2015
ANNUAL REPORT
& FINANCIAL
STATEMENTS.
1
THE GROUP
Nichols plc is an international soft drinks business with
sales in over 70 countries, selling products in both the Still
and Carbonate categories.
The Group is home to the iconic Vimto brand which is popular in the UK and
around the world, in particular in the Middle East and Africa. Other brands in its
portfolio include Feel Good, Panda, Starslush, Levi Roots and Sunkist.
2
CONTENTS
04
STRATEGIC
REPORT.
36
AUDITOR’S
REPORT.
Chairman’s Statement
Chief Executive’s Review
Financial Review
38
FINANCIAL
STATEMENTS.
30
DIRECTORS.
68
NOTICE OF
MEETING.
32
DIRECTORS’
REPORT.
71
FINANCIAL
CALENDAR.
3
STRATEGIC REPORT
4
PERFORMANCE
(Pre-exceptional items)
Exceptional items of £nil (2014: £7.8m) are explained in note 4 of the financial statements.
Group
Revenue
Operating
Profit
Operating
Profit R.O.S
2014 109.2m
2014 25.6m
2014 23%
2015 109.3m
+0.1%
2015 27.8m
+8.7%
2015 25%
Profit
Before Tax
Net Cash
EPS (basic)
2014 25.7m
2014 34.5
2014 55.03p
2015 28.0m
+8.9%
2015 35.4
2015 60.33p
+9.6%
5
STRATEGIC REPORT
Chairman’s Statement
The Group has continued to perform well
during 2015 increasing profit before tax pre
exceptional items by 8.9% compared to the
prior year; this has been achieved despite the
challenges faced in both the UK and in our
Yemeni markets.
JOHN NICHOLS
Non-Executive Chairman
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I am pleased to report that the Group delivered another strong
performance in 2015. Our international sales were up 3.9% year on year
(on a constant currency basis), Group profit before tax pre exceptional
items increased by 8.9% and we successfully completed two acquisitions.
Trading
Total Group revenue was £109.3m and profit
before tax increased 8.9% to £28.0m (2014: £25.7m
pre exceptional items). Whilst the headline sales
performance was marginally ahead of the prior year,
it is important to note that our profit growth was
driven by trading activities which delivered a gross
profit increase of 5.6% (£2.8m).
In the UK markets, sales totalled £84.8m, slightly
below (-0.3%) the prior year’s value of £85.1m
but ahead of the total UK soft drinks market
performance which declined by 0.6% (Nielsen
year to 2 January 2016). Continuing our strategy
of value over volume has once again delivered
margin growth. This has been achieved by focusing
on the growth of our Still products and limiting
our participation in deep promotional activity,
particularly in Carbonate. Also, and with a view
to our future growth, we acquired the Feel Good
brand in July 2015, which is an established range of
premium still and carbonate juice drinks containing
no added sugar and 100% natural ingredients. We
are putting increased investment behind Feel Good
and plan to re-launch in the summer of 2016.
The ongoing challenges in the UK grocery market
have been widely reported and emphasise the
importance of maintaining a diverse business which
is not overly reliant on one market. I am therefore
delighted to report that our international sales
increased by 3.9% to £24.5m (constant currency
basis – calculated by translating prior year non-
sterling sales at this year’s average exchange
rate) during the year (1.6% on a reported basis).
This performance was delivered from both of our
core export markets being the Middle East and
Africa. Trading in the Middle East was particularly
encouraging given the difficulties in shipping to the
Yemen due to the civil unrest in that region.
Full Acquisition
Having taken an initial 49% share in The Noisy Drinks
Company Limited (Noisy) in March 2015, which
is equity accounted as an associate investment
at the year end, we are pleased to announce that
the remaining equity was purchased on 8 January
2016. This additional investment is a key step in our
strategy to enhance our Out of Home proposition.
As a result, we can now offer our customers a
unique portfolio of Still and Carbonate products
UK MARKET
SALES TOTALLED
INTERNATIONAL
SALES INCREASED
PROFIT BEFORE TAX
INCREASED BY
£84.8M
3.9%
8.9%
including dispensed soft drinks, packaged soft drinks
and frozen drinks.
