Nichols PLC Annual Report 2012

FY2012 Annual Report · Nichols PLC
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ANNUAL
REPORT &
FINANCIAL
STATEMENTS
2012

NICHOLS PLC
IS A HIGHLY FOCUSED
SOFT DRINKS BUSINESS; 
THE GROUP HAS A 
LEADING MARKET
POSITION IN BOTH THE 
STILL AND CARBONATE 
DRINKS CATEGORIES. 
ITS BRAND PORTFOLIO 
INCLUDES
VIMTO, WHICH IS SOLD IN
OVER 65 COUNTRIES AND
LEVI ROOTS, WEIGHT 
WATCHERS, SUNKIST
& PANDA WHICH ARE
SOLD IN THE UK. 

THE
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CHAIRMAN’S STATEMENT

CHIEF EXECUTIVE’S REVIEW

FINANCIAL REVIEW

DIRECTORS & ADVISORS

DIRECTORS’ REPORT

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19

48

51

AUDITOR’S REPORT

FINANCIAL STATEMENTS

NOTICE OF MEETING

FINANCIAL CALENDAR

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“The Group
again 
outperformed
the market, 
delivering EPS 
growth of 14%, 
proﬁ t growth 
of 13% and 
increasing
its cash
reserves”

JOHN NICHOLS
NON-EXECUTIVE CHAIRMAN

I am pleased to report that 2012 
was another very strong year for 
Nichols plc. Once again we have 
delivered double digit growth in 
proﬁ t, earnings per share and cash.

Group sales increased to £107.8m, 
up 9% on 2011, an excellent 
performance against our own 
tough prior year comparatives 

and the challenging UK retail 
environment. Continued high levels 
of raw material inﬂ ation impacted 
our UK gross margins; however, 
the sales growth combined with 
strong cost control led to increased 
operating margins. Overall the 
Group delivered a 13% increase 
in proﬁ t, with proﬁ t before tax of 
£20.5m, a £2.4m increase on 2011. 

As a result, earnings per share 
increased 14% to 41.4p.

4
0

Year ended 
31 Dec 2012 
£m  

Year ended 
31 Dec 2011 
£m 

% movement 

Group Revenue 
Operating Proﬁt 
Operating Proﬁt R.O.S. 
Proﬁt Before Tax  
Net Cash 

EPS (basic) (pence) 

107.8 
20.5 
19% 
20.5 
24.7 

41.4p 

98.9 
18.1 
18% 
18.1 
20.1 

36.3p 

+9% 
+13% 

+13% 
+23% 

+14%

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TRADING

Continuing the trend of recent 
years, sales growth has been 
delivered from both our domestic 
and export businesses. 

Our UK sales grew 9% in 2012 to 
£85m, outperforming the UK soft 
drinks market which grew 3%
(AC Nielsen 52 week data to 5 Jan 
2013). The growth was driven by a 
strong performance from our core 
Vimto brand and our innovative 
new products such as Levi Roots 
and the recently launched Weight 
Watchers range of soft drinks. 

Export sales totalled £22.7m in the 
year, up 8% against the prior year’s 
tough comparatives (2011 +31%). 
Within the regions, the momentum 
in Africa continued with sales up 
22% (2011 +28%) and sales into 
mainland Europe also increased 
by 24%. Sales into the Middle East 
region were broadly ﬂat on last 
year partly due to the timing of 
shipments at the end of 2012 as 
well as the strong comparatives 
from the prior year (2011 +24%).

DIVIDEND

Following another strong 
performance and reﬂecting 
conﬁdence in the outlook, the 

Board is pleased to recommend 
a ﬁnal dividend of 11.7 pence per 
share. This takes the total 2012 
dividend to 17.32 pence (2011: 
15.30 pence), an increase of 13%. 
If approved, the ﬁnal dividend 
will be paid on 3 May 2013 to 
shareholders registered on 2 April 
2013; the ex-dividend date is 27 
March 2013.

SUCCESSION 
ANNOUNCEMENT

We have announced that after 
ten successful years with the 
Group, Brendan Hynes, Chief 
Executive Ofﬁcer, has informed 
the Board of his intention to step 
down at the AGM on 1 May 2013, 
in order to pursue a non-executive 
portfolio career. He will hand over 
the leadership of the business to 
Marnie Millard from the date of the 
AGM. Marnie is currently Managing 
Director of our UK Soft Drinks 
business. To ensure a seamless 
transition, Brendan will be available 
to assist with the handover through 
to the end of 2013.

The Board would like to thank 
Brendan for his contribution, which 
has helped to ensure that the 
business has made consistently 
strong progress during the last ten 
years.

OUTLOOK

2012 was extremely challenging 
for the UK soft drinks market and 
the broader grocery market as 
consumer spending was restrained 
by the economic environment. 
The industry also had to deal 
with the effects of the second 
wettest summer on record, further 
dampening demand for soft drinks. 
Against this backdrop, the Group 
again outperformed the market, 
delivering EPS growth of 14%, proﬁt 
growth of 13% and increasing its 
cash reserves.

Although we anticipate the UK 
retail environment will be just 
as challenging in 2013, we are 
conﬁdent that the Group will 
again outperform the market with 
continued investment behind our 
brands, launching innovative new 
products and further growth in our 
international markets.

In summary, the Board is conﬁdent 
that the Group is in a strong 
position to deliver further proﬁtable 
growth in 2013 and beyond.

JOHN NICHOLS
NON-EXECUTIVE CHAIRMAN
6 MARCH 2013

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“We have
once again 
been successful 
in growing our 
share of both 
the UK and 
international 
markets”

BRENDAN HYNES
CHIEF EXECUTIVE OFFICER

Nichols plc is a growing 
international business with an 
enviable stable of brands, selling 
to over 65 countries worldwide. 
We have leading market positions 
in both the still and carbonate 
drinks categories and continuously 
seek to bring new and innovative 
products to the soft drinks market 
both in the UK and internationally.

In 2012, Nichols plc was delighted 
to be awarded the prestigious 
Queen’s Award for International 
Trade. This award is made annually 

to businesses achieving substantial 
overseas growth for a sustainable 
period by Her Majesty the Queen.

THE UK SOFT DRINKS 
MARKET

In overall terms the UK soft drinks 
market, excluding the on-trade, 
grew by 3.0% in value terms but 
declined 1.0 % in volume terms 
(AC Nielsen 52 week data to 5 Jan 
2013).  Economic and consumer 
conditions continued to provide 
a big challenge, particularly in the 
UK.  This, combined with signiﬁ cant 

raw material cost inﬂ ation and 
continued high levels of price 
promotion from the competition, 
led to an extremely competitive 
marketplace throughout the whole 
of 2012.

Despite this, we have once again 
been successful in growing 
our share of both the UK and 
international markets and, as a 
result, Group sales increased by 
9% year on year and operating 
margins were improved. 

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We have also continued to invest in 
our core brands, which has helped 
to increase our market share both 
in the UK and overseas, in the still 
and carbonate categories. 

GROUP FINANCIAL 
PERFORMANCE

In 2012 the Group delivered 
another strong ﬁnancial 
performance, which was again 
ahead of both internal and external 
expectations. 

To summarise our ﬁnancial 
performance in 2012 we delivered:

•	 9%	sales	growth	 

•	

13%	profit	growth	 

•	

14%	earnings	per	share	growth		
(basic)  

•	

13%	dividend	growth

In addition, cash conversion was 
also strong and we ended the year 
with £24.7m of cash in the bank. 

TRADING HIGHLIGHTS

Sales in the UK increased by 9% 
to £85.0m (2011: £77.8m) driven 
by increased market share for 
Vimto, together with new product 
and brand extensions such as 
Weight Watchers and Levi Roots.  
We invested heavily in marketing 
in 2012, and again increased 
household penetration bringing 
new consumers to the Vimto 
brand. 

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Internationally, 2012 was another 
successful year with sales 
increasing by 8% to £22.7m. 
This was helped by Vimto again 
increasing its market share, 
particularly in key markets such as 
Africa and Europe.  We sell to more 
than 28 countries in Africa and in 
2012 increased sales by 22% in this 
region, in spite of very strong sales 
comparatives from last year.

In summary, growth from our 
existing core markets, both in 
the UK and overseas, combined 
with innovative new product 
developments and further new 
brand launches, has enabled the 
Group to deliver strong top and 

bottom line growth in 2012.

CORPORATE 
RESPONSIBILITY 

Nichols plc prides itself on having 
a sustainable business strategy 
which takes into account our wider 
corporate, environmental and 
social responsibilities.

SUSTAINABILITY AND THE 
ENVIRONMENT

We continue to make good 
progress on each of the four key 
areas targeted, being 
climate change, waste and 
packaging, water and transport.

We continue to work actively 
with the British Soft Drinks 
Association (BSDA), the Food and 
Drink Federation (FDF) and our 
key suppliers on environmental 
improvements. We are also 
signatories to the Courtauld 
Commitment and the Department 
of Health’s Public Health 
Responsibility Deal.

Our high standards in health and 
safety continued in 2012 and we 
are an active member of Valpak, 
ensuring our compliance with 
waste regulations, and minimising 
the direct impact our business 
activities have on the external 
environment.

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COMMUNITY

Our commitment to the wider 
community continued in 2012 as 
we actively look to give something 
back in return for the support we 
enjoy. In 2012 our charity team 
once again worked hard on behalf 
of our chosen charity Derian 
House, including a 10 kilometre 
run, fund raising golf day and a 
wide variety of events involving our 
customers, suppliers and advisors.

EMPLOYEES

As a team, our core values 
emphasise the importance 
of customer service, quality, 
professionalism, teamwork and 

mutual support. We have a strong 
people orientated culture that is a 
key priority for our business and 
critical to our continuing success.

Our overriding objective is to 
consistently deliver high results 
in everything we do and this has 
once again been recognised 
externally with Nichols plc being 
shortlisted for the AIM company 
of the year in 2012, for the second 
year in succession.

BRENDAN HYNES
CHIEF EXECUTIVE OFFICER
6 MARCH 2013

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“Despite the 
pressure on UK 
gross margins 
the excellent 
news is that
the Group 
actually 
increased its 
Operating Proﬁ t 
return on sales
in the year”

TIM CROSTON
GROUP FINANCE DIRECTOR

The Group delivered another 
strong revenue performance 
in 2012, sales totalled £107.8m 
increasing 9% on 2011’s tough 
comparatives. As our revenue 
breaks through the £100m 
barrier it’s timely to reﬂ ect that in 
the space of just ﬁ ve years, the 
Group’s sales have grown by 95% 
(2007: £55.3m).   

2012 
£m 

2011  Growth
£m 

£m

Still 

54.5 

48.8  5.7 

12%

Carbonate  53.3 

50.1 

3.2 

Total 

107.8  98.9  8.9 

6%

9%

SEGMENTS

Similar to last year the growth of 
our still products outstripped 
carbonate sales growth. Sales 

of still increased by £5.7m, 12% 
ahead of 2011, the growth largely 
came from UK sales including a 
22% increase in sales of our Vimto 
500ml still and the launch of Weight 
Watchers. Carbonate increased 
by 6% on the prior year including a 
15% increase in our African export 
market.

In 2012 the UK soft drinks market 

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was generally subdued as a result 
of reduced consumer spending 
which impacted all areas of grocery 
retailing. As a result, the underlying 
market volume actually declined by 
1% although inﬂationary pressures 
pushed up revenues by 3% (AC 
Nielsen 52 week data to 5 Jan 
2013). Against this backdrop our 
UK soft drinks business delivered 
a strong performance, increasing 
sales by 8% to £61.7m (2011: 
£57.2m) well outperforming the 
market. 

The foundation of the growth 
was driven by our core brand, 
Vimto, with sales increasing 5% 
against the prior year. In addition, 
our growth momentum has been 
supported by the development of 
new products, following the launch 
of the Levi Roots range of soft 
drinks in 2011 and introducing our 
Weight Watchers range early in 
2012 delivering an incremental £2m 
of sales during the year.

Also in the UK we operate in the 
Out of Home market, although 
this market and in particular the 
on-trade continues to be very 
challenging, our sales increased 
by £2.7m (14%); the growth 
coming from both on-trade sales 
of carbonate dispense products 
partly as a result of the acquisition 
of Festival Drinks Ltd in October 
and still juices into the catering 
sector.   

Our export sales totalled £22.7m, 
an increase of 8% over 2011. On 
the back of signiﬁcant increases in 
2011 (+28%), sales to Africa have 
continued to perform well in the 
year, increasing a further 22% to 
£6.6m. In the Middle East, our 
sales during the year were broadly 
ﬂat in comparison to 2011 due to 

timings of shipments around the 
year ends. Elsewhere in our export 
markets, sales to the Rest of the 
World increased by 24% totalling 
£5.1m.   

PROFIT

As forecast, our UK gross margin 
was under pressure during the 
year from a combination of the 
promotionally driven retail sales 
environment and high input cost 
inﬂation. As a result of these 
pressures, our Group GM% 
slipped two percentage points 
to 45%. Although we anticipate 
UK soft drinks retail will continue 
to experience high promotional 
activity during 2013, we are 
pleased to report that input cost 
inﬂation has eased for the ﬁrst time 
in three years and we expect low 
single digit cost increases during 
the year.

Despite the pressure on UK gross 
margins the excellent news is that 
the Group actually increased its 
Operating Proﬁt return on sales 
in the year, rising to 19% (2011: 
18%). This was achieved by strong 
overhead and infrastructure cost 
control allowing the beneﬁts of our 
revenue growth to ﬁlter down to 
the ‘bottom line’ without signiﬁcant 
increase in operating costs.         

Group Proﬁt Before Tax (PBT) 
increased by £2.4m to £20.5m, 
13% up on 2011, a strong 
performance in current conditions 
and again on the back of our own 
tough comparatives (2011: +20%). 
As we reﬂect on the ﬁve year sales 
growth, it is pleasing and arguably 
more signiﬁcant, to report that 
proﬁt has increased by an even 
greater extent. Since 2007 PBT has 
grown by 127%.    

