Nichols to sell food business
British soft drinks group Nichols today announced plans to offload its food manufacturing arm to focus on selling products such as Vimto and Sunkist.
Nichols, based in Merseyside, said it had received an offer for Nichols Foods from its managing director, one of the original founders of the division.
It came as the group posted a 10.4% increase in underlying half-yearly profits, despite competitive trading.
Chairman John Nichols said sales of its flagship soft drink Vimto, which the company developed as a health tonic in Manchester in 1908, boosted solid progress in the half year to June 30.
“Market conditions remain extremely competitive, but trading is currently in line with our expectations,” he said.
As well as its soft drinks operation, Nichols has a food products and beverage systems division, which includes hot drinks systems supplier Balmoral, Cabana draught soft drinks and Nichols Foods.
The move to sell Nichols Foods – which makes products such as coffee, chocolate and whiteners for the vending, food-service and retail markets – will see Nichols exit the manufacturing industry.
It is the latest stage in a restructuring that saw the group start outsourcing the manufacturing of Vimto and Sunkist earlier this year.
The company said it was confident Nichols would emerge a more focused business as a result of the proposed sale.
Newco, a group set up by managing director Gary Unsworth, made the conditional offer. Mr Unsworth is stepping down from Nichols with immediate effect.
Mr Nichols said all 350 staff employed at the division in Haydock, Merseyside, would continue working for the new company.
A fall in sales to £46.9m (€70.1m) from £47.8m (€71.4m) was mainly due to the transfer of its contract packing operation from Stockport to Haydock.
At the bottom line pre-tax profits came in at £2m (€3m) against losses of £2.2m (€3.3m), due to the group being hit by nearly £4m (€6m) of exceptional costs last year.
The interim dividend was raised by 9% to 3.67p. Shares rose 3.5p to 144.5p.
