Vimto owner Nichols suffers profit drop after ‘most challenging trading’ in 80 years
Nichols, the owner of Vimto, said it will take a £5m hit following the most “challenging trading period” in the out of home drinks sector for 80 years.
The company said group revenues fell to £118.7m due to restrictions on the out of home drinks sector, and gross profit dropped £20.4m, coming in at £49.6m.
Nichols said it incurred exceptional costs of £5.1m during the year, with £3.8m relating to its Feel Good brand, which was recently relaunched in the UK.
It also began a review of its UK packaged supply chain in the fourth quarter of last year, with costs so far of £300,000 expected to increase throughout this year.
Other costs related to redundancies following a review of its operational and leadership structures and early termination of an executive director’s contract.
The firm also announced it incurred bad debt provisioning and asset write-offs associated with the on-trade business totalling £1.9m due to the failure of smaller hospitality businesses to open after lockdowns.
Nichols said: “It has been the most challenging trading period in the on-trade sector for 80 years, but we believe consumer demand remains strong, with a clear willingness to re-engage in hospitality once restrictions eventually ease.”
Non-executive chairman John Nichols said: “Whilst recognising the current and near-term impact of the pandemic on the soft drinks market, the board continues to believe that Nichols, underpinned by the strength of the Vimto brand, the group’s diversified business model and the skill and commitment of our colleagues, remains well placed to deliver its long-term strategic ambitions.
“Given the continued near-term uncertainty, 2021 guidance remains withdrawn.”