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Exporting leads sales growth at Vimto maker

An increase in exporting has resulted in a £4.9m rise in sales at Liverpool-based Vimto maker Nichols.

In its interim results for the six months to 30 June 2012, the plc posted revenues of £55.3m, up from £50.4m in 2011, while operating profit climbed from £7.25m to £8.28m.

Pre-tax profit was up to £8.25m from £7.23m and overall profit for the six months rose to £6.21m from £5.36m.

Nichols' brands include Dragons' Den entrepreneur Levi Roots, Weight Watches and Sunkist while Vimto is sold in more than 65 countries.

Chairman John Nichols said the period had seen a healthly sales growth and strong cash generation despite the poor weather and economic uncertainty.

"Sales growth has again been delivered across all our routes to market, led by our export sales which recorded a 14 per cent increase on last year," he said.

"Given the ongoing economic uncertainty, the UK retail environment in particular continues to be challenging resulting in an extremely competitive UK soft drinks market.

"Notwithstanding this, our UK business achieved solid sales growth of more then eight per cent.

"Net cash generation was also very strong resulting in our net cash position increasing by £3.5m from the year end to £23.6m as of 30 June 2012."

The report said the growth in the UK market had been driven by the Vimto brand and investment in new products under the Levi Roots and Weight Watchers brands, both of which have added incremental sales.

It said a combination of increased promotional activity and raw material cost inflation continued to exert pressure on UK gross margins but ongoing productivity improvements and the strength of the international business allowed it to maintain our group operating profit margins of 15 per cent.

Earlier this year, the company also won a Queen's Award for International Trade.

Source: www.insidermedia.com – 26 July 2012