The accrued tax charge for 2012 
was £5.3m, an effective rate of 
26% (2011: 26%). 

EARNINGS PER SHARE

Earnings Per Share (EPS) increased 
14% to 41.43 pence for the year. 
The ﬁve year growth trends shows 
139% increase since 2007.  

EPS BEFORE EXCEPTIONAL ITEMS
(PENCE PER SHARE)

50.00
40.00
30.00
20.00
10.00
0.00

2007 2008 2009 2010 2011 2012

EPS BEFORE EXCEPTIONAL ITEMS

STATEMENT OF FINANCIAL 
POSITION

The Group’s Statement of Financial 
Position (formerly the Balance 
Sheet) remains strong, debt free 
and includes net cash at the year-
end of £24.7m (2011: £20.1m), an 
increase of £4.6m. 

By exception, other key points 
of interest with regard to the 
Statement of Financial Position are:

•	 Goodwill	has	increased	by 
£2.3m primarily due to the 
acquisition of Festival Drinks Ltd 

  which was added to our Out    
of Home business in October    
2012.

•	 Despite	the	revenue	increase,			
inventories have reduced 
by £0.5m, this was in part due 
to stock efﬁciencies and also 
the fact that the 2011   
comparative included pre 
launch stock build for our  

  Weight Watchers range. 

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INTERNAL CONTROL

The Nichols Group complies 
with the principles of good 
corporate governance and has an 
established process of control and 
risk management.

A large proportion of our 
international business is with the 
Middle East and Africa. Any political 
instability in these key regions 
could lead to volatility in our trading 
patterns. 

comparison both sets of data are 
shown as an index using 2007 as 
the base.

NICHOLS PLC V ALL AIM
(INDEXED FROM 2007) 

The Board is ultimately responsible 
for maintaining sound internal 
control systems to safeguard the 
investment of shareholders and the 
Company’s assets. The systems 
are reviewed by the Board and are 
designed to provide reasonable, 
but not absolute, assurance 
against material mis-statement or 
loss.

AUDIT COMMITTEE

The Audit Committee consists 
of E Healey, P J Nichols and J 
Longworth. The terms of reference 
of the Committee include keeping 
under review the scope and 
results of the external audit. 
The Committee ensures the 
independence and objectivity of 
the external auditors, including the 
nature and extent of non-audit 
services supplied. Any further 
services with a value over £25,000 
would require Nichols plc Board 
approval.

RISKS AND UNCERTAINTIES

The UK soft drinks business 
continues to be largely dependent 
on third party suppliers for its 
products. To manage this risk we 
have appropriate and adequate 
audit procedures and resource at 
our disposal to ensure that we sell 
product of the highest quality.

Following the acquisition of the 
remaining 50% of the shares of 
Dayla Liquid Packing Ltd (March 
2011), the Out of Home business 
has direct inﬂuence over product 
supply. 

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In common with many businesses 
we are now also highly dependent 
on the availability of IT systems to 
carry out many trading activities. 

We have robust business continuity 
plans and stress test procedures 
in place to minimise all risks and 
exposures that the Group faces. 

SHAREHOLDERS

DIVIDEND
The Board is recommending a ﬁnal 
dividend of 11.7 pence per ordinary 
share (2011: 10.3 pence) payable 
to shareholders on the register 
at 2 April 2013. The ﬁnal dividend 
together with the interim dividend 
of 5.62 pence, gives a total 
dividend of 17.32 pence per share 
for the year which represents a 
13% increase on the prior year 
(2011: 15.3 pence).  

TOTAL DIVIDEND
(PENCE PER SHARE)

4
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2007 2008 2009 2010 2011 2012

NICHOLS PLC

ALL AIM INDEX

GOING CONCERN

After making enquiries, the 
directors have formed a 
judgement, at the time of 
approving the ﬁnancial statements, 
that there is a reasonable 
expectation that the Group has 
adequate resources to continue 
in operational existence for the 
foreseeable future. For this reason 
the directors continue to adopt the 
going concern basis in preparing 
the ﬁnancial statements.

T J CROSTON
GROUP FINANCE DIRECTOR
6 MARCH 2013

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2007 2008 2009 2010 2011 2012

SHARE PRICE
The Nichols plc share price 
performance in 2012 was 
outstanding, ending the year at 
852 pence, an increase of 62% 
from December 2011. The following 
graph charts the Group’s share 
price performance compared 
to the All AIM index. For ease of 

 
 
JOHN NICHOLS
NON-EXECUTIVE 
CHAIRMAN

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BRENDAN HYNES
CHIEF EXECUTIVE 
OFFICER

ERIC HEALEY
NON-EXECUTIVE 
DIRECTOR

TIM CROSTON
GROUP FINANCE
DIRECTOR &
COMPANY
SECRETARY

JOHN LONGWORTH
NON-EXECUTIVE 
DIRECTOR

AUDITORS
Grant Thornton UK LLP,
4 Hardman Square, Spinningﬁ elds,
Manchester, M3 3EB

BANKERS
The Royal Bank of Scotland plc,
1 Spinningﬁ elds Square,
Manchester, M3 3AP

SOLICITORS
DLA Piper, 101 Barbirolli Square,
Manchester, M2 3DL

STOCKBROKERS & NOMINATED
ADVISOR
Nplus1 Singer Advisory LLP,
West One Wellington Street,
Leeds,
LS1 1BA

FINANCIAL ADVISORS
N M Rothschild & Sons Limited,
82 King Street,
Manchester,
M2 4WQ

REGISTRARS
Capita Registrars Limited,
Northern House, Woodsome Park,
Fenay Bridge, Huddersﬁ eld,
HD8 0GA

REGISTERED OFFICE
Laurel House, Woodlands Park,
Ashton Road, Newton-le-Willows,
WA12 0HH

REGISTERED NUMBER
238303

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The directors present their report and the audited ﬁnancial statements for the year ended 31 December 2012. 

PRINCIPAL ACTIVITIES AND BUSINESS REVIEW

The Company and its principal operating subsidiaries are engaged in the supply of soft drinks to the retail, wholesale, 
catering, licensed and leisure industries.

A review of the Group’s trading during the year and its prospects are contained in the Chairman’s Statement on 
pages 4 and 5, the Chief Executive’s Review on pages 6 to 9 and the Financial Review on pages 10 to 12.

Reconciliation of proﬁt for the ﬁnancial year to retained earnings movement

2012

2011

Proﬁt for the ﬁnancial year

Interim dividend 5.62p (2011: 5.00p) per share paid 31 August  2012

Final dividend 10.30p (2010: 9.10p) per share paid 4 May 2012

Other comprehensive expense and movement on ESOT

Retained earnings movement

£’000

£’000

£’000

£’000

15,258

13,326

(2,071)

(3,795)

(771)

(1,842)

(3,353)

(2,088)

(6,637)

8,621

(7,283)

6,043

NON-EXECUTIVE DIRECTORS

J LONGWORTH (54)

Mr Longworth is currently a Non-Executive Director of the Cooperative Group, Cooperative Food Ltd and is also a 
Panel Member of the Competition Commission. He is Chairman of a business he founded in 2010, SVA Limited. He 
was appointed as Director General of the British Chamber of Commerce in September 2011. Previous roles have 
included being a Main Board Director of Asda and a Director of Tesco Stores. He was appointed to the Board of 
Nichols plc in November 2010.

E HEALEY (64)

Mr Healey, a Chartered Accountant, is a member of the Audit Committee of the University of Salford and an adviser 
to a number of enterprises. He is a former senior partner of an international accounting ﬁrm. He was appointed to the 
Board in January 2011.

P J NICHOLS (63)

Mr Nichols has been a director of the Company since 1976. He was appointed Managing Director in 1986 and 
Chairman in 1999.  In November 2007, Mr Nichols moved to non-executive Chairman.

All of the above are members of the audit and remuneration committees of the Board.

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EXECUTIVE DIRECTORS

B M HYNES (52)

Mr Hynes joined the Company as Group Finance Director in 2002 and was appointed Chief Executive Ofﬁcer in 
November 2007. He has previously been Group Finance Director at William Baird plc and KPS plc.

T J CROSTON (49)

Mr Croston initially joined the Company as Group Financial Controller in 2005 and moved to Finance and Operations 
Director for the Soft Drinks Division in 2007. He was appointed Group Finance Director on 1 January 2010.

FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

Business risks and uncertainties are included within the Financial Review on pages 10 to 12 and ﬁnancial risks are set 
out in note 21 to the ﬁnancial statements.

CREDITOR PAYMENT POLICY

The Company’s policy is to agree terms of payment at the start of business with all suppliers, to abide by these terms 
and to pay in accordance with its contractual and other legal obligations. At 31 December 2012 there were 24 (2011: 
41) creditor days outstanding.

EMPLOYEES

The Group’s policy is to recruit and promote on the basis of aptitude and ability without discrimination of any 
kind.  Applications for employment by disabled people are always fully considered bearing in mind the qualiﬁcation 
and abilities of the applicants.  In the event of employees becoming disabled every effort is made to ensure their 
continued employment.

The management of the individual operating companies consult with employees and keep them informed on matters 
of current interest and concern to the business.

CHARITABLE AND POLITICAL DONATIONS

Charitable donations during the year amounted to £16,000 (2011: £13,000).  There were no political donations in either 
2012 or 2011.

SHARE OPTIONS

The Company operates a Save As You Earn share option scheme.  In conjunction with this it makes donations to an 
Employee Share Ownership Trust to enable shares to be bought in the market to satisfy the demand from option 
holders.  

SHARE CAPITAL

The resolutions concerning the ability of the Board to purchase the Company’s own shares and to allot shares are 
again being proposed at the Annual General Meeting.

In exercising its authority in respect of the purchase and cancellation of the Company’s shares the Board takes as 
its major criterion the effect of such purchases on future expected earnings per share.  No purchase is made if the 
effect is likely to be deterioration in future expected earnings per share growth. During the year the Company did not 
purchase any of its own shares.

The Board believes that being permitted to allot shares within the limits set out in the resolution without the delay and 
expense of a general meeting gives the ability to take advantage of circumstances that may arise during the year.

1
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(

AUDITORS

In accordance with Section 489 of the Companies Act 2006 a resolution will be proposed at the Annual General 
Meeting that Grant Thornton UK LLP be re-appointed auditors.

DIRECTORS’ RESPONSIBILITIES STATEMENT 

The directors are responsible for preparing the Directors’ Report and the ﬁnancial statements in accordance with 
applicable law and regulations. 
Company law requires the directors to prepare ﬁnancial statements for each ﬁnancial year. Under that law the 
directors have elected to prepare the ﬁnancial statements in accordance with International Financial Reporting 
Standards (IFRSs) as adopted by the European Union. Under company law the directors must not approve the 
ﬁnancial statements unless they are satisﬁed that they give a true and fair view of the state of affairs and proﬁt or loss 
of the Company and Group for that period. In preparing these ﬁnancial statements, the directors are required to: 

•	
•	
•	

•	

select	suitable	accounting	policies	and	then	apply	them	consistently;	
make	judgments	and	accounting	estimates	that	are	reasonable	and	prudent;
state	whether	applicable	IFRSs	have	been	followed,	subject	to	any	material	departures	disclosed	and			
explained in the ﬁnancial statements; 
prepare	the	financial	statements	on	the	going	concern	basis	unless	it	is	inappropriate	to	presume	that	the		
Company will continue in business. 

The directors are responsible for keeping adequate accounting records that are sufﬁcient to show and explain the 
Company’s transactions and disclose with reasonable accuracy at any time the ﬁnancial position of the Company and 
enable them to ensure that the ﬁnancial statements comply with the Companies Act 2006. They are also responsible 
for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection 
of fraud and other irregularities. 

The directors conﬁrm that: 

•	

•	

so	far	as	each	of	the	directors	is	aware	there	is	no	relevant	audit	information	of	which	the	Company’s		 	
auditor is unaware; and
the	directors	have	taken	all	steps	that	they	ought	to	have	taken	as	directors	in	order	to	make	themselves		
aware of any relevant audit information and to establish that the auditors are aware of that information.

The directors are responsible for the maintenance and integrity of the corporate and ﬁnancial information included on 
the Company’s website. Legislation in the United Kingdom governing the preparation and dissemination of ﬁnancial 
statements may differ from legislation in other jurisdictions.

DIRECTORS’ INDEMNITY

The Group has agreed to indemnify its directors against third party claims which may be brought against them and 
has in place an ofﬁcers’ insurance policy.

6
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DIRECTORS’ REMUNERATION

Salary and fees Beneﬁ ts in kind

Bonuses

Pension 
contributions

Total
2012

Total
2011

P J Nichols

B M Hynes

T J Croston

J  Longworth

E Healey

Total

£’000

£’000

£’000

£’000

£’000

£’000

100

240

121

22

22

505

27

1

12

0

0

40

0

114

61

0

0

175

0

25

9

0

0

34

127

380

203

22

22

754

117

358

190

22

22

709

Bonuses which are not guaranteed are accruing to the executive directors and certain senior executives based on 
pre-determined performance targets. The remuneration committee considered it appropriate to issue awards under 
an incentive plan (the Growth Securities Ownership Plan (GSOP)) related to growth in operating proﬁ t from continued 
operations before exceptional items, tax and ﬁ nance costs. The current incentive plan runs from 1 January 2011 to 31 
December 2013.

P J Nichols is a member of the ﬁ nal salary pension scheme; B M Hynes and T J Croston have a personal pension plan. 
The Company contributions to the respective schemes are shown in the above table.