Noisy is the UK’s leading frozen drinks business,
supplying the Starslush brand to a number of
prestigious customers in both the UK and mainland
Europe. In addition to enhancing our product
portfolio, the acquisition of Noisy strengthens our
supply chain capabilities as the business has an
established UK network facilitating direct access to
customers on a national basis.
in our brands, across the still and carbonate product
range, to support distribution growth both in the UK
and our export markets. We will also complete the
integration of Noisy (acquired in full in January 2016)
and the Feel Good brand into the business, both of
which will have a positive impact on revenue during
the year.
In summary, the Board is pleased with the 2015
performance and is confident that the Group is well
placed to continue the trend into 2016.
John Nichols
Non-Executive Chairman
2 March 2016
Dividend
The Group has delivered another strong
performance in 2015 and as a reflection of the
Board’s continued confidence in the outlook, I am
pleased to recommend a final dividend of 17.6 pence
per share (2014: 15.3 pence). If accepted by our
shareholders, the total dividend for 2015 will be 25.6
pence (2014: 22.4 pence), an increase of 14.3% on
the prior year.
Subject to shareholder approval, the final dividend
will be paid on 3 May 2016 to shareholders
registered on 1 April 2016; the ex-dividend date is 31
March 2016.
Outlook
The Group has continued to perform well during
2015 increasing profit before tax pre exceptional
items by 8.9% compared to the prior year; this has
been achieved despite the challenges faced in both
the UK and in our Yemeni markets.
During 2016 we will continue to implement our
growth strategy which includes further investment
9
STRATEGIC REPORT
Chief Executive’s Review
The Vimto brand heritage remains strong.
Created in 1908, it is as relevant in today’s
global market as it was 108 years ago.
Distributed to over 75 markets, Vimto is
loved from Manchester to Mali.
MARNIE MILLARD
Chief Executive Officer
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Nichols continued to make good progress during the year despite
some challenging market conditions particularly in the UK market.
The Group delivered profit before tax growth pre exceptional items of
8.9%, earnings per share growth of 9.6% and retains its robust financial
position with £35.4m cash in the bank.
Acquisition formed a large piece of activity for
the Group during the year which underpins future
growth for the business. The diversification of the
organisation remains our core strength, which
ensures we are not reliant on one customer, one
route to market or one geographical region. The
addition of the Feel Good brand strengthens the
Brand Portfolio and the integration of Noisy brings
new customers and products into our Vimto Out of
Home business.
The Vimto brand heritage remains strong. Created
in 1908, it is as relevant in today’s global market as
it was 108 years ago. Distributed to over 75 markets,
Vimto is loved from Manchester to Mali.
The UK Soft Drinks Market
In 2015, volumes in the UK soft drinks market
increased by 0.6% (as measured by Nielsen MAT
to 2 January 2016). The total value of the UK soft
drinks market, excluding the “on trade” channel
decreased by 0.6% to a total value of £7.6bn.
The market saw the dilutes sector decrease in value
by 7.4% while in contrast, Vimto dilutes grew 1%.
This growth was achieved whilst maintaining our
focus of delivering value over volume.
The Vimto brand is unusual in the context of the
soft drinks market as it is present in both the Still
and Carbonate sector. The brand saw a pleasing
performance in its ready to drink range which again
significantly outperformed the market to deliver
growth of 15%.
Operational Review
Vimto UK
Our strategic focus on Still products continued into
2015 and as a result, significant distribution gains
were made on the Vimto ready to drink range,
particularly in the prominent front of store chiller
space.
The Vimtoad featured in our “above the line”
campaign again in 2015 and has been successful in
broadening our target audience by encompassing
parents and their teenagers.
In addition to the National TV campaign, we
targeted the Midlands area with a regional up
weighted communications campaign and a
supporting van sales drive.
The activity took place over the peak spring/
summer period and included TV, radio, outdoor and
digital advertising culminating with the headline
sponsorship of the Fusion Festival in Birmingham.
The festival appealed to teens and their families
with 50,000 people attending the 3 day event
and featured performers such as Ed Sheeran
and McBusted. The amplification of the festival
sponsorship included radio advertising, sampling
and social media.
