Why soaring Middle East sales couldn’t help Vimto

THE UK’s love affair with sugar-filled fizzy drinks sent profits at Vimto-owner Nichols soaring yesterday.

In its results for the first half of the year, Nichols saw year-on-year revenues increase by 12.4pc to £63.5m while profits jumped 7.1pc to £12.7m.

The firm, which also owns the Levi Roots and Sunkist brands, said sales of Vimto in the UK grew 10pc year-on-year over the period, vastly outperforming the 2.9pc growth recorded by the total soft drinks market.

The drink has also proved a hit in the Middle East, with sales in the region up 19.8pc year-on-year, while sales in Africa jumped by 30.9pc, helping total international revenues increase 33.5pc to £16m.

Despite this, non- executive chairman John Nichols said the outlook for the UK market is expected to remain ‘challenging’.

The strong performance led the firm to increase its dividend by 12.2pc to 10.1p per share.

Analysts at N+1 Singer upgraded its earnings per share outlook for Nichols in 2018 and 2019 by 3pc and 4pc respectively. Likewise, Numis raised its target price for Nichols to 1890p from 1620p.

But Investec cut the firm to ‘sell’ from ‘reduce’, leading shares to decline 3.1pc, or 57.5p, to 1815p.

The FTSE enjoyed another strong day of trading, up 0.77pc, or 56.96 points, to 7487.87.

It was lifted by equipment hire firm Ashtead, which rose 3.1pc, or 51p, to 1710p after results at its key US peer URI smashed expectations. Ashtead, which hires out diggers and tools, gets more than 80pc of its revenue from the US.

Luxury clothes retailer Burberry enjoyed a strong day after announcing plans to buy back £150m of its shares by November.

It is a display of strength under new chief executive Marco Gobbetti following a roller- coaster ride for investors in the face of boardroom uncertainty and shelved plans for new factories. Shares rose 0.6pc, or 9p, to 1655p.

Kitchen fitter Howden Joinery saw profits decline by 12pc over the first half of the year.

Despite profits falling from £74.8m to £65.5m, revenues rose to £553m from £528.9m.

Howden said although markets are stabilising it has been hit by the ongoing weakness of the pound, a lack of demand for its services in London, and economic uncertainty. The firm is also set to take a £20m hit from the weak pound and a £20m pension cost.

Despite maintaining its ‘ hold’ rating, analysts at Davy praised Howden for ‘ impressively’ navigating a difficult market. Shares rose 0.8pc, or 3.6p, to 432.8p. Farming equipment maker

Carr’s Group rose after reporting a continuing recovery in the UK agriculture sector, and a recovery in the US farm market.

In an update for the 19 weeks ended July 16, Carr’s said all aspects of its UK agriculture operations were now ahead of 2016.

The firm sells feed blocks for livestock, farm machinery and runs a UK network of rural stores as well as designing and making equipment for energy industries.

Shares rose 2.4pc, or 3.25p, to 140.12p, topping the FTSE Small Cap index.

Meat packers Hilton Food Group fell 1.5pc, or 11p, to 715.5p, despite ‘a good start to the barbecue season’ in the UK and strong sales in Sweden and Ireland. It was held up by weakness in Holland and central Europe where operations have been hit by start-up costs and a challenging market.

Peel Hotels, which runs hotels in the UK, fell 20.4pc, or 27.5p, to 107.5p, after a 1.3pc drop in turnover. It said it was difficult to forecast full-year results as performance is highly dependent on tourists taking ‘ staycations’ because of the weak pound.