Vimto maker Nichols sees revenues slump as Covid hospitality closures hit trade

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Naomi Ackerman
·2 min read
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<p>The company also owns the Levi Roots and Sunkist drinks (PR Image)</p> (Nichols)

The company also owns the Levi Roots and Sunkist drinks (PR Image)

(Nichols)

Vimto maker Nichols saw revenues fall 19% to £118.7 million last year as Covid hospitality closures hit trade, the AIM-listed firm revealed today.

Nichols, which also owns the Sunkist and Levi Roots drinks, released 2020 preliminary results showing UK revenues fell by 22% to £91.6 million, driven by a 61% fall in hospitality sector sales.

The company saw a pre-tax profit fall of almost 80% on the prior year to £6.5 million. Finance chief David Rattigan said it cams as the company “protected its investment” in operations which usually serve its so-called out-of-home market, where the firm supplies dispensed soft drinks, slushes and coffee products.

Chief executive Andrew Milne, who took up the post on January 1 after former boss Marnie Millard stepped down, said: “We are still a profitable group with a very healthy balance sheet, which I think puts us in a good position to weather further challenges, and also potential opportunities.”

Nichols has reduced spending and carried out a review of its business since the pandemic hit. Non-executive chairman John Nichols said the firm’s diversified business model has helped ensure “a resilient financial performance in the period.”

It came as the Chancellor got set to announce the landmark Coronavirus Job Retention Scheme is to be extended until the end of September. Nichols still has some factory employees furloughed.

Milne said: “From our point of view, the most important thing to have from the Government is a really clear roadmap about how the hospitality industry is going to open up. It’s crucial.

“Clearly one of the biggest concerns is that some of these [hospitality] businesses don’t survive when the furlough scheme ends, so the decision to extend is a really positive one because it allows the hospitality industry to open up and keep trading.”

Rob Pitcher, chief executive of Revolution Bars, said that the extension of the furlough scheme is a “vital ingredient in helping the hospitality industry build back from the brink”.

David Moore, owner or Fitzrovia’s Pied à Terre, said the five-month extension “currently feels like the right length of time”.

Paul Simbler, co-founder of London chain Hob Salons, said: “It will enable us to bring people back to work at a pace that’s affordable to the business. It also allows flexibility to bring people back part time to start if needed in different parts of the business.”

Nichols said it was not issuing 2021 guidance “given the continued near-term uncertainty”.

The firm’s shares were down 2% in early trading