Nichols (AIM:NICL), the diversified soft drinks group behind Vimto, raised its interim dividend by 34.7% to 20.2p per share for the half year ended 30 June, reflecting a revised dividend cover policy of 1.5 times adjusted earnings.
Group revenue rose 4.7% to £89.5m, up from £85.5m a year earlier, with growth across all three routes to market.
International revenue was the standout, up 12.8% to £22m, driven by a 17.2% jump in Africa as the group's shift to a margin-enhancing concentrate model continued, alongside a successful Ramadan trading period in the Middle East.
UK Packaged revenue grew 2.3% to £48.1m on distribution wins and momentum in Vimto Energy, while Out of Home revenue edged up 1.6% to £19.3m, helped by new accounts including Rudy's Pizzerias.
Adjusted operating profit rose 3.7% to £14.1m, with margin steady at 15.8%, and adjusted pre-tax profit increased 2.7% to £15m.
No exceptional costs were recognised in the period, against £3.2m a year earlier, following completion of the group's ERP programme.
Cash and cash equivalents reached £66.2m, up from £55.7m at the end of December, with free cash flow rising to £17.3m on the back of record first-half operating cash flow.
"Reflecting our earnings growth and revised dividend cover policy of 1.5 times, the Board has increased the interim dividend by 35%", said chief executive Andrew Milne.
The board said full-year performance is expected to be in line with current market expectations, which put consensus adjusted pre-tax profit at £35.1m for the 2026 financial year.
News Intelligence what this means for the company
Nichols reported first-half revenue growth of 4.7% to £89.5m with all three distribution channels expanding, and raised its interim dividend 34.7% to 20.2p per share on the back of record cash generation (£17.3m free cash flow) and a revised, more shareholder-friendly dividend cover policy of 1.5x adjusted earnings. International revenue accelerated 12.8% with Africa up 17.2%, while the company maintained full-year guidance aligned with consensus expectations of £35.1m adjusted pre-tax profit.
The combination of accelerating international growth (particularly Africa's 17.2% jump), steady operating margins at 15.8%, and a material cash position of £66.2m—now deployed more aggressively to shareholders via a 35% dividend lift—suggests the company is confident in sustaining earnings growth while returning capital. The shift to a margin-enhancing concentrate model in Africa and successful Ramadan trading provide near-term tailwinds, though the full-year guidance reiteration signals management expects no material upside surprises.
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