The van sales were designed to increase distribution
with independent retailers and secured over 16,000
new listings. As a result of this combined strategy
to drive both awareness and trial the Vimto brand,
sales have grown 9 times faster in the Midlands
compared to its national performance. Vimto is now
bought by an additional 15,000 households and
resulted in the brand being enjoyed in 1 out of 4
households in the Midlands.
Levi Roots on the van sales drive
50,000
15,000
PEOPLE ATTENDED
THE 3 DAY FUSION
FESTIVAL
ADDITIONAL
HOUSEHOLDS ARE
NOW BUYING VIMTO
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7.4M
344,771 4,058
REACH ON
SOCIAL MEDIA
TOTAL FACEBOOK
PAGE LIKES
TOTAL INSTAGRAM
FOLLOWERS
With the combination of planned content and partnership with major
influencers, the Bloomingdales campaIgn created a massive buzz on
social media.
Vimto International
Our international business performed strongly
during 2015 delivering growth of 3.9% (on a
constant currency basis) despite challenges
throughout the year of delivering concentrate to the
Yemen as a result of conflict in this region.
In country performance from our partner Aujan
Coca Cola was very strong with growth of in-market
volume of 9% as they executed another outstanding
fully integrated marketing campaign during the
Ramadan period. The theme focused on “emotional
separation” and how the issue resonates in different
ways with the Middle Eastern consumer. Through
diary style real life stories, Vimto was once again
highlighted as central to that special time when their
families come together. Digital and social media
communication remained key with material viewed
online over 17 million times.
A high profile marketing initiative took place in
the popular store of Bloomingdales in Dubai.
Consumers were able to purchase a Vimto Cordial
bottle and have their name personalised on the
label.
As well as our business in the Middle East, we have
a long established trading history in the African
region.
In the latter half of 2015, six new bottlers were
appointed in Africa which creates a platform for
concentrate growth in 2016.
A new product launch also took place in 2015 with
the launch of Vimto Malt. Dark malt and Vimto
provides a great taste combination which meets the
local needs of the African consumer and adds a new
Vimto product to the international portfolio. This
product will be launched into the Ethnic channel in
Europe as well as the USA in 2016.
For the first time in its history, we completed the
production of a pan-African TV commercial which
will be aired in the region during 2016.
The Feel Good brand was founded in 2001. Feel
Good is a premium range of 100% natural still and
sparkling drinks for adults and kids. The range is
available in over 20,000 outlets across 15 different
countries.
Feel Good is a core element of our future growth
strategy which allows us to enter the premium health
soft drinks sector. It also has an important part to
play in all our routes to market. Whilst it is firmly
established in the UK grocery packaged market, the
brand has a growing presence in the Out of Home
sector and an international business which we can
build on. Feel Good sparkling will be relaunched in
summer 2016 with exciting new flavours and new
product ranges will be added to the brand ready for
launch in early 2017.
Our proposition to the consumer for the brand is
to “drink good” and “feel good”, using only natural
ingredients with uplifting flavours. Our brand values
will ensure we always deliver integrity and honesty
to our customers which will ensure they have trust in
the product we make.
Vimto Out of Home
2015 saw the continued development of our Vimto
Out of Home business with the rationalisation of the
independent distributors now completed. In order to
communicate our position as a one stop shop to the
independent on-trade, this part of the organisation
has been rebranded as Vimto Out of Home with the
strap line “Refreshing Soft Drinks Solutions”.
Acquisitions
Two important acquisitions were made during 2015;
The Noisy Drinks Company Limited (Noisy), being a
49% associate investment, and the Feel Good brand
(trade and assets acquisition).
Noisy was established in 2002 and employs
45 people nationally with its headquarters in
Thurrock in Essex. Noisy has a strong track record
of delivering high quality service through its UK
network. Its product portfolio centres on frozen
drinks and includes the Starslush and Slurp brands.
With an enviable customer portfolio which ranges
from Merlin theme parks such as Legoland, Alton
Towers and Chessington to Compass Catering
supplying schools, Noisy is a great addition to the
Vimto Out of Home business.
Noisy provides a strong platform for product
innovation. A new launch in 2015 saw the
introduction of a new frozen carbonated product
under the Burrst brand, which has particular
relevance to the cinema sector. Vimto and Levi Roots
Caribbean Crush have both been introduced into
the Starslush and Burrst flavour portfolio and will
achieve extended distribution in 2016.