By order of the Board

T J CROSTON
Secretary

Laurel House  
Ashton Road 
Newton le Willows
WA12 0HH 

6 March 2013

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We have audited the ﬁ nancial 
statements of Nichols plc for 
the year ended 31 December 
2012 which comprise the 
consolidated income statement, 
the consolidated statement of 
comprehensive income, the Group 
and parent company statement of 
ﬁ nancial position, the consolidated 
and parent company statements 
of cash ﬂ ow, the Group and parent 
company statements of changes 
in equity and the related notes. 
The ﬁ nancial reporting framework 
that has been applied in their 
preparation is applicable law and 
International Financial Reporting 
Standards (IFRSs) as adopted 
by the European Union and, as 
regards the parent and Company 
ﬁ nancial statements, as applied in 
accordance with the provisions of 
the Companies Act 2006.

This report is made solely to the 
Company’s members, as a body, in 
accordance with Chapter 3 of
Part 16 of the Companies Act 
2006. Our audit work has been 
undertaken so that we might state 
to the Company’s members those 
matters we are required to state 
to them in an auditor’s report and 
for no other purpose. To the fullest 
extent permitted by law, we do not 
accept or assume responsibility to 
anyone other than the Company 
and the Company’s members as 
a body, for our audit work, for this 
report, or for the opinions we have 
formed.

RESPECTIVE 
RESPONSIBILITIES OF 
DIRECTORS AND AUDITOR

As explained more fully in the 
Directors’ Responsibilities 
Statement set out on page 16, 
the directors are responsible for 
the preparation of the ﬁ nancial 

statements and for being satisﬁ ed 
that they give a true and fair view. 
Our responsibility is to audit and 
express an opinion on the ﬁ nancial 
statements in accordance with 
applicable law and International 
Standards on Auditing (UK and 
Ireland). Those standards require 
us to comply with the Auditing 
Practices Board’s (APB’s) Ethical 
Standards for Auditors.

SCOPE OF THE AUDIT OF 
THE FINANCIAL STATEMENTS

A description of the scope of an 
audit of ﬁ nancial statements is 
provided on the APB’s website at 
www.frc.org.uk/apb/scope/private.
cfm.

Opinion on ﬁ nancial statements
In our opinion:

•	

the	fi	nancial	statements	give		 	
a true and fair view of the state 
of the Group’s and of the parent 

  Company’s affairs as at 31
  December 2012 and of the  
  Group’s proﬁ t for the year then  

ended; 

•	

the	Group	fi	nancial	statements		
have been properly prepared in
accordance with IFRSs as
adopted by the European  

  Union;

•	

the	parent	company	fi	nancial		 	
statements have been properly
prepared in accordance with
IFRSs as adopted by the  
European Union and as applied
in accordance with the
provisions of the Companies

  Act 2006; and

•	

the	fi	nancial	statements	have
been prepared in accordance

  with the requirements of the
  Companies Act 2006.

OPINION ON OTHER MATTER 
PRESCRIBED BY THE 
COMPANIES ACT 2006

In our opinion the information 
given in the Directors’ Report for 
the ﬁ nancial year for which the 
ﬁ nancial statements are prepared 
is consistent with the ﬁ nancial 
statements.

MATTERS ON WHICH WE 
ARE REQUIRED TO REPORT 
BY EXCEPTION

We have nothing to report in 
respect of the following matters 
where the Companies Act 2006 
requires us to report to you if, in our 
opinion:

•	 adequate	accounting	records
have not been kept by the
parent company, or returns
adequate for our audit have not
been received from branches
not visited by us; or

•	

the	parent	company	fi	nancial
statements are not in
agreement with the accounting
records and returns; or

•	 certain	disclosures	of	directors’

remuneration speciﬁ ed by law
are not made; or

•	 we	have	not	received	all	the
information and explanations

  we require for our audit.

Kevin Engel
Senior Statutory Auditor
for and on behalf of Grant Thornton 
UK LLP
Statutory Auditor, Chartered 
Accountants
Manchester
6 March 2013

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CONSOLIDATED INCOME STATEMENT
YEAR ENDED 31 DECEMBER 2012

Revenue

Cost of sales

Gross proﬁt

Distribution expenses

Administrative expenses

Operating proﬁt

Finance income

Finance expense

Proﬁt before taxation

Taxation

Total 
2012 
£’000

Total 
2011 
£’000

Notes

3

107,788

98,912

(59,661)

(52,683)

48,127

46,229

(6,569)

(5,862)

(21,041)

(22,218)

20,517

18,149

5

5

324

(331)

72

(116)

20,510

18,105

7

(5,252)

(4,779)

Proﬁt for the ﬁnancial year attributable to equity holders of the parent

15,258

13,326

Earnings per share (basic)

Earnings per share (diluted)

9

9

41.43p

36.28p

41.38p

36.25p

The accompanying accounting policies and notes form an integral part of these ﬁnancial statements.

All results relate to continuing operations.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 
YEAR ENDED 31 DECEMBER 2012

Proﬁt for the ﬁnancial year

Other comprehensive expense 

Deﬁned beneﬁt plan actuarial loss (see note 26)

Deferred taxation on pension obligations and employee beneﬁts (see note 13)

Other comprehensive expense for the year

Total comprehensive income for the year

2012 
£’000

2011 
£’000

15,258

13,326

(773)

(2,926)

78

842

(695)

(2,084)

14,563

11,242

0
2

STATEMENT OF FINANCIAL POSITION 
YEAR ENDED 31 DECEMBER 2012

ASSETS

Non-current assets

Property, plant and equipment

Goodwill

Investments

Deferred tax assets

Total non-current assets

Current assets

Inventories

Trade and other receivables

Cash and cash equivalents

Total current assets

Total assets

LIABILITIES

Current liabilities

Trade and other payables

Current tax liabilities

Provisions

Total current liabilities

Non-current liabilities

Pension obligations

Deferred tax liabilities

Total non-current liabilities

Total liabilities

Net assets

EQUITY

Share capital

Share premium reserve

Capital redemption reserve

Other reserves

Retained earnings

Total equity

Group

Parent

Notes

2012 
£’000

2011 
£’000

2012 
£’000

2011 
£’000

10

11

12

13

14

15

20

16

16

17

26

13

18

1,275

15,973

0

2,148

19,396

5,331

23,741

24,745

53,817

1,374

13,658

398

0

0

16,566

2,579

17,611

2,082

19,046

5,790

21,118

20,111

47,019

2,769

20,446

21,948

45,163

461

0

16,566

2,512

19,539

4,056

16,510

17,871

38,437

73,213

64,630

64,209

57,976

19,377

20,073

20,427

2,191

47

1,752

139

1,368

47

21,154

1,138

99

21,615

21,964

21,842

22,391

6,556

6,313

6,556

6,313

47

51

0

0

6,603

6,364

6,556

6,313

28,218

28,328

28,398

28,704

44,995

36,302

35,811

29,272

3,697

3,255

1,209

(474)

37,308

44,995

3,697

3,255

1,209

(546)

28,687

36,302

3,697

3,255

1,209

301

27,349

35,811

3,697

3,255

1,209

229

20,882

29,272

The ﬁnancial statements on pages 22 to 47 were approved by the Board of Directors on 6 March 2013 and were signed on its 
behalf by: 

P J Nichols 
Chairman 
The accompanying accounting policies and notes form an integral part of these ﬁnancial statements. 

Registered number 238303

2
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CONSOLIDATED STATEMENT OF CASH FLOWS 
YEAR ENDED 31 DECEMBER 2012

Proﬁt for the ﬁnancial year

Cash ﬂows from operating activities

Adjustments for:

Depreciation

Loss on sale of property, plant and equipment

Finance income

Tax expense recognised in the income statement

Change in inventories

Change in trade and other receivables

Change in trade and other payables

Change in provisions

Change in pension obligations

Cash generated from operating activities

Tax paid

Net cash generated from operating activities

Cash ﬂows from investing activities

Finance income

Proceeds from sale of property, plant and equipment

Acquisition of property, plant and equipment

Acquisition of subsidiary, net of cash acquired

Acquisition of subsidiary’s net overdraft

Net cash used in investing activities

Cash ﬂows from ﬁnancing activities

(Acquisition)/ disposal of own shares

Dividends paid

Net cash used in ﬁnancing activities

Notes

2012 
£’000

2012 
£’000

15,258

2011 
£’000

2011 
£’000

13,326

5

460

2

(324)

5,252

611

(2,297)

(1,071)

(92)

(530)

324

7

(297)

(2,254)

0

2,011

17,269

(4,545)

12,724

467

26

(72)

4,779

(1,674)

(4,069)

4,794

(226)

(748)

72

1

(302)

(2,300)

(24)

3,277

16,603

(3,794)

12,809

(2,220)

(2,553)

(4)

8

(5,866)

83

(5,195)

(5,870)

4,634

20,111

24,745

(5,112)

5,144

14,967

20,111

Net increase in cash and cash equivalents

Cash and cash equivalents at 1 January

Cash and cash equivalents at 31 December

20

The accompanying accounting policies and notes form an integral part of these ﬁnancial statements.

2
2

PARENT COMPANY STATEMENT OF CASH FLOWS 
YEAR ENDED 31 DECEMBER 2012

Proﬁt for the ﬁnancial year

Cash ﬂows from operating activities

Adjustments for:

Depreciation

Proﬁt on sale of property, plant and equipment

Finance income

Tax expense recognised in the income statement

Change in inventories

Change in trade and other receivables

Change in trade and other payables

Change in provisions

Change in pension obligations

Cash generated from operating activities

Tax paid

Net cash generated from operating activities

Cash ﬂows from investing activities

Finance income

Proceeds from sale of property, plant and equipment

Acquisition of property, plant and equipment

Acquisition of subsidiary, net of cash acquired

Net cash used in investing activities

Cash ﬂows from ﬁnancing activities

(Acquisition)/ disposal of own shares

Dividends paid

Net cash used in ﬁnancing activities

Notes

2012 
£’000

2012 
£’000

13,104

2011 
£’000

2011 
£’000

11,759

185

(2)

(324)

4,535

1,287

(3,939)

(711)

(52)

(530)

324

2

(138)

0

449

13,553

(3,794)

9,759

170

0

(72)

4,225

(2,302)

(4,652)

7,050

(179)

(748)

72

0

(154)

(2,300)

3,492

15,251

(3,068)

12,183

188

(2,382)

(4)

8

(5,866)

83

(5,195)

(5,870)

4,077

17,871

21,948

(5,112)

4,689

13,182

17,871

Net increase in cash and cash equivalents

Cash and cash equivalents at 1 January

Cash and cash equivalents at 31 December

20

The accompanying accounting policies and notes form an integral part of these ﬁnancial statements.

2
3

STATEMENT OF CHANGES IN EQUITY 
YEAR ENDED 31 DECEMBER 2012

Called up 
share 
capital 
£’000

Share 
premium 
reserve 
£’000

Capital 
redemption  
reserve 
£’000 

Other 
reserves 
£’000

Retained 
earnings 
£’000

Total
equity 
£’000

3,697

3,255

1,209

(629)

22,644

30,176

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

83

83

0

0

0

(5,195)

(5,195)

(4)

(5,199)

13,326

(2,084)

11,242

79

(5,116)

13,326

(2,084)

11,242

3,697

3,255

1,209

(546)

28,687

36,302

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

72

72

0

0

0

(5,866)

(5,866)

(76)

(4)

(5,942)

(5,870)

15,258

(695)

15,258

(695)

14,563

14,563

3,697

3,255

1,209

(474)

37,308

44,995

Called up 
share 
capital 
£’000

Share 
premium 
reserve 
£’000

Capital 
redemption  
reserve 
£’000 

Other 
reserves 
£’000

Retained  
earnings 
£’000

Total
equity 
£’000

3,697

3,255

1,209

146

16,406

24,713

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

83

83

0

0

0

(5,195)

(5,195)

(4)

79

(5,199)

(5,116)

11,759

11,759

(2,084)

(2,084)

9,675

9,675

3,697

3,255

1,209

229

20,882

29,272

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

72

72

0

0

0

(5,866)

(5,866)

(76)

(4)

(5,942)

(5,870)

13,104

(695)

13,104

(695)

12,409

12,409

3,697

3,255

1,209

301

27,349

35,811

Group

At 1 January 2011

Dividends

Movement in ESOT

Transactions with owners

Proﬁt for the year

Other comprehensive expense

Total comprehensive income

At 1 January 2012

Dividends

Movement in ESOT

Transactions with owners

Proﬁt for the year

Other comprehensive expense

Total comprehensive income

At 31 December 2012

Parent

At 1 January 2011

Dividends

Movement in ESOT

Transactions with owners

Proﬁt for the year

Other comprehensive expense

Total comprehensive income

At 1 January 2012

Dividends

Movement in ESOT

Transactions with owners

Proﬁt for the year

Other comprehensive expense

Total comprehensive income

At 31 December 2012

4
2

NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2012

1. REPORTING ENTITY

Nichols plc (the “Company”) is a company domiciled in the United Kingdom. The address of the Company’s registered ofﬁce 
is Laurel House, Woodlands Park, Ashton Road, Newton-le-Willows, WA12 0HH. The consolidated ﬁnancial statements of the 
Company as at and for the year ended 31 December 2012 comprise the Company and its subsidiaries (together referred to as the 
“Group”). The Group is primarily engaged in the supply of soft drinks to the retail, wholesale, catering, licensed and leisure industries. 

The Company’s business activities, together with the factors likely to affect its future development, performance and position are 
set out in the Chief Executive’s Review on pages 6 to 9. The ﬁnancial position of the Company, its cash ﬂows, liquidity position and 
borrowing facilities are described in the Finance Review on pages 10 to 12. In addition, notes 21 and 23 to the ﬁnancial statements 
include the Company’s objectives, policies and processes for managing its capital, its ﬁnancial risk management objectives, details 
of its ﬁnancial instruments and hedging activities, and its exposures to credit risk and liquidity risk. 

The Company has considerable ﬁnancial resources together with long-term contracts with a number of customers and suppliers 
across different geographic areas and industries. As a consequence, the directors believe that the Company is well placed to 
manage its business risks successfully despite the current uncertain economic outlook. 

The directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the 
foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the annual ﬁnancial statements.

