings per share
£'000
30 June 2025
Basic earnings per share 8,526 36,539,402 23.33p
Dilutive effect of share options 41,035
Diluted earnings per share 8,526 36,580,437 23.31p
Adjusted earnings per share before 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 Group's operations.
It can be reconciled from the basic earnings per share as follows:
Weighted average number of shares
Earnings Earnings per share
£'000
30 June 2025
Basic earnings per share 8,526 36,539,402 23.33p
Exceptional items after taxation 2,401
Adjusted basic earnings per share 10,927 36,539,402 29.90p
Diluted effect of share options 41,035
Adjusted diluted earnings per share 10,927 36,580,437 29.87p
6. Non-current Assets
Property, Plant & Equipment
Intangibles
£'000 £'000
Cost
At 1 January 2025 27,162 9,998
Additions 696 -
Disposals (537) -
At 30 June 2025 27,321 9,998
Depreciation and Amortisation
At 1 January 2025 18,419 9,823
Charge for the Period 673 38
On disposals (367) -
At 30 June 2025 18,725 9,861
Net book value
At 1 January 2025 8,743 175
At 30 June 2025 8,596 137
7. 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 30 June 2025 by an
independent qualified actuary.
A summary of the pension surplus position is provided below:
Pension surplus £'000
At 1 January 2025 3,721
Current service cost (5)
Scheme administrative expenses (61)
Net interest income 98
Actuarial gains 174
Contributions by employer 12
At 30 June 2025 3,939
8. Dividends
Dividend cover is broadly 2x adjusted earnings of the Group. As a result, the
interim dividend for 2025 will be 15.0p per share to be paid on 12 September
2025 with a record date of 8 August 2025. The ex-dividend date will be 7
August 2025.
Cautionary Statement
This Interim 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 Interim Report should not be relied on by any other
party or for any other purpose.
-Ends-
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