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WE NOW FEATURE
ON PACK
NUTRITIONAL
CONTENT
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Financial Review
The Group has delivered sales of £109.3m (2014:
£109.2m) in a challenging global market. The focus
has been maintained on our value over volume
strategy and the Group’s diversification has ensured
we have outperformed the markets we operate in.
In summary, we achieved the following in 2015:
• Group revenue £109.3m (2014: £109.2m)
• International growth (constant currency basis)
3.9% (2014: 4.3%)
• Profit before tax £28.0m (2014: £25.7m pre
exceptional items explained in note 4 of the
financial statements)
Cash flow remained positive in 2015 and as a result
we finished the year with £35.4m cash in the bank.
• Earnings Per Share 60.33 pence (2014: 55.03
pence pre exceptional items)
• 14.3% full year dividend growth
Corporate Responsibility
2015 has been another challenging year for the
soft drinks industry with many claims for urgent
and significant action required by the industry on
the issue of obesity. However, it is really important
to highlight the progress we as producers have
collectively made. Between January 2012 and
January 2016, soft drinks volume grew by 2.5% while
calories and sugars declined by 13.4% and 13.6%
respectively.
We take our responsibility towards the issue of
obesity and sugar consumption very seriously. Our
marketing strategy has revolved around promoting
no added sugar choices in order to achieve our
aims of overall sugar reduction across our range of
products. As a result, we have continued to reduce
our total sugar usage from 8,202 tonnes in 2014
to 7,488 tonnes in 2015, which is an 8% reduction
year on year. Since 2012 we have reduced the sugar
content of our product portfolio by 1,118 tonnes.
Our No Added Sugar products in our squash range
now account for 46% of all purchases and 41% of
our Vimto still range in the UK, with Vimto Minis and
Squeezy products only available as no added sugar.
We are committed to looking for healthier
alternatives and a good example of this is our
acquisition of the Feel Good brand, which contains
no added sugars and 100% natural ingredients.
Our recent launch of Vimto Remix contains no
added sugar and we have recently launched a 5 litre
catering pack of Vimto squash which is no added
sugar only. This year we introduced front of pack
labelling in order to better communicate to the
consumer the nutritional content of our products.
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Our Community
We are delighted to continue our work with Warrington Youth Club. To support the charity, last year over 40
colleagues attempted to climb the 3 peaks during June. They had to combat extremely poor weather which
included snow at the top of Ben Nevis, but defeated the odds to raise over £55,000 for the charity.
A message from Dave McNicholl at Warrington Youth Club:
Through the support and dedication of the staff of Nichols, over £200,000 has been raised
for Warrington Youth Club, this has supported over 10,000 children and young people
to access improved social opportunities, receive volunteer mentors and access high level
personal development programmes. Over 100 young people who were at risk of social
exclusion and involvement in criminality have been supported back into education and
training. Over 65 vulnerable young people who had been in care have received training and
support to allow them to live more independently.
From all of the children and young people, volunteers, staff and board members involved
with Warrington Youth Club, thank you for your amazing support and we look forward to
working with you all for many years to come.
Yours Sincerely, Dave McNicholl
Chief Executive, Warrington Youth Club.
Our Team
People remain absolutely core to the continued
success of Nichols plc. Working as one team ensures
we preserve our culture and its values. I would
like to say a huge thank you to the amazing effort
and passion my colleagues continue to show the
business.
We conducted a staff survey in 2015 and were
delighted to receive the following feedback:
99%
ARE PROUD
TO WORK AT
NICHOLS
96%
STILL EXPECT TO
BE WORKING AT
NICHOLS IN 12
MONTHS TIME
94%
98%
FIND NICHOLS A
POSITIVE PLACE TO
WORK
SHARE THE SAME
VALUES AS THE
COMPANY
Star awards
This years Star Awards were presented by Levi Roots.