2. ACCOUNTING POLICIES
Basis of preparation

The consolidated and parent company ﬁnancial statements have been prepared in accordance with International Financial 
Reporting Standards (IFRSs) as  adopted by the EU and the Companies Act 2006 as applicable to companies reporting under IFRS. 

The ﬁnancial statements were approved by the Board of Directors on 6 March 2013. 

The ﬁnancial statements have been prepared on the historical cost basis. 

The accounting policies have been applied consistently by the Group. 

An income statement is not provided for the parent company as permitted by Section 408 of the Companies Act 2006. 

The proﬁt dealt with in the ﬁnancial statements of Nichols plc was £13,104,000 (2011: £11,759,000).

Functional and presentation currency

These consolidated ﬁnancial statements are presented in sterling, which is also the functional currency of the parent and subsidiary 
companies.

Use of estimates and judgements

The preparation of ﬁnancial statements requires management to make judgements, estimates and assumptions that affect the 
application of accounting policies and the reported amounts of assets, liabilities, income and expenses.  Actual results may differ 
from these estimates.  
The following are the key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet 
date that have a signiﬁcant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next 
ﬁnancial year. 

Impairment of goodwill

Determining whether goodwill is impaired requires an estimation of the value in use of the cash-generating units to which goodwill 
has been allocated.  The value in use calculation requires management to estimate the future cash ﬂows expected to arise from the 
cash-generating unit and a suitable discount rate in order to calculate present value (see note 11).  

The carrying amount of goodwill at the balance sheet date was £16.0 million (2011: £13.7 million).

Share options

The assumptions on the expected life of share options, volatility of shares, risk free yield to maturity and expected dividend yield on 
shares are used in the IFRS fair value calculation of the Group’s share options outstanding at the balance sheet date (see note 19).

Deﬁned beneﬁt obligations

For the Group’s deﬁned beneﬁt plan, the main assumptions used by the actuary are the rate of future salary increases, the rate of 
increase in pensions in payment, the discount rate and the expected rate of inﬂation (see note 26).

Useful lives of property, plant and equipment

As described within the property, plant and equipment paragraph below, the Group reviews the estimated useful lives of property, 
plant and equipment at least annually. 

Estimates and underlying assumptions are reviewed by management on an ongoing basis.  Revisions to accounting estimates are 
recognised in the period in which the estimate is revised and in any future periods affected.

2
5

 
 
 
 
 
 
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2012

Basis of consolidation

The Group ﬁnancial statements consolidate those of the Company and all of its subsidiary undertakings drawn up to 31 December 
2012. Subsidiaries are entities controlled by the Group.  Control exists when the Group has the power to govern the ﬁnancial 
and operating policies of an entity so as to obtain beneﬁts from its activities. In assessing control, potential voting rights that are 
exercisable are taken into account.  The ﬁnancial statements of subsidiaries are included in the consolidated ﬁnancial statements 
from the date that control commences until the date that control ceases. 

Intra-Group balances and any unrealised gains and losses arising from intra-Group transactions are eliminated in preparing the 
consolidated ﬁnancial statements. All Group companies have coterminous year ends.  

Acquisitions of subsidiaries are dealt with by the acquisition method. The acquisition method involves the recognition at fair value 
of all identiﬁable assets and liabilities at the acquisition date, regardless of whether or not they were recorded in the ﬁnancial 
statements of the subsidiary prior to acquisition. On initial recognition, the assets and liabilities of the subsidiary are included in the 
consolidated balance sheet at their fair values, which are also used as the basis for subsequent measurement in accordance with 
Group accounting policies. Goodwill is stated after separating out identiﬁable assets. Goodwill represents the excess of the fair value 
of the consideration transferred over the fair value of the Group’s share of the identiﬁable net assets of the acquired subsidiary at 
the date of acquisition. 

Revenue recognition

Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns and 
allowances, trade discounts, volume discounts and excluding VAT.  Revenue is recognised when the signiﬁcant risks and rewards 
of ownership have been transferred to the buyer, the amount of revenue can be measured reliably, recovery of the consideration 
is probable, the associated costs and possible return of goods can be estimated reliably and there is no continuing management 
involvement with the goods. 

Transfer of risks and rewards vary depending on the individual term of the contract of sale.  For sales in the UK, transfer occurs 
when the product is despatched to the customer.  However, for some international shipments, transfer occurs either upon loading 
the goods onto the relevant carrier or when the goods have arrived in the overseas port. The point of transfer for international 
shipments is dictated by the terms of each sale.

Segmental reporting

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur 
expenses, including revenues and expenses that relate to transactions with any of the Group’s other components and for which 
discrete ﬁnancial information is available. An operating segment’s operating results are reviewed regularly by the management 
committee (as chief operating decision maker) to make decisions about resources to be allocated to the segment and assess its 
performance. 

Segment results that are reported to the management committee include items directly attributable to a segment as well as those 
that can be allocated on a reasonable basis. Segment reporting for the Group is made to the gross proﬁt level for the operating 
segments but no segment reporting is made for further expenditure or for the assets and liabilities of the Group. The assets and 
liabilities of the Group are reported as Group totals and no reporting of these balances is recorded at a segment level. As a result 
all of the Group’s assets and liabilities are unallocated items and no reconciliation of segment assets to the Group’s total assets is 
prepared.

Foreign currency transactions

Transactions in foreign currencies are translated into the respective functional currencies of Group entities at exchange rates at the 
date of transactions.  Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the 
functional currency at the exchange rate at that date. 

Any exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those 
at which they were initially recorded are recognised in the consolidated income statement in the period in which they arise. 

During 2012 the Group entered into foreign currency transactions that over the course of the year resulted in the Group having a 
natural hedge. This then meant the Group did not need to enter into forward contracts to minimise the impact of movements in 
foreign currency rates on the spot market. During 2011 the Group used forward exchange contracts to hedge its foreign currency 
risk.  Forward purchase contracts in US Dollars were made to cover at least the full year of projected purchases.  The forward 
foreign currency purchase contracts, which were a mixture of ﬁrm contracts and conditional options, matured in line with expected 
purchases.

Taxation

Income tax expense comprises current and deferred tax. Income tax expense is recognised in the income statement except to the 
extent that it relates to items recognised in other comprehensive expense.

Current tax

Current tax is the expected tax payable on the taxable income for the year, using rates which are enacted or substantively enacted 
at the reporting date and any adjustment to tax payable in respect of previous years.

6
2

 
 
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2012

Deferred tax

Deferred tax is recognised using the balance sheet liability method, with no discounting, providing for temporary differences 
between the carrying amounts of assets and liabilities for ﬁnancial reporting purposes and the amounts used for taxation purposes.  
Deferred tax is not provided on the initial recognition of goodwill, or on the initial recognition of an asset or liability unless the 
related transaction is a business combination or affects tax or accounting proﬁt.  Deferred tax is measured at the tax rates that are 
expected to be applied to the temporary differences when they reverse, provided they are enacted or substantively enacted at the 
reporting date. 

A deferred tax asset is recognised to the extent that it is probable that future taxable proﬁts will be available against which 
temporary differences can be utilised.  Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it 
is no longer probable that the related tax beneﬁt will be realised.

Goodwill

Goodwill arises on the acquisition of subsidiaries, associates and joint ventures. 

Goodwill representing the excess of the fair value of the consideration transferred over the fair value of the Group’s share of the 
identiﬁable assets acquired, is capitalised and reviewed annually for impairment. Goodwill is measured at cost less accumulated 
impairment losses. 

As part of its transition to IFRS, the Group elected to restate only those business combinations that occurred on or after 1 January 
2006. In respect of acquisitions prior to 1 January 2006, the net book value of goodwill at the date of transition is the deemed cost 
of goodwill to the Group under IFRS. 

For acquisitions on or after 1 January 2006, goodwill represents the excess of the fair value of the consideration transferred over the 
Group’s interest in the net fair value of the identiﬁable assets, liabilities and contingent liabilities of the acquiree. When the excess is 
negative, it is recognised immediately in the Group income statement. 

Goodwill written off to reserves prior to the date of transition to IFRS remains in reserves.  There is no re-instatement of goodwill 
previously amortised on the transition to IFRS. Goodwill previously written off to reserves is not written back to the income 
statement on subsequent disposal.

Reserves

Share capital represents the nominal value of equity shares.

Share premium reserve represents the excess over nominal value of the fair value of the consideration received for equity shares.

Capital redemption reserve represents the reserve created upon redemption of shares.

Other reserves incorporate purchase of own shares, movements in the Group’s ESOT and the IFRS 2 “Share-based payment” 
charge for the year.

Retained earnings represents retained earnings.

Impairment

The carrying values of the Group’s non-current assets are reviewed at each reporting date to determine whether there is any 
indication of impairment.  Goodwill is reviewed for impairment annually.  All property, plant and equipment is tested for impairment 
whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.  If any such indication of 
impairment exists then the asset’s recoverable amount is estimated. 

For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identiﬁable cash 
ﬂows (cash-generating units).  As a result, some assets are tested individually for impairment and some are tested at a cash-
generating unit level. 

An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount.  
The recoverable amount is the higher of fair value, reﬂecting market conditions less costs to sell and value in use.   In assessing 
value in use, the estimated future cash ﬂows are discounted to their present value using the cost of capital that reﬂects the current 
market assessments of the time value of money and the risks speciﬁc to the asset.  Impairment losses recognised in respect of 
cash-generating units are allocated ﬁrst to reduce the carrying amount of any goodwill allocated to the units and then to reduce the 
carrying amount of the other assets in the unit on a pro rata basis.  Impairment losses are recognised in the income statement.

Property, plant and equipment

Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses. 

Cost includes expenditures that are directly attributable to the acquisition of the asset. 

The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is 
probable that the future economic beneﬁts embodied within the part will ﬂow to the Group and its cost can be measured reliably.  
The costs of the day-to-day servicing of property, plant and equipment are recognised in the income statement as incurred. 
Depreciation is calculated on a straight line basis to write down the cost less estimated residual value on property, plant and 
equipment over their estimated useful lives. 

2
7

 
 
 
 
 
 
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2012

The estimated useful lives for the current and comparative periods are as follows: 

Property, plant and equipment        3-10 years 

Material residual value estimates and useful economic lives are updated at least annually.

Inventories

Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on the ﬁrst-in ﬁrst-out 
principle and includes expenditure incurred in acquiring the inventories and bringing them to their existing location and condition.  
Net realisable value is the estimated selling price in the ordinary course of business, less the costs of completion and selling 
expenses.

Financial assets

The Group’s ﬁnancial assets comprise primarily cash, bank deposits and trade receivables that arise from its business operations. 

For the purpose of the consolidated statement of cash ﬂows, cash and cash equivalents comprise deposits with banks and bank 
and cash balances. 

Cash equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash and which are 
subject to an insigniﬁcant risk of changes in value. 

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest 
method, less provisions for impairment.  A provision for impairment of trade receivables is established when there is evidence that 
the Group will not be able to collect all amounts due according to the original terms of the receivable.

Financial liabilities

The Group’s ﬁnancial liabilities comprise trade and other payables. Financial liabilities are obligations to pay cash or other ﬁnancial 
assets and are recognised when the Group becomes a party to the contractual provisions of the instruments. Trade payables are 
initially measured at fair value and are subsequently measured at amortised cost, using the effective interest rate method.

Leased assets

Operating leases and the payments are recognised in the income statement on a straight-line basis over the term of the lease.  
Lease incentives received are recognised as an integral part of the total lease expense, over the term of the lease.

Employee beneﬁts - Deﬁned contribution plan

Obligations for contributions to the Group’s deﬁned contribution pension plan are recognised as an expense in the income 
statement when they are due.

Employee beneﬁts - Deﬁned beneﬁt plan

The Group’s net obligation in respect of its deﬁned beneﬁt pension plan is calculated by estimating the amount of future beneﬁt 
that employees have earned in return for their service in the current and prior periods.  That beneﬁt is discounted to determine its 
present value, and any unrecognised past service costs and the fair value of any plan assets are deducted.  The discount rate is the 
yield at the reporting date on AA credit-rated bonds that have maturity dates approximating the terms of the Group’s obligations.  
The calculation is performed by a qualiﬁed actuary using the projected unit credit method. When the calculation results in a beneﬁt 
to the Group, the recognised asset is limited to the net total of any unrecognised past service costs and the present value of any 
future refunds from the plan or reductions in future contributions to the plan. 

Actuarial gains and losses are recognised in other comprehensive income.  Interest expenses related to pension obligations are 
included in ﬁnance expense in the Group income statement. All other post employment beneﬁts are included in administrative 
expenses in the Group income statement. 

When the beneﬁts of a plan are improved, the portion of the increased beneﬁt relating to past service by employees is recognised 
in the income statement on a straight-line basis over the average period until the beneﬁts become vested.  To the extent that the 
beneﬁts vest immediately, the expense is recognised immediately in the income statement.

Share-based payment transactions

The Group’s equity-settled share-based payments comprise the grant of options under the Group’s share option schemes. 

In accordance with IFRS 2 “Share-based payment”, the Group has recognised an expense to the income statement representing 
the fair value of outstanding equity-settled share-based payment awards to employees which have not vested as at 1 January 2012 
for the year ending 31 December 2012.   

Those fair values were charged to the income statement over the relevant vesting period adjusted to reﬂect actual and expected 
vesting levels. The Group has calculated the fair market value of options as being based on the market value of a company’s share 
at the date of grant adjusted to reﬂect the fact that an employee is not entitled to receive dividends over the relevant holding period. 

The total amount to be expensed over the vesting period is determined with reference to the fair value of options granted, excluding 

8
2

 
 
 
 
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2012

the impact of any non market vesting conditions.  Non market vesting conditions are included in the assumptions about the number 
of options expected to vest.  At each balance sheet date the Group revises its estimate of the number of options expected to 
vest.  It recognises the impact of revisions to original estimates, if any, in the income statement, with a corresponding adjustment to 
equity.  The proceeds received, net of any directly attributable transactions costs, are credited to share capital and share premium 
when the options are exercised.

