Nichols (NICL) H1 2024 earnings summary

Executive summary

• Adjusted profit before tax grew 18% year-over-year to £14.5m, with strong earnings and cash generation.

• UK Packaged business saw volume growth of 4.9% and revenue growth of 5.3% compared to HY23.

• Group revenue declined 1.8% to £84.0m, reflecting planned rationalisation in Out of Home business.

• Special dividend of £20.0m (54.8p per share) and interim dividend up 18.3% to 14.9p per share announced.

• FY24 adjusted PBT expected to be slightly ahead of market expectations.

Financial highlights

• Adjusted operating profit £13.1m, up 14.1%; adjusted PBT £14.5m, up 18.0%.

• Group revenue £84.0m, down 1.8% year-over-year; UK Packaged revenue up 5.3%, International Packaged down 6.9%.

• Adjusted operating profit margin 15.6% (+220bps); adjusted PBT margin 17.3% (+290bps).

• Free cash flow £9.0m, up 65.4%; cash and cash equivalents £70.3m (+25.2%).

• Adjusted EPS (basic) 29.87p, up 16.2%; interim dividend 14.9p (+18.3%), special dividend 54.8p.

Outlook and guidance

• FY24 adjusted PBT expected to be slightly ahead of consensus (£28.8m as of July 2024).

• Trading in Q3 has started positively and in line with management expectations.

• Strong growth in Africa anticipated due to local can production; first launch into Malaysia planned.

• Continued focus on acquisitions in UK Packaged market and delivery of Business Transformation Programme.

• Board remains confident in delivering long-term strategic ambitions despite consumer spending pressures.