LEE GIBSON
Mentor of the Year
ANDY BROWN
Innovator of the year
ELENA DOYLE
Newcomer of the year
ANNA SHAW
Unsung Hero of the Year
3 PEAK CHALLENGE TEAM
Team of the Year
Our Vision
Outlook
I am pleased with the performance by the Group
during 2015. With the two acquisitions completed
we look forward to 2016 with confidence and
optimism. Feel Good and Noisy will be integrated
into the Group’s commercial activities and particular
emphasis is being made into innovation to ensure all
the brands are fit for the future.
Marnie Millard
Chief Executive Officer
2 March 2016
Our five year rolling strategy centres on our Group
commercial activities in both the UK and overseas.
To support those initiatives, we work to ensure we
have well established operations and partners to
support our business growth and development.
In the UK we will focus on the geographical
expansion of the Vimto brand. Feel Good will
concentrate on its position as a healthy natural
soft drink and will have innovation as the core of
its growth. With the newly acquired Noisy Drinks
business, we will have a unique product portfolio for
the Out of Home sector along with a population of
new customers and consumers.
Internationally we will continue to develop and
expand our large presence in the Middle East region.
There also remain potential new territories in Africa
which we will continue to evaluate and introduce
new partners to realise further success. In addition,
we continue to develop opportunities in new export
markets to add to our successful international
business.
As a truly diversified business, acquisition remains
a key feature in our growth strategy. Any further
acquisition either in the UK or overseas would
be incorporated into our current business model
characterised by outsourcing production and
using third party distribution partners in the export
markets.
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#VIMTOAD
20
THE
DIVERSIFICATION
OF OUR BUSINESS
IS A MAJOR
CONTRIBUTOR
TO OUR
CONSISTENT
GROWTH.
373,931
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STRATEGIC REPORT
Financial Review
I am pleased to report on another good
year for Nichols plc, in addition to delivering
near double digit growth in both profit
before tax and earnings per share, we have
completed two acquisitions to support our
strategic growth plans over the coming years.
TIM CROSTON
Chief Financial Officer
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I am pleased to report on another good year for Nichols plc, in addition
to delivering near double digit growth in both profit before tax and
earnings per share (pre exceptional items recognised in 2014), we have
completed two acquisitions to support our strategic growth plans over
the coming years.
Whilst revenue showed only marginal growth
against the prior year, our strategy to focus on value
over volume and the spread of the Group’s trading
activities beyond the challenges of the UK grocery
market has delivered strong profit growth.
Income Statement
Total Group sales were £109.3m against a similar
value in 2014 of £109.2m. On a constant currency
basis, sales increased by 0.6%. The Group, and this
review, makes use of a series of underlying results
to monitor trading performance i.e. those before
exceptional items recognised in the prior year.
Exceptional items are discussed further in note 4 to
the financial statements.
In aggregate, Group sales were evenly split between
the Still and Carbonate segments. Whilst UK sales
of Vimto Still showed a healthy 3% growth, total
revenues from the Still category were behind the
prior year due to a decline in dispensed juice sales.
The increase in Carbonate sales was driven by a
combination of UK dispense and exports to Africa.
Business Segments
Still
2014
56.0m
54.5m
2015
-2.7%
Carbonate
2014
53.2m
54.8m
2015
+3.0%
Total
2014
109.2m
109.3m
2015
+0.1%
OUT OF HOME
SALES GREW BY
MIDDLE EAST SALES
INCREASED BY
TOTAL GROSS PROFIT
INCREASED BY
2%
4.9%
5.6%
UK Sales
International Sales
UK sales totalled £84.8m marginally down on the
2014 value of £85.1m, but representing a slightly
better performance than the UK soft drinks market
which declined by 0.6% during the year (Nielsen year
to 2 January 2016).
The positive news is that our ongoing strategy of
focusing on value over volume i.e. driving sales
of our higher margin products and limiting our
participation in the deep promotional activity has
delivered good profit growth despite the headline
sales performance. This is demonstrated by the
performance of the Vimto brand where we saw a
3% increase in sales of Still products driven by both
our ready to drink and squash range. Conversely,
Vimto Carbonate sales which compete in a heavily
promoted category were 9% down on the prior year.
As referenced earlier, another strength of the Nichols
business is that we operate in diverse markets
both in the UK and overseas which helps to spread
our risk. So whilst the UK grocery market remains
challenging, it is important to note that nearly a third
of our UK revenue is within the more vibrant Out of
Home sector and our sales within this market grew
by 2% compared to the prior year.