Provisions and contingent liabilities

A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be 
estimated reliably and it is probable that an outﬂow of economic beneﬁts will be required to settle the obligation.  Provisions are 
determined by discounting the expected future cash ﬂows at a pre-tax rate that reﬂects current market assessments of the time 
value of money and the risks speciﬁc to the liability. 

A provision for restructuring is recognised when the Group has approved a detailed and formal restructuring plan and the 
restructuring either has commenced or has been announced publicly.  Future operating costs are not provided for. 

Finance income

Finance income comprises interest income on funds invested.  Interest income is recognised as it accrues, using the effective 
interest method. 

Earnings per share

The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares.  Basic EPS is calculated by dividing the 
proﬁt or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding 
during the period.  Diluted EPS is determined by adjusting the proﬁt or loss attributable to ordinary shareholders and the weighted 
average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which comprise share options 
granted to employees. 

Employee Share Ownership Trust

The assets and liabilities of the Employee Share Ownership Trust (“ESOT”) have been included in the consolidated ﬁnancial 
statements. 

The costs of purchasing own shares held by the ESOT are shown as a deduction against equity.  Neither the purchase nor sale of 
own shares leads to a gain or loss being recognised in the consolidated income statement.

Investments in subsidiaries

Investments in subsidiaries are shown in the parent company balance sheet at cost less any provision for impairment.

Standards and interpretations in issue not yet adopted

New standards and interpretations currently in issue but not effective for accounting periods commencing on 1 January 2012 are:  

•	IFRS	9	Financial	Instruments	(effective	1	January	2015)	 
•	IFRS	10	Consolidated	Financial	Statements	(effective	1	January	2014)	 
•	IFRS	11	Joint	Arrangements	(effective	1	January	2013)	 
•	IFRS	12	Disclosure	of	Interests	in	Other	Entities	(effective	1	January	2014)	 
•	IFRS	13	Fair	Value	Measurement	(effective	1	January	2013)	 
•	IAS	19	Employee	Benefits	(Revised	June	2011)	(effective	1	January	2014)	 
•	IAS	27	(Revised),	Separate	Financial	Statements	(effective	1	January	2014)	 
•	IAS	28	(Revised),	Investments	in	Associates	and	Joint	Ventures	(effective	1	January	2013)	 
•	Presentation	of	Items	of	Other	Comprehensive	Income	-	Amendments	to	IAS	1	(effective	1	July	2012)	 
•	Disclosures	-	Offsetting	Financial	Assets	and	Financial	Liabilities	-	Amendments	to	IFRS	7	(effective	1	January	2013)	 
•	Offsetting	Financial	Assets	and	Financial	Liabilities	-	Amendments	to	IAS	32	(effective	1	January	2014)	 
•	Mandatory	Effective	Date	and	Transition	Disclosures	-	Amendments	to	IFRS	9	and	IFRS	7	(effective	1	January	2015)	 
•	Transition	Guidance	-	Amendments	to	IFRS	10,	IFRS	11	and	IFRS	12	(effective	1	January	2013)	 
•	Investment	Entities	-	Amendments	to	IFRS	10,	IFRS	12	and	IAS	27	(effective	1	January	2014) 

The Directors are currently considering the potential impact of adoption of these standards and interpretations in future periods on 
the consolidated ﬁnancial statements of the Group. 

2
9

 
 
 
NOTES TO THE FINANCIAL STATEMENTS 
YEAR ENDED 31 DECEMBER 2012

3. SEGMENTAL INFORMATION
a. Key Operating segment

The Executive Committee analyses the Group’s internal reports to enable an assessment of performance and allocation of 
resources, the operating segments are based on these reports. 

The Executive Committee reviews the Group on the operating segments identiﬁed below. Gross proﬁt is the measure used to 
assess the performance of each operating segment.

Still

Carbonate

Total

Revenue 
(sales to third parties)

Gross Proﬁt

2012 
£’000

2011 
£’000

2012 
£’000

54,516

53,272

107,788

48,809

28,036

50,103

98,912

20,091

48,127

2011 
£’000

26,130

20,099

46,229

There are no sales between the two operating segments, and all revenue is earned from external customers. 

The operating segments gross proﬁt is reconciled to proﬁt before taxation as per the consolidated income statement. 

The Group’s assets are managed centrally by the Management Committee and consequently there is no reconciliation between 
the Group’s assets per the statement of ﬁnancial position and the segment assets.

Capital Expenditure

Depreciation

b. Reporting by geographic area
Revenue by geographic destination

Middle East

Africa

Rest of the World

Total exports

United Kingdom

2012 
£’000

297

460

2011 
£’000

302

467

2012

£’000

11,015

6,574

5,148

22,738

85,050

2012

%

10.2

6.1

4.8

21.1

78.9

107,788

100.0

2011

£’000

11,489

5,379

4,224

21,092

77,820

98,912

2011

%

11.6

5.4

4.3

21.3

78.7

100.0

Revenue from continuing operations arose principally from the provision of goods.   
The Group’s business segments operate in the Middle East, Africa, the Rest of the World and the United Kingdom. The Group’s 
Head Ofﬁce operations are located in the United Kingdom. In presenting information on the basis of geographical areas, area 
revenue is based on the geographical location of customers and not on the legal entity in which the transaction occurred. 
No individual customer accounts for 10% or more of the Group’s  revenue in either 2012 or 2011.

Total assets
The assets of the Group at 31 December 2012 and 31 December 2011 are entirely located within the United Kingdom. 

Capital expenditure
The capital expenditure of the Group for the years ended 31 December 2012 and 31 December 2011 was entirely made within the 
United Kingdom.

Depreciation
The Group’s depreciation charges for the years ended 31 December 2012 and 31 December 2011 are against ﬁxed assets all 
retained within the United Kingdom.

0
3

 
 
 
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2012

4. OPERATING PROFIT

Operating proﬁt is stated after charging/(crediting):

Inventory amounts charged to cost of sales 

Auditors’ remuneration - audit of the Company’s annual accounts

Fees payable to the auditors for other services:

Audit of the Company’s subsidiaries

Other services relating to employee incentive scheme

Depreciation of property, plant and equipment

Operating lease rentals payments

Awards under Growth Securities Ownership Plan

Loss / (gain) on foreign exchange differences

Loss on sale of property, plant and equipment

5. FINANCE INCOME AND EXPENSE

Finance income comprises:

Bank interest receivable

Finance expense comprises:

Expected return on deﬁned beneﬁt pension scheme assets

Interest on deﬁned beneﬁt pension scheme obligations

Finance expense  

2012 
£’000

2011 
£’000

59,661

52,683

60

0

0

460

883

1,117

113

2

38

19

110

467

823

770

(15)

26

2012 
£’000

2011 
£’000

324

72

(793)

1,124

331

(1,059)

1,175

116

3
1

NOTES TO THE FINANCIAL STATEMENTS 
YEAR ENDED 31 DECEMBER 2012

6. DIRECTORS AND EMPLOYEES

a. Average number of persons employed during the year, including directors:

Total

b. Group employment costs were as follows:

Wages and salaries

Social security costs

Pension costs - deﬁned contribution scheme

Pension costs - deﬁned beneﬁt scheme (see note 26)

Awards under Growth Securities Ownership Plan

The employment costs for the parent company amounted to £6,189,000 (2011: £6,038,000).

Directors’ remuneration for the year

Pension costs

Payment under Growth Securities Ownership Plan

2012 
Number

2011 
Number

162

169

2012 
£’000

6,464

724

261

107

1,117

8,673

2011 
£’000

6,789

620

215

119

770

8,513

2012 
£’000

2011 
£’000

720

34

0

754

606

33

70

709

The highest paid director has received £355,000 (2011: £333,000) excluding pension contributions.  

Beneﬁts are accruing to 2 directors (2011: 2 directors) under a deﬁned contribution scheme. 

Awards accruing under Growth Securities Ownership Plan in respect of directors amounted to £798,000 (2011: £465,000), which 
is not included in the above disclosure relating to directors. 

Further information regarding directors’ remuneration and the Growth Securities Ownership Plan is provided in the directors’ report 
on page 16 & 17.

c. Key management personnel are deemed to be the executive directors of the Company and members of the 
Executive Committee.

The compensation payable to key management in the year is detailed below:

Wages and salaries

Pension costs - deﬁned contribution scheme

Pension costs - deﬁned beneﬁt scheme

Awards under Growth Securities Ownership Plan

2012 
£’000

1,199

52

24

1,117

2,392

2011 
£’000

1,171

58

27

765

2,021

2
3

 
 
 
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2012

7. TAXATION

a. Analysis of expense recognised in the consolidated income statement

Current taxation:

UK corporation tax on income for the year

Adjustments in respect of prior years

Total current tax charge for the year

Deferred tax:

Origination and reversal of temporary differences

Adjustments in respect of prior years

Total deferred tax charge for the year

Total tax expense in the consolidated income statement

The tax expense is wholly in respect of UK taxation.

b. Tax reconciliation

Proﬁt before taxation

2012 
£’000

2011 
£’000

4,901

(154)

4,747

4,130

(146)

3,984

288

217

505

805

(10)

795

5,252

4,779

2012 
£’000

20,510

2011 
£’000

18,105

Proﬁt before taxation multiplied by the standard rate of corporation tax in the United Kingdom of 24.5% 
(2011: 26.5%)

5,025

4,796

Effect of:

Non-deductible expenses

Permanent element of share scheme deduction

Impact on deferred tax of use of hybrid tax rate

Other timing differences

Adjustments to the tax charge in respect of prior years

Depreciation for the year greater than capital allowances

Group relief not paid for

Impact on deferred tax due to rate change taken to SOCIE

Net income not taxable / additional expenses allowable for tax purposes

39

(1)

178

(35)

26

35

0

(15)

0

38

(113)

144

3

(159)

39

32

0

(1)

Total tax expense in the consolidated income statement

5,252

4,779

The effective rate of tax for the year of 25.6% (2011: 26.4%) is higher than the standard rate of corporation tax in the United 
Kingdom (24.5%). The differences are explained above. 

c. The effective rate of tax on proﬁt is 25.6% (2011: 26.4%).

d. Tax on items recognised in other comprehensive expense 

In addition to the amount credited to the consolidated income statement, £78,000 (2011: £842,000) has been recognised in 
other comprehensive expense, being the movement on deferred taxation relating to retirement beneﬁt obligations and employee 
beneﬁts.

8. EQUITY DIVIDENDS

Interim dividend 5.62p (2011: 5.00p) paid 31 August 2012

Final dividend for 2011 10.30p (2010: 9.10p) paid 4 May 2012

2012 
£’000

2,071

3,795

5,866

2011 
£’000

1,842

3,353

5,195

The interim dividend for the prior year of £1,842,000 was paid on 9 September 2011.

The 2012 ﬁnal proposed dividend of £4,311,000 (11.70p per share) has not been accrued as it had not been approved by the year 
end.

3
3

NOTES TO THE FINANCIAL STATEMENTS 
YEAR ENDED 31 DECEMBER 2012

9. EARNINGS PER SHARE

Earnings per share (basic)

Earnings per share (diluted)

2012

41.43p

41.38p

2011

36.28p

36.25p

Earnings per share

Basic earnings per share

Dilutive effect of share options

Diluted earnings per share

2012 
Weighted 
average 
number of 
shares

Earnings 
£’000

Earnings 
per share

Earnings 
£’000

2011 
Weighted 
average 
number of 
shares

Earnings 
per share

15,258 36,826,460

41.43p

13,326 36,728,932

36.28p

50,569

32,013

15,258 36,877,029

41.38p

13,326 36,760,945

36.25p

4
3

NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2012

10. PROPERTY,  PLANT AND EQUIPMENT

Group 
Cost

At 1 January 2011

Acquisitions through business combinations

Additions

Disposals

At 1 January 2012

Acquisitions through business combinations

Additions

Disposals

At 31 December 2012

Depreciation

At 1 January 2011

Charge for the year

On disposals

At 1 January 2012

Charge for the year

On disposals

At 31 December 2012

Net book value at 31 December 2012

Net book value at 31 December 2011

Parent 
Cost

At 1 January 2011

Additions

At 1 January 2012

Additions

Disposals

At 31 December 2012

Depreciation

At 1 January 2011

Charge for the year

At 1 January 2012

Charge for the year

On disposals

At 31 December 2012

Net book value at 31 December 2012

Net book value at 31 December 2011

Property, 
plant and 
equipment 
£’000

5,115

323

302

(173)

5,567

132

297

(235)

5,761

3,827

467

(101)

4,193

460

(167)

4,486

1,275

1,374

Property, 
plant and 
equipment 
£’000

2,018

154

2,172

138

(19)

2,291

1,541

170

1,711

185

(3)

1,893

398

461

3
5

NOTES TO THE FINANCIAL STATEMENTS 
YEAR ENDED 31 DECEMBER 2012

11. GOODWILL
Group 
Cost

At 1 January 2011

Additions 

At 1 January 2012

Additions (see below)

At 31 December 2012

£’000

11,914

1,744

13,658

2,315

15,973

Goodwill relates to the historic still and carbonate Out of Home business which is considered by management to be one
cash-generating unit. This cash generating unit is reported across both our still and carbonate segments. 

Goodwill is tested at least annually for impairment and whenever there are indications that goodwill might be impaired. The 
recoverable amount of a cash-generating unit is based on its value in use. Value in use is the present value of the projected cash 
ﬂows of the cash-generating unit. The key assumptions regarding the value in use calculations were forecast growth in revenues 
and the discount rate applied. Budgeted revenue growth is estimated based on actual performance over the past two years and 
expected market changes. The discount rate of 9% is a pre-tax rate and reﬂects the risks speciﬁc to the relevant cash-generating 
unit. Out of Home business cash ﬂow projections are based on the most recent ﬁnancial budgets approved by management. 
Management have applied an annual growth rate of 5% in projecting the cash ﬂows for a period of ﬁve years. Further periods have 
not been included in the impairment test due to the value of the free cash ﬂows after a period of ﬁve years being greater than the 
carrying value of goodwill. Therefore management do not believe it is necessary to project any further into the future. 

Management have considered the allocation of the fair value of the consideration transferred over the fair value of the Group’s 
share of the identiﬁable assets acquired to other intangibles and are satisﬁed that is it correctly allocated to goodwill. 

Goodwill additions for 2012 consist of the acquisition of 100% of the issued share capital of Festival Drinks Limited. The total 
goodwill is entirely attributable to the Out of Home business. 

If the discount rate were to increase by 10% the discounted cashﬂows would still exceed the carrying amount, likewise if the free 
cashﬂows were to reduce by 10% the discounted cashﬂows would still exceed the carrying amount.

Acquisitions

On 1 October 2012 the Group acquired 100% of the issued share capital of Festival Drinks Limited, a wholesaler of bag 
in box syrups and juices. 

Details of the net assets acquired and the goodwill are as follows:

Property, plant and equipment

Inventories

Trade and other receivables

Trade and other payables

Current tax liabilities

Cash

Net assets acquired

Cash consideration

Goodwill (see above)

Revenue of the acquiree since the acquisition date included in the consolidated statement of comprehensive 
income amounted to:

The proﬁt of the acquiree since the acquisition date included in the consolidated statement of comprehensive 
income amounted to:

The revenue for the Group as though the acquisition date had occurred at the beginning of the reporting period 
would have amounted to:

The proﬁt for the Group as though the acquisition date had occurred at the beginning of the reporting period 
would have amounted to:

Acquisition costs are not considered to be material but have been expensed in the income statement.

6
3

Fair value

£’000

132

152

326

(432)

(239)

221

160

2,475

2,315

767

95

1,892

392

 
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2012

12. INVESTMENTS: SHARES IN GROUP UNDERTAKINGS
Parent 
Cost and net book amount

At 1 January 2011

Additions

At 1 January 2012

Additions

At 31 December 2012

£’000

14,266

2,300

16,566

0

16,566

All non current investments relate to Group undertakings. Listed below are the trading subsidiaries and the ownership of their 
ordinary share capital by the Group.

Beacon Drinks Limited *

Ben Shaws Dispense Drinks Limited

Cabana Soft Drinks Limited **

Dayla Liquid Packing Limited

Festival Drinks Limited ***

The Company directly owns Ben Shaws Dispense Drinks Limited and Dayla Liquid Packing Limited. 
* Beacon Drinks Limited is directly owned by Beacon Holdings Limited. 
** Cabana Soft Drinks Limited is directly owned by Cabana (Holdings) Limited. 
*** Festival Drinks Limited is directly owned by Cabana Soft Drinks Limited. 
All Group undertakings are consolidated. 
The above companies and the parent company were all incorporated and operate in the United Kingdom. 
Particulars of non-trading companies are ﬁled with the annual return. 
All companies in the Group are engaged in the supply of soft drinks and other beverages.

%

100

100

100

100

100

3
7

NOTES TO THE FINANCIAL STATEMENTS 
YEAR ENDED 31 DECEMBER 2012

13. DEFERRED TAX ASSETS AND LIABILITIES 
MOVEMENT IN TEMPORARY DIFFERENCES DURING THE YEAR

Group

Property, plant and equipment

Goodwill

Employee beneﬁts

Provisions

Group

Property, plant and equipment

Goodwill

Employee beneﬁts

Provisions

Parent

Property, plant and equipment

Goodwill

Employee beneﬁts

Provisions

Parent

Property, plant and equipment

Goodwill

Employee beneﬁts

Provisions

Net balance at 1 
January 2012 
£’000

Recognised 
in income 
£’000

Recognised in other
comprehensive expense 
£’000

Net balance at 31
December 2012 
£’000

66

441

1,944

77

2,528

3

(58)

(442)

(8)

(505)

0

0

78

0

78

69

383

1,580

69

2,101

Net balance at 1 
January 2011 
£’000

Recognised 
in income 
£’000

Recognised in other
comprehensive expense 
£’000

Net balance at 31
December 2011 
£’000

83

1,170

1,179

83

2,515

(17)

(729)

(77)

(6)

(829)

0

0

842

0

842

66

441

1,944

77

2,528

Net balance at 1 
January 2012 
£’000

Recognised 
in income 
£’000

Recognised in other
comprehensive expense 
£’000

Net balance at 31
December 2012 
£’000

50

441

1,944

77

2,512

0

(58)

(442)

(8)

(508)

0

0

78

0

78

50

383

1,580

69

2,082

Net balance at 1 
January 2011 
£’000

Recognised 
in income 
£’000

Recognised in other
comprehensive expense 
£’000

Net balance at 31
December 2011 
£’000

82

1,170

1,179

83

2,514

(32)

(729)

(77)

(6)

(844)

0

0

842

0

842

50

441

1,944

77

2,512

Recognised deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:

Group

Assets

Liabilities

Net

Property, plant and equipment

Goodwill

Employee beneﬁts

Provisions

Current year 
£’000

Prior year 
£’000

Current year 
£’000

Prior year 
£’000

Current year 
£’000

Prior year 
£’000

116

383

1,580

69

2,148

117

441

1,944

77

2,579

(47)

(51)

0

0

0

0

0

0

(47)

(51)

69

383

1,580

69

2,101

66

441

1,944

77

2,528

Parent

Assets

Liabilities

Net

Current year 
£’000

Prior year 
£’000

Current year 
£’000

Prior year 
£’000

Current year 
£’000

Prior year 
£’000

50

383

1,580

69

2,082

50

441

1,944

77

2,512

0

0

0

0

0

0

0

0

0

0

50

383

1,580

69

2,082

50

441

1,944

77

2,512

Property, plant and equipment

Goodwill

Employee beneﬁts

Provisions

8
3

NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2012

14. INVENTORIES

Finished goods

Raw materials

Total inventories

Group

Parent

2012  

£’000

3,881

1,450

5,331

2011  
£’000

5,790

0

2012  

£’000

2,769

0

2011  
£’000

4,056

0

5,790

2,769

4,056

In 2012 the Group write-down of inventories to net realisable value amounted to £185,000 (2011: £198,000).

15. TRADE AND OTHER RECEIVABLES

Trade receivables

Amounts owed by Group undertakings

Other receivables

Prepayments and accrued income

Group

Parent

2012  

£’000

2011  
£’000

22,616

19,895

0

493

632

0

703

520

2012  

£’000

17,153

2,665

244

384

2011  
£’000

15,143

546

430

391

23,741

21,118

20,446

16,510

Other receivables include an amount of nil (2011: £39,000) due in more than one year. All other amounts above are short-term 
debt. The difference between the carrying value and fair value of all receivables is not considered to be material. 
All trade and other receivables have been reviewed for indicators of impairment and a provision of £1,031,000 (2011: £1,679,000) 
has been recorded accordingly in parent and Group. 

In addition, some of the unimpaired trade receivables are past due at the reporting date. The age of receivables past due but not 
impaired is as follows:

Group

Up to 30 days overdue

Over 30 days and up to 60 days overdue

Over 60 days and up to 90 days overdue

Parent

Up to 30 days overdue

Over 30 days and up to 60 days overdue

Over 60 days and up to 90 days overdue

Group

Bad debt provision

Group

Bad debt provision

Parent

Bad debt provision

Parent

Bad debt provision

At 1 January 2012 
£’000

Release in the year 
£’000

1,679

(594)

At 1 January 2011 
£’000

Charge in the year 
£’000

1,647

88

At 1 January 2012 
£’000

Release in the year 
£’000

1,577

(544)

At 1 January 2011 
£’000

Charge in the year 
£’000

1,553

26

Utilised 
£’000

(54)

Utilised 
£’000

(56)

Utilised 
£’000

(17)

Utilised 
£’000

(2)

2012  

£’000

3,232

131

(62)

3,301

2012  

£’000

3,139

115

(75)

3,179

2011  
£’000

2,607

579

(579)

2,607

2011  
£’000

1,695

328

(505)

1,518

At 31 December 2012  

£’000

1,031

At 31 December 2011  
£’000

1,679

At 31 December 2012  

£’000

1,016

At 31 December 2011  
£’000

1,577

3
9

NOTES TO THE FINANCIAL STATEMENTS 
YEAR ENDED 31 DECEMBER 2012

16. TRADE AND OTHER PAYABLES AND CURRENT TAX LIABILITIES

Trade payables

Amounts owed to Group undertakings

Other taxes and social security

Accruals and deferred income

Current tax liabilities

Group

Parent

2012 
£’000

3,877

0

1,635

13,865

19,377

2,191

2011 
£’000

5,968

0

1,037

13,068

20,073

1,752

2012 
£’000

3,203

3,383

1,121

12,720

20,427

1,368

2011 
£’000

4,430

3,906

506

12,312

21,154

1,138

21,568

21,825

21,795

22,292

All amounts shown above are short-term. The carrying values are considered to be a reasonable approximation of fair value. 

At 31 December 2012, liabilities have contractual maturities which are summarised below:

Group

Trade payables

Other short term ﬁnancial liabilities

Parent

Trade payables

Other short term ﬁnancial liabilities

17. PROVISIONS

Group

Exceptional cost provision

Parent

Exceptional cost provision

18. SHARE CAPITAL

2012

2011

Within 
6 months

£’000

3,877

13,865

17,742

Within 6 
to 12 
months

£’000

0

0

0

Within 
6 months

£’000

5,968

13,068

19,036

2012

2011

Within 
6 months

Within 6 
to 12 
months

Within 
6 months

£’000

3,203

12,720

15,923

£’000

0

3,383

3,383

£’000

4,430

12,312

16,742

Within 6 
to 12 
months

£’000

0

0

0

Within 6 
to 12 
months

£’000

0

3,906

3,906

At 1 January 
2012 
£’000

Charge in the 
year 
£’000

139

0

At 1 January 
2012 
£’000

Charge in the 
year 
£’000

99

0

Utilised 
£’000

(92)

Utilised 
£’000

(52)

At 31 December 2012  

£’000

47

At 31 December 2012  

£’000

47

2011 
£’000

5,200

3,697

2012 
£’000

5,200

3,697

Authorised 52,000,000 (2011: 52,000,000) 10p ordinary shares

Allotted, issued and fully paid 36,968,772 (2011: 36,968,772) 10p ordinary shares

The share capital of Nichols plc consists only of ordinary 10p shares.  All shares are equally eligible to receive dividends and the 
repayment of capital and represent one vote at shareholders’ meetings. 

There were no movements in the Group’s authorised and allotted, issued and fully paid share capital for the ﬁnancial years ending 
31 December 2012 and 31 December 2011.

0
4

 
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2012

19. SHARE OPTIONS
The Group operates a Save As You Earn (SAYE) scheme for all employees. The estimated fair values of options which fall under 
the IFRS 2 “Share-based payment” accounting charge and inputs used in the Binomial model to calculate those fair values, are as 
follows:

Save As You Earn Scheme

Number 
granted

Share price 
on grant 
date

Exercise 
price

Fair values 
on grant 
date

Vesting 
period

Expected 
dividend 
yield

Lapse 
rate

Risk 

free rate Volatility

11,398

46,776

9,008

27,177

8,970

18,179

18,925

£2.45 

£3.54 

£3.54 

£5.58 

£5.58 

£7.08 

£7.08 

£1.77 

£2.83 

£2.83 

£3.85 

£3.85 

£5.04 

£5.04 

£0.65  5.00 years

3.43% 5.00%

4.37% 20.31%

£0.70  3.00 years

3.43% 5.00%

2.25% 25.70%

£0.69  5.00 years

3.43% 5.00%

4.75% 25.70%

£1.73  3.00 years

2.43% 5.00%

2.75% 32.94%

£1.73  5.00 years

2.43% 5.00%

1.75% 32.94%

£2.04  3.00 years

2.16% 5.00%

0.66% 30.63%

£2.04  5.00 years

2.16% 5.00%

1.01% 30.63%

Date of Grant

1 September 2008

1 June 2010

1 June 2010

1 June 2011

1 June 2011

1 June 2012

1 June 2012

Expected volatility

The volatility of the Company’s share price on each date of grant was calculated as the average of annualised standard deviations 
of daily continuously compounded returns on the Company’s stock, calculated over ﬁve years back from the date of the grant, 
where applicable.

Risk-free rate

The risk-free rate is the yield to maturity on the date of grant of a UK Gilt Strip, with term to maturity equal to the life of the option. 

Expected life

The expected life of a SAYE option is equal to the vesting period plus a six month exercise period.

Date of grant:

1 September 2008

1 June 2010

1 June 2011

1 June 2012

At 1 January 
2012

Granted

Exercised

Lapsed

At 31 December 
2012

Exercise price 
per share

4,044

52,578

36,147

0

92,769

0

0

0

37,104

37,104

0

(867)

(240)

0

0

(5,736)

(6,566)

(6,855)

(1,107)

(19,157)

4,044

45,975

29,341

30,249

109,609

177p

283p

385p

504p

Options are exercisable at the end of a three or ﬁve year savings contract commencing on the date of grant and for a period of six 
months thereafter.           
The share price during 2012 varied between 530p and 883p and the weighted average price for the year was 728p. 
At 31 December 2012, options over 109,609 shares were outstanding under Employee Share Option Plans (2011: 92,769).

Outstanding on 1 January

Granted

Exercised

Lapsed

Outstanding on 31 December

20. CASH AND CASH EQUIVALENTS

Group

Cash at bank and in hand

Parent

Cash at bank and in hand

2012

2011

Weighted average 
exercise price 
in pence

Number

Weighted average 
exercise price 
in pence

318.12

130,635

504.00

36,147

305.11

(73,620)

397.04

367.38

(393)

92,769

224.77

385.00

186.00

188.22

318.12

Number

92,769

37,104

(1,107)

(19,157)

109,609

At 1 January 2012 
£’000

Cash ﬂow 
£’000

20,111

4,634

At 31 December 2012  

£’000

24,745

At 1 January 2012 
£’000

Cash ﬂow 
£’000

17,871

4,077

At 31 December 2012  

£’000

21,948

4
1

NOTES TO THE FINANCIAL STATEMENTS 
YEAR ENDED 31 DECEMBER 2012

21. FINANCIAL INSTRUMENTS
Exposure to treasury management, liquidity, credit and currency risks arises in the normal course of the Group’s business.