In support of our growth ambitions in the Out of
Home sector, we initially acquired a 49% stake in
The Noisy Drinks Company Limited (Noisy) in March
2015, providing the Group with significant influence
over this company in the year. Noisy adds frozen
drinks to our Out of Home portfolio in addition
to both dispense and packaged soft drinks. Post
the year end, we have acquired the remaining
equity in Noisy and therefore the full revenue and
profit impact will be reflected in our 2016 Income
Statement.
Keeping with the theme of diversity, reported sales
for our international business were £24.5m, an
increase of 1.6% compared to the prior year. The
underlying performance is better still when judged
on a constant currency basis; before currency
fluctuations our international sales grew by 3.9%
during the year.
Our largest export market is the Middle East where
Vimto is particularly popular during the holy month
of Ramadan. We are particularly pleased to report
sales growth of 4.9% in the region during 2015 with
sales totalling £12.4m (2014: £11.8m). This is despite
the ongoing civil unrest in Yemen which had an
adverse effect on sales in that particular territory.
Sales to Africa were £7.9m, 4.4% down compared to
2014 on a reported basis. However, these figures do
not reflect the positive underlying growth of 3.2%
when judged on a constant currency basis. It should
be noted that approximately 90% of our sales to
Africa are transacted in Euros which significantly
weakened against sterling during 2015.
Elsewhere, sales in our remaining international
markets totalled £4.2m (2014:£4.0m), an increase of
4.6% compared to the prior year.
With regard to the exchange rate impact reported
above, it should be noted that the Group manages
a ‘natural currency hedge’, whereby our foreign
currency payments largely match income and
therefore the net exchange rate exposure to profit is
minimal.
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Gross Profit
Administrative Expenses
Total Gross Profit of £53.0m is £2.8m (5.6%) ahead
of the prior year. It is important to note that the
Group’s strong profit growth has been delivered from
trading activities; this is despite the relatively modest
headline sales performance. The Gross Margin in 2015
was 48.5% compared to 45.9% in the prior year. The
incremental profit is driven by a number of factors
including the positive sales mix of Vimto in the UK
and the growth of the higher margin international
business.
Distribution Expenses
The majority of our distribution expenses relate
to our UK business, the cost of £5.5m in 2015 was
slightly higher (4%) than the prior year. The actual
cost of distribution is in line with the prior year, the
small increase as reported is due to a reallocation of
distribution costs which were previously netted off
sales with one of our grocery customers.
Total cost of overheads in 2015 was £19.7m, which
was £0.4m (2%) higher than the prior year (excluding
exceptional items). I am pleased to report that the
underlying trend shows a slight reduction during the
year, as the 2015 administrative expenses include
one-off transaction costs for the two acquisitions of
£0.3m and restructuring costs of £0.2m.
Operating Profit
As a result of the strong Gross Profit growth and
good control of overheads, the Operating Profit
increased by 8.7% to £27.8m (2014: £25.6m).
Share of Income from Associate
As referred to above, we acquired a 49% equity stake
in The Noisy Drinks Company Limited in March 2015.
Therefore, for 2015 we have accounted for 49% of
the post-acquisition, post-tax profit which amounted
to £0.2m.
Profit Before Tax
Profit Before Tax (PBT) increased by 8.9% to £28.0m (2014: £25.7m). The Group has an impressive record of
increasing PBT by 86% in the last five years and delivering a CAGR of 13%.
Profit Before Tax (pre exceptional items £m)
30
25
20
15
10
5
0
2010
2011
2012
2013
2014
2015
Earnings Per Share
Earnings Per Share increased by 9.6% to 60.33 pence (2014: 55.03 pence pre exceptional items). The Group’s
EPS has increased by 100% over the last five years with a CAGR of 15%.
EPS before exceptional items (pence per share)
70.00
60.00
50.00
40.00
30.00
20.00
10.00
0.00
2010
2011
2012
2013
2014
2015
Key Performance Indicators
As reported in more detail above, the following Key Performance Indicators are used by management to
monitor the Group’s Income Statement:
REVENUE
GROWTH
+0.1%
The increase in the
current year’s revenue as
a percentage of the prior
year’s total.
GROSS
MARGIN
48.5%
Revenue less product cost
as a percentage of revenue,
reviewed specifically at
individual product (Still and
Carbonate) level.
OPERATING
PROFIT MARGIN
25.4%
Group profit before
financing income or charges
as a percentage of revenue,
which is considered for the
Group as a whole rather
than at product level.
Statement of Financial Position
Cash
2015 was atypical for Nichols in terms of cash flow;
our year end cash balance was £35.4m (2014:
£34.5m), a net cash flow of just £0.9m during the
year. However, this was for good reason as we have
been investing in the future growth potential of the
Group. Cash generated from operating activities
was £22.7m compared to post-tax profits of £22.2m,
therefore demonstrating that our underlying cash
generation remains strong.
As reported above, during the year we completed
two strategic acquisitions to support our future
growth plans, the cash cost of the two was £6.6m.
In addition, we are investing in the capability and
efficiency of our one production facility in Ross-on-
Wye where we expended an initial £0.7m during
2015.
By exception, other points of note with regard to the
Statement of Financial Position are:
• Property, Plant and Equipment increased by £1.8m
(36%). This includes the £0.7m expenditure at our
Ross-on-Wye plant and the operational investment
in dispense equipment for our Out of Home
business.
• Goodwill increased by £2.7m which was mainly the
goodwill on acquisition of the Feel Good brand.
• Investments of £3.0m is the carrying value of our
investment in Noisy at the year end.
• Intangibles (£1.3m) is the value of the Feel Good
brand.
• Inventories decreased by £0.8m (16%). There is
no specific reason other than timing differences of
stock movements.
• Trade and other receivables increase of £4.3m
(18%), again there are no specific issues other than
timing of transactions.
• Pension liability reduced to £3.9m (2014: £6.2m)
based on the actuary’s report. The company has a
recovery plan in place to fund the deficit.
Internal Control
The Nichols Group complies with the principles of
good corporate governance and has an established
process of control and risk management.
The Board is ultimately responsible for maintaining
sound internal control systems to safeguard the
investment of shareholders and the Group’s assets.
The systems are reviewed by the Board and are
designed to provide reasonable, but not absolute,
assurance against material misstatement or loss.
Audit Committee
The Audit Committee members for 2015 were
J Gittins (from 23 July 2015 replacing 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
non-audit services with a value over £25,000 would
require Nichols plc Board approval.
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Risks and Uncertainties
Management consider the following issues to be the
principal risks potentially affecting our business:
Risk
Mitigation
Unavailability of the Vimto compound – As
the Vimto brand accounts for the majority
of the Groups revenue, it is vital that we
have surety of supply of the compound.
Working in partnership with our suppliers,
we have established production capability at
more than one location to ensure continuity
of supply.
Loss of a major customer account.
Loss of a production facility.
We are dedicated to maintaining long-term
relationships with all of our customers, but
the Group’s diverse income stream across
markets and regions means we are not overly
reliant on any one customer.
Our supply chain team work with our third
party suppliers to ensure robust recovery
plans are in place to ensure continuity of
supply in the event of the loss of one of our
production facilities.
Loss of our IT infrastructure - In common
with many businesses, we are now also
highly dependent on the availability of IT
systems.
We have a robust disaster recovery plan
including the use of third party professional
providers to host our systems and data.
There are other risks from operating in the industry which affect all market participants, particularly those
referred to in the Corporate Responsibility section of the Chief Executive’s Review.
Shareholders
Dividend
The Board is recommending a final dividend of 17.6 pence per ordinary share (2014: 15.3 pence) payable
to shareholders on the register at 1 April 2016. The final dividend together with the interim dividend of 8.0
pence, gives a total dividend of 25.6 pence per share for the year, which represents a 14.3% increase on the
prior year (2014: 22.4 pence).
Total Dividend (pence per share)
27
25
23
21
19
17
15
13
11
9
7
2010
2011
2012
2013
2014
2015
Share Price
The Nichols plc share price closed the year at 1,430 pence (2014: 900 pence), an increase of 58% during the
year. The following graph charts the Group’s share price performance compared to the All AIM index. For ease
of comparison, both sets of data are shown as an index using 2010 as the base.
Nichols v All AIM (indexed from 2010)
3.5
3
2.5
2
1.5
1
0.5
0
2010
2011
2012
2013
2014
2015
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.
Strategic Report
The Strategic Report on pages 4 to 29 was approved
by the board of directors on 2 March 2016 and signed
on its behalf by:
Tim Croston
Chief Financial Officer
2 March 2016
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JOHN NICHOLS
Non-Executive Chairman
John is the grandson of the founder of the Company
and inventor of Vimto, John Noel Nichols.
John joined Nichols plc in 1971 and was appointed
as Director in 1975. In 1986 John became the Group
Managing Director, subsequently he became Executive
Chairman of the Group and in 2007 he moved to
Non-Executive Chairman.
John has three grown up children, two of whom also
work for the Company. John spends his spare time
sailing, playing golf and walking his dog on the beach
in Wales.
MARNIE MILLARD
Chief Executive Officer
Marnie joined Nichols in October 2012 as Managing
Director of Vimto Soft Drinks. In May 2013 she
was appointed Chief Executive Officer. Marnie has
vast experience in the soft drinks industry having
occupied senior roles with Macaw Soft Drinks and
Refresco Limited.
In April 2015, Marnie was appointed Regional
Vice-Chairman of CBI Northwest and she is on the
Board of Management and Executive Council of the
British Soft Drinks Association.
Marnie is married, has two children and is also a proud
grandmother to her grandson Freddie. Marnie enjoys
attending concerts and relaxes by walking on the moors
near her home.
TIM CROSTON
Chief Financial Officer
Tim joined the Group as Group Financial Controller in
2005. He became Finance and Operations Director of
Vimto Soft Drinks in 2007 and was appointed to the plc
Board as Chief Financial Officer in January 2010.
In December 2015 Tim was appointed, in a
Non-Executive capacity, to the Audit Committee of
Riverside Housing Association, a leading provider of UK
social housing. Previously, Tim held financial controller
positions at Polyone Inc. and at Smith and Nephew plc.
Tim has two teenage children with his wife Sue.
Tim is an avid and lifelong Manchester City fan and likes
to attend both home and away matches with his family.
ANDREW MILNE
Group Commercial Director
Andrew joined Nichols as the Commercial Director for
Vimto Soft Drinks in July 2013. He was appointed to the
plc Board on 1 January 2016.
Andrew also has extensive experience in the soft drinks
industry having previously worked as Sales Director for
the Northern region at Coca Cola Enterprises and prior
to that, as Trading Director at GlaxoSmithKline.
Andrew has two young children with his wife Debbie.
Andrew is a keen Manchester United fan and spends
what spare time he has either watching or
playing sport.
JOHN LONGWORTH
Independent Non-Executive Director
John has extensive experience at director level in
various organisations, including Asda, Tesco Stores
Limited and as Director General of the British Chambers
of Commerce and panel member of the Competition
Commission.
In addition, John is Chairman of SVA Limited, a business
he founded in 2010. John was appointed to the Board of
Nichols in November 2010 and is also a member of both
the Audit and Remuneration Committees.
JOHN GITTINS
Independent Non-Executive Director
John is a graduate of the London School of Economics
and a chartered accountant. He was appointed to the
Board of Nichols as an Independent Non-Executive
Director in July 2015 and is a member of both the Audit
Committee (which he chairs) and the Remuneration
Committee.
John is currently CFO of AIM listed Fairpoint Group
plc and has over 20 years experience of CFO roles in
companies such as Begbies Traynor Group plc, Spring
Group plc and Vertex Data Science Limited. John was
also previously an independent
Non-Executive Director and the Audit Committee chair
of Electricity North West Limited for six years.
31
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THE BOARD IS PLEASED
WITH THE 2015
PERFORMANCE AND IS
CONFIDENT THAT THE
GROUP IS WELL PLACED
TO CONTINUE THE TREND
INTO 2016
The directors present their report and the audited
financial statements for the year ended 31 December
2015.
Political Donations
There were no political donations in either 2015 or
2014.
Non-Executive Directors
J Longworth
J Gittins (Appointed 1 August 2015)
E Healey (Resigned 4 March 2015)
P J Nichols
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.
All of the above are members of the audit and
remuneration