Treasury management 

The Group’s treasury activities are targeted to provide suitable, ﬂexible funding arrangements to satisfy the Group’s requirements.  
Interest rate and liquidity risk are managed at a Group level. Foreign currency risk is managed, in consultation with Group 
management, in subsidiaries which are responsible for the majority of purchases. The Group’s policy for investing any surplus cash 
balances is to place such amounts on deposit. 

Liquidity risk 

The Group seeks to manage ﬁnancial risk to ensure sufﬁcient liquidity is available to meet foreseeable needs.  The acquisition 
of companies and the continuing investment in non-current assets will be achieved by a mix of operating cash and short term 
borrowing facilities.  Short term ﬂexibility is achieved by bank overdraft.

Credit risk 

The Group has no signiﬁcant concentrations of credit risk.  The Group has implemented stringent policies that ensure that credit 
evaluations are performed on all potential customers before sales commence.  Credit risk is managed by limiting the aggregate 
exposure to any one individual counterparty, taking into account its credit rating.  Such counterparty exposures are regularly 
reviewed and adjusted as necessary.  Accordingly, the possibility of material loss arising in the event of non-performance by 
counterparties is considered to be unlikely.  Cash at bank is held only with major UK banks with high quality external credit ratings 
or government support. 

Foreign currency risk 

The Group is exposed to foreign currency risk on sales and purchases that are denominated in a currency other than the 
functional currency of the Group. The currencies giving rise to this risk are primarily US Dollars (USD) and Euros (€). During 2012 the 
Group entered into foreign currency transactions that over the course of the year resulted in the Group having a natural hedge. 
This then meant the Group did not need to enter into forward contracts to minimise the impact of movements in foreign currency 
rates on the spot market. During 2011 the Group used forward exchange contracts to hedge its foreign currency risk. Forward 
purchase contracts in US Dollars were made to cover at least the full year of projected purchases. The forward foreign currency 
purchase contracts, which were a mixture of ﬁrm contracts and conditional options, matured in line with expected purchases.

Foreign currency assets

US Dollar

Euro

Chinese Yuan

Foreign currency sensitivity

2012 
£’000

2,565

2,150

1

4,716

2011 
£’000

2,199

918

1

3,118

Some of the Group’s transactions are carried out in US Dollars, Euros and Chinese Yuan. 
As a result, management have undertaken sensitivity analysis to consider the ﬁnancial impact if Sterling had both strengthened 
and weakened against the US Dollar, the Euro and the Chinese Yuan. 

If Sterling had strengthened against the US Dollar, Euro and Chinese Yuan by 5% (2011: 5%), then this would have had the following 
impact:

Net result for the year

USD

(122)

Euro

(102)

CNY

0

Total

(224)

USD

(104)

Euro

(44)

CNY

0

Total

(148)

2012 
£’000

2011 
£’000

If Sterling had weakened against the US Dollar, Euro and Chinese Yuan by 5% (2011: 5%), then this would have had the following 
impact:

Net result for the year

USD

135

Euro

114

CNY

1

Total

250

USD

116

Euro

48

CNY

1

Total

165

2012 
£’000

2011 
£’000

Exposures to foreign exchange rates vary during the year depending on the volume of overseas transactions. Nonetheless, the 
analysis above is considered to be representative of the Group’s exposure to currency risk.

2
4

 
 
 
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2012

22. SUMMARY OF FINANCIAL ASSETS AND LIABILITIES BY CATEGORY

The IAS 39 categories of ﬁnancial assets included in the balance sheet and the 
headings in which they are included are as follows:

Current assets

Trade receivables and other receivables

Cash and cash equivalents

Total ﬁnancial assets

The IAS 39 categories of ﬁnancial liability included in the balance sheet and the 
headings in which they are included are as follows:

Current liabilities 
Other ﬁnancial liabilities at amortised cost

Trade and other payables

Amounts owed to Group undertakings

Total ﬁnancial liabilities

Group

Parent

2012 
£’000

23,109

24,745

47,854

2011 
£’000

2012 
£’000

20,599

20,062

20,111

40,710

21,948

42,010

2011 
£’000

16,119

17,871

33,990

Group

Parent

2012 
£’000

3,877

0

2011 
£’000

5,968

0

3,877

5,968

2012 
£’000

3,203

3,383

6,586

2011 
£’000

4,430

3,906

8,336

23. CAPITAL MANAGEMENT POLICIES AND PROCEDURES
The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the 
return to stakeholders through the optimisation of the debt and equity balance. This strategy remains unchanged from 2011. 

At 31 December 2012 the Group had no debt and therefore the capital structure consists of equity only. 

The directors regularly monitor the level of net assets of the Company in accordance with Section 656 of the Companies Act 
2006 (Serious Loss of Capital).

24. OPERATING LEASES
Non-cancellable operating lease rentals are payable as follows:

Within one year

Between two and ﬁve years

More than ﬁve years

Group

Parent

2012 
£’000

2011  
£’000

2012 
£’000

2011  
£’000

822

444

63

865

993

95

1,329

1,953

627

215

0

842

669

752

0

1,421

The Group leases its headquarters, Laurel House, under a non-cancellable operating lease agreement and also leases dispensing 
and certain other plant and equipment under non-cancellable operating lease agreements which have varying terms, escalation 
clauses and renewal rights.

25. RELATED PARTY TRANSACTIONS
Parent company

The parent company entered into the following transactions with subsidiaries during the year:

Sale of goods and services (including recharge of costs)

All balances with the related parties are on an arm’s length basis.

Transaction value 
Year ended  
31 December 

 Balance outstanding 
as at  
31 December 

2012 
£’000

1,734

2011 
£’000

1,627

2012 
£’000

718

2011 
£’000

3,360

4
3

 
 
NOTES TO THE FINANCIAL STATEMENTS 
YEAR ENDED 31 DECEMBER 2012

26. EMPLOYEE BENEFITS
The Group operates two employee beneﬁt plans, a deﬁned beneﬁt plan which provides beneﬁts based on ﬁnal salary which is now 
closed to new members and a deﬁned contribution Group personal plan. 
The Group personal plan consists of individual contracts with contributions from both the employer and employee. 
The charge for the year for the Group personal plan was £261,000 (2011: £215,000). 

The Company operates a deﬁned beneﬁt plan in the UK. A full actuarial valuation was carried out on 5 April 2011 and updated at 31 
December 2012 by an independent qualiﬁed actuary. The Company paid an additional £0.9 million into the plan in the year (2011: 
£0.9 million) and will continue to monitor the deﬁcit.        

The principal actuarial assumptions used by the actuary at the reporting date (expressed as weighted averages) 
were as follows:

Future salary increases

Rate of increase in (post 1997) pensions in payment (a)

Discount rate at 31 December

Expected rate of inﬂation

Overall expected return on plan assets

31 
December 
2012

31 
December 
2011

31 
December 
2010

2.90%

3.40%

4.30%

2.90%

4.30%

3.05%

3.40%

4.70%

3.05%

4.40%

4.45%

3.40%

5.40%

3.40%

5.90%

The expected return on plan assets is based on the long term rates of return on the market values of equities, ﬁxed interest 
assets, corporate bonds and cash and other assets at 31 December. 

Other material actuarial assumptions were the rate of salary increases and mortality assumptions. 

In terms of future salary increases, the actuary is recommending an assumption of approximately 1% in excess of inﬂation based 
on historic differences between price inﬂation and salary inﬂation.  

Assumptions regarding future mortality experience are set based on the advice of actuaries and in accordance with published 
statistics. 
Life expectancies have been estimated as 90 years for men (2011: 88 years) and 92 years for women (2011: 90 years). 

(a) Increases on pre-6 April 1997 pensions are ﬁxed at 3% per annum. Post-6 April 1997 increases are in line with price inﬂation, 
subject to a minimum of 3% and a maximum of 5%. 

Over the year the Company contributed to the plan at the rate of 18.6% of salaries. The charge to the consolidated income 
statement was £107,000 (2011: £119,000). The Company will continue to contribute at this rate pending the results of the next 
actuarial valuation. The plan is now closed to new entrants. This means that the average age of the membership can be expected 
to rise which in turn means that the future service cost (as a percentage of scheme members’ pensionable salaries) can be 
expected to rise. 

The assets of the Group’s deﬁned beneﬁt plan and the expected rates of return on these assets are summarised 
as follows:

Long term rate of return expected at

31  
December 
2012

31  
December 
2011

31  
December 
2010

31  
December 
2009

31  
December 
2008

5.50%

2.50%

3.90%

0.50%

5.60%

2.60%

4.50%

0.50%

6.90%

3.90%

5.20%

0.50%

7.20%

4.20%

5.40%

0.50%

6.60%

3.60%

6.50%

1.50%

Market value of assets at

31  
December 
2012 
£’000

31  
December 
2011 
£’000

31  
December 
2010 
£’000

31  
December 
2009 
£’000

31  
December 
2008 
£’000

12,168

1,579

3,621

2,483

19,851

11,207

993

2,570

3,053

12,511

1,938

1,983

1,463

11,004

1,772

1,800

963

8,826

1,610

1,502

602

17,823

17,895

15,539

12,540

Equity securities

Gilts

Government bonds

Cash and other

Equity securities

Gilts

Government bonds

Cash and other

4
4

 
 
 
 
 
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2012

26. EMPLOYEE BENEFITS (CONT)
The following amounts were measured in accordance with IAS 19 “Employee beneﬁts”. 

The amounts recognised in the statement of ﬁnancial position are determined as follows:

Fair value of plan assets

31  
December 
2012 
£’000

31  
December 
2011 
£’000

31  
December 
2010 
£’000

31  
December 
2009 
£’000

31  
December 
2008 
£’000

19,851

17,823

17,895

15,539

12,540

Present value of deﬁned beneﬁt obligations

(26,407)

(24,136)

(22,030)

(20,283)

(16,107)

Recognised liability for deﬁned beneﬁt obligations

(6,556)

(6,313)

(4,135)

(4,744)

(3,567)

The expense is recognised in the following line items in the consolidated income statement:

2012 
£’000

2011 
£’000

2010 
£’000

2009 
£’000

2008 
£’000

Operating proﬁt

Current service costs

Total operating charge

Finance expense

Expected return on plan assets

Interest on obligation

Total ﬁnance expense

Total charge to the consolidated income statement

(107)

(107)

793

(1,124)

(331)

(438)

(119)

(119)

1,059

(1,175)

(116)

(235)

Group consolidated statement of comprehensive income

Actual return less expected return on plan assets

Experience gains and losses arising on plan liabilities

821

396

(1,460)

96

(84)

(84)

1,102

(1,145)

(43)

(127)

(110)

(110)

(56)

(56)

979

737

(1,142)

(1,068)

(331)

(387)

(163)

(273)

1,033

(72)

1,901

120

(4,782)

1,113

Changes in the assumptions underlying the present value of the 
plan liabilities

Actuarial movement in deﬁned beneﬁt plan recognised in 
statement of comprehensive income

(1,990)

(1,562)

(887)

(3,586)

2,383

(773)

(2,926)

74

(1,565)

(1,286)

The movement during the year in the liability for deﬁned beneﬁt obligations was as follows:

2012 
£’000

2011 
£’000

2010 
£’000

2009 
£’000

2008 
£’000

Liability for deﬁned beneﬁt obligations at 1 January

(6,313)

(4,135)

(4,744)

(3,567)

(3,635)

Current service costs

Contributions paid into the plan

Gain on settlement of obligations

Other ﬁnance costs

(107)

968

0

(331)

(119)

983

0

(116)

(110)

808

0

(163)

(56)

775

0

(331)

(84)

672

809

(43)

Actuarial (loss)/gain recognised in statement of comprehensive 
income

Liability for deﬁned beneﬁt obligations at 31 December

(773)

(6,556)

(2,926)

(6,313)

74

(4,135)

(1,565)

(4,744)

(1,286)

(3,567)

The movement during the year in the present value of the plan assets was as follows:

Opening fair value of plan assets

Expected return on plan assets

Actuarial gain/(loss)

Contributions by the Group

Assets distributed on settlement of obligations

2012 
£’000

17,823

793

821

414

0

2011 
£’000

17,895

1,059

(1,460)

329

0

2010 
£’000

2009 
£’000

15,539

12,540

979

1,033

344

0

737

1,901

361

0

2008 
£’000

16,570

1,102

(4,782)

417

(767)

Closing fair value of plan assets

19,851

17,823

17,895

15,539

12,540

4
5

 
NOTES TO THE FINANCIAL STATEMENTS 
YEAR ENDED 31 DECEMBER 2012

26. EMPLOYEE BENEFITS (CONT)
The movement during the year in the present value of deﬁned beneﬁt obligations was as follows:

Opening deﬁned beneﬁt obligations

Current service costs

Contributions by participants

Other ﬁnance costs

Actuarial loss/(gain)

Liabilities discharged on settlement

Closing deﬁned beneﬁt obligations

Difference between expected and actual return on plan 
assets

Amount

Percentage of plan assets

Experience gains and losses on plan liabilities

Amount

Percentage of present value of plan liabilities

Gain and losses on changes in assumptions

Amount

Percentage of present value of plan liabilities

Total actuarial gains and losses

Amount

Percentage of present value of plan liabilities

2012 
£’000

2011 
£’000

2010 
£’000

24,136

22,030

20,283

107

(554)

1,124

1,594

0

119

(654)

1,175

1,466

0

110

(464)

1,142

959

0

2009 
£’000

16,107

56

(414)

1,068

3,466

0

26,407

24,136

22,030

20,283

2012 
£’000

821

4.1%

2011 
£’000

(1,460)

(8.2%)

2010 
£’000

1,033

5.8%

396

1.5%

96

0.4%

(72)

(0.3%)

2009 
£’000

1,901

12.2%

120

0.6%

(1,990)

(7.5%)

(1,562)

(6.5%)

(887)

(4.0%)

(3,586)

(17.7%)

2008 
£’000

20,205

84

(255)

1,145

(3,496)

(1,576)

16,107

2008 
£’000

(4,782)

(38.1%)

1,113

6.9%

2,383

14.8%

(773)

(2.9%)

(2,926)

(12.1%)

74

0.3%

(1,565)

(7.7%)

(1,286)

(8.0%)

6
4

UNAUDITED FIVE YEAR SUMMARY

YEARS ENDED 31 DECEMBER

Revenue

2012 
£’000

2011 
£’000

2010 
£’000

2009 
£’000

2008 
£’000

107,788

98,912

83,899

72,378

56,221

Operating proﬁt before exceptional items, IAS 19 and long term 
incentive charges

21,741

19,038

15,426

12,891

Exceptional items

IAS 19 operating proﬁt charges

Long term incentive charges

0

(107)

(1,117)

0

(119)

(770)

(293)

(110)

(199)

Operating proﬁt after exceptional items, IAS 19 and long term 
incentive charges

20,517

18,149

14,824

Net ﬁnance (expense)/income

Proﬁt before taxation

Taxation

Proﬁt after taxation

Dividends paid

Retained proﬁt/(loss)

Earnings per share - (basic)

Earnings per share - (diluted)

Earnings per share - (basic) before exceptional items

Earnings per share - (diluted) before exceptional items

Dividends paid per share

(7)

20,510

(5,252)

15,258

(5,866)

9,392

41.43p

41.38p

41.43p

41.38p

15.92p

(44)

18,105

(4,779)

13,326

(5,195)

8,131

36.28p

36.25p

36.28p

36.25p

14.10p

(34)

14,790

(3,966)

10,824

(4,601)

6,223

29.63p

29.59p

30.22p

30.18p

12.55p

(293)

(56)

(334)

12,208

(282)

11,926

(3,572)

8,354

(4,193)

4,161

22.86p

22.57p

23.44p

23.15p

11.45p

10,431

(5,940)

(84)

(543)

3,864

234

4,098

(1,141)

2,957

(3,914)

(957)

8.10p

8.10p

20.03p

20.01p

10.65p

4
7

NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the twenty ﬁrst Annual General Meeting of Nichols plc (“Company”) will be held at its registered 
ofﬁce at Laurel House, Woodlands Park, Ashton Road, Newton le Willows, WA12 0HH on Wednesday, 1 May 2013 at 11:00 
a.m. for the following purposes:  

To consider and, if thought ﬁt, to pass the following resolutions as ordinary resolutions: 

1. 

2. 

3. 

4. 

5. 

6. 

7. 

8. 

To receive the Company’s annual accounts and directors’ and auditor’s reports for the year ended 31 December   
2012.

To declare a ﬁnal dividend for the year ended 31 December 2012 of 11.7 pence per ordinary share of 10 pence in 
the capital of the Company to be paid on 3 May 2013 to shareholders whose names appear on the register of 
members at the close of business on 2 April 2013.

To re-elect E J Healey, who retires by rotation, as a director of the Company.

To re-elect J Longworth, who retires by rotation, as a director of the Company.

To reappoint M-J Millard, who has been appointed by the Board since the last Annual General Meeting, as a  
director of the Company.

To reappoint Grant Thornton UK LLP as auditors of the Company.

To authorise the directors to determine the remuneration of the auditors.

That, pursuant to section 551 of the Companies Act 2006 (“Act”), the directors be and are generally and  
unconditionally authorised to exercise all powers of the Company to allot shares in the Company or to grant rights 
to subscribe for or to convert any security into shares in the Company up to an aggregate nominal amount of 
£1,219,969, provided that (unless previously revoked, varied or renewed) this authority shall expire at the  
conclusion of the next annual general meeting of the Company after the passing of this resolution or on 1 August 
2014 (whichever is the earlier), save that the Company may make an offer or agreement before this authority 
expires which would or might require shares to be allotted or rights to subscribe for or to convert any security into 
shares to be granted after this authority expires and the directors may allot shares or grant such rights pursuant 
to any such offer or agreement as if this authority had not expired.  This authority is in substitution for all existing 
authorities under section 551 of the Act  (which, to the extent unused at the date of this resolution, are revoked    
with immediate effect).  

To consider and, if thought ﬁt, to pass the following resolutions as special resolutions:

That, subject to the passing of resolution 8 and pursuant to sections 570 and 573 of the Companies Act 2006  
(“Act”), the directors be and are generally empowered to allot equity securities (within the meaning of section 560 
of the Act) for cash pursuant to the authority granted by resolution 8 and to sell ordinary shares held by the 
Company as treasury shares for cash, as if section 561(1) of the Act did not apply to any such allotment or sale, 
provided that this power shall be limited to the allotment of equity securities or sale of treasury shares:

in connection with an offer of equity securities (whether by way of a rights issue, open offer or otherwise):

to holders of ordinary shares in the capital of the Company in proportion (as nearly as practicable) to the respective 
numbers of ordinary shares held by them; and

to holders of other equity securities in the capital of the Company, as required by the rights of those securities or, 
subject to such rights, as the directors otherwise consider necessary, but subject to such exclusions or other 
arrangements as the directors may deem necessary or expedient in relation to treasury shares, fractional  
entitlements, record dates or any legal or practical problems under the laws of any territory or the requirements of  
any regulatory body or stock exchange; and

otherwise than pursuant to paragraph 9.1 of this resolution, up to an aggregate nominal amount of £184,843, and 
(unless previously revoked, varied or renewed) this power shall expire at the conclusion of the next annual general 
meeting of the Company after the passing of this resolution or on 1 August 2014 (whichever is the earlier), save that 
the Company may make an offer or agreement before this power expires which would or might require equity 
securities to be allotted or treasury shares to be sold for cash after this power expires and the directors may allot 
equity securities or sell treasury shares for cash pursuant to any such offer or agreement as if this power had not 
expired. This power is in substitution for all existing powers under section 570 and 573 of the Act (which, to the 
extent unused at the date of this resolution, are revoked with immediate effect).

That, pursuant to section 701 of the Companies Act 2006 (“Act”), the Company be and is generally and    
unconditionally authorised to make market purchases (within the meaning of section 693(4) of the Act) of ordinary 
shares of 10p each in the capital of the Company (“Shares”), provided that:

the maximum aggregate number of Shares which may be purchased is 3,696,877; 

the minimum price (excluding expenses) which may be paid for a Share is 10p;

9. 

9.1 

9.1.1 

9.1.2 

9.2 

10. 

10.1 

10.2 

8
4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GENERAL NOTES

10.3 

the maximum price (excluding expenses) which may be paid for a Share is an amount equal to 105 per cent of the  
average of the middle market quotations for a Share as derived from the Daily Ofﬁcial List of the London Stock  
Exchange plc for the ﬁve business days immediately preceding the day on which the purchase is made, and 
(unless previously revoked, varied or renewed) this authority shall expire at the conclusion of the next annual 
general meeting of the Company after the passing of this resolution or on 1 August 2014 (whichever is the earlier),  
save that the Company may enter into a contract to purchase Shares before this authority expires under which 
such purchase will or may be completed or executed wholly or partly after this authority expires and may make a 
purchase of Shares pursuant to any such contract as if this authority had not expired.

By order of the Board

T J Croston
Secretary

27 March 2013

Registered ofﬁce
Laurel House
Woodlands Park
Ashton Road
Newton le Willows
WA12 0HH              

Registered in England and Wales No. 238303

General Notes

1. 

2. 

3. 

4. 

5. 

6. 

7. 

Copies of the executive directors’ service agreements and non-executive directors letters of appointment will be  
available for inspection at the registered ofﬁce of the Company during normal business hours (excluding weekends  
and public holidays) from the date of this notice until the conclusion of the Annual General Meeting.

The right to vote at the meeting is determined by reference to the register of members. Only those shareholders   
registered in the register of members of the Company as at 6:00 p.m. on Monday, 29 April 2013 (or, if the meeting 
is adjourned, 6:00 p.m. on the date which is two working days before the date of the adjourned meeting) shall be 
entitled to attend and vote at the meeting in respect of the number of shares registered in their name at that time. 
Changes to entries in the register of members after that time shall be disregarded in determining the rights of any 
person to attend or vote (and the number of votes they may cast) at the meeting.

A member is entitled to appoint another person as his or her proxy to exercise all or any of his rights to attend, 
speak and vote at the meeting.  A proxy need not be a member of the Company. A member may appoint more 
than one proxy in relation to the meeting provided that each proxy is appointed to exercise the rights attached to 
a different share or shares held by him or her.  To appoint more than one proxy, you will need to complete a 
separate proxy form in relation to each appointment.  Additional proxy forms may be obtained from the Company’s 
registrar at shareholder.services@capitaregistrars.com or on 0871 664 0300 (calls cost 10p per minute plus 
network extras.  Lines are open 8:30 a.m. – 5:30 p.m., Monday - Friday) or you may photocopy the proxy form 
already in your possession. You will need to state clearly on each proxy form the number of shares in relation to 
which the proxy is appointed. A failure to specify the number of shares each proxy appointment relates to or 
specifying a number which when taken together with the number of shares set out in the other proxy 
appointments is in excess of those held by the member, may result in the proxy appointment being invalid. A proxy 
may only be appointed in accordance with the procedures set out in notes 4 to 8 below and the notes to the form 
of proxy. 

The appointment of a proxy will not preclude a member from attending and voting in person at the meeting if he or  
she so wishes.

A form of proxy is enclosed. To be valid, it must be completed, signed and sent to the ofﬁces of the Company’s    
registrars, Capita Registrars, PXS, 34 Beckenham Road, Beckenham, Kent BR3 4TU so as to arrive no later than 
11:00 a.m. on Monday 29 April 2013 (or, in the event that the meeting is adjourned, no later than 48 hours before   
the time of any adjourned meeting).

CREST members who wish to appoint a proxy or proxies for the meeting (or any adjournment of it) through the 
CREST electronic proxy appointment service may do so by using the procedures described in the CREST Manual. 
CREST personal members or other CREST sponsored members, and those CREST members who have appointed 
a voting service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to 
take the appropriate action on their behalf.

In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate CREST 
message (a “CREST Proxy Instruction”) must be properly authenticated in accordance with Euroclear UK & Ireland 
Limited’s speciﬁcations and must contain the information required for such instructions, as described in the 
CREST Manual. The message, regardless of whether it constitutes the appointment of a proxy or is an amendment  
to the instruction given to a previously appointed proxy, must, in order to be valid, be transmitted so as to be 
received by the Company’s Registrar, Capita Registrars (CREST ID RA10) no later than 11:00 a.m. on Monday 
29 April 2013 (or, if the meeting is adjourned, no later than 48 hours before the time of any adjourned meeting). 
For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the 

4
9

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GENERAL NOTES & DIRECTIONS TO THE ANNUAL 
GENERAL MEETING

message by the CREST Applications Host) from which Capita Registrars is able to retrieve the message by enquiry 
to CREST in the manner prescribed by CREST.  After this time, any change of instructions to proxies appointed 
through CREST should be communicated to the appointee through other means. 
CREST members and, where applicable, their CREST sponsors or voting service providers should note that 
Euroclear UK & Ireland Limited does not make available special procedures in CREST for any particular messages 
Normal system timings and limitations will therefore apply in relation to the input of CREST Proxy Instructions. It is 
the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member  
or sponsored member or has appointed a voting service provider(s), to procure that his or her CREST sponsor or 
voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by 
means of the CREST system by any particular time.  In this connection, CREST members and, where applicable,    
their CREST sponsors or voting service providers are referred, in particular, to those sections of the CREST Manual 
concerning practical limitations of the CREST system and timings.

The Company may treat a CREST Proxy Instruction as invalid in the circumstances set out in Regulation 35(5)(a) of  
the Uncertiﬁcated Securities Regulations 2001.

A shareholder which is a corporation may authorise one or more persons to act as its representative(s) at the 
meeting. Each such representative may exercise (on behalf of the corporation) the same powers as the 
corporation could exercise if it were an individual shareholder, provided that (where there is more than one 
representative and the vote is otherwise than on a show of hands) they do not do so in relation to the same  
shares. 

As at 22 March 2013 (being the last practicable date before the publication of this notice), the Company’s issued 
share capital consists of 36,968,772 ordinary shares of 10 pence each, carrying one vote each. As the Company 
holds 144,747 ordinary shares in treasury, in respect of which it cannot exercise any votes, the total voting rights in 
the Company as at 22 March 2013 are 36,824,025. 

You may not use any electronic address provided either in this notice of general meeting or any related documents 
(including the form of proxy) to communicate with the Company for any purposes other than those expressly 
stated.

8. 

9. 

10. 

11. 

North

A 4 9

A580

M6
J23

A580

To Manchester

A49

Laurel
House

T

o

N

e

w

t

o

n

-

l

e

-

W
ill

o

w

s

south

LEAVE THE M6 AT JUNCTION 
23 AND TAKE THE A49 SOUTH 
TOWARDS NEWTON.  

WOODLANDS PARK IS ON THE
LEFT IN APPROXIMATELY 0.3
MILES.

ON ENTERING THE ESTATE,
LAUREL HOUSE IS ACCESSED
FROM THE FOURTH EXIT OF
THE ROUNDABOUT.

0
5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
i

f
N
a
N
c
a
l

i

c
a
l
e
N
d
a
r

PRELImINARy RESuLTS
ANNOuNcED

7TH mARcH 2013

ANNuAL GENERAL 
mEETING

1ST mAy 2013

INTERIm RESuLTS 
ANNOuNcED

25TH JuLy 2013

Laurel House / Woodlands Park / Ashton Road / Newton-le-willows / merseyside / WA12 0HH
01925 22 22 22 / www.nicholsplc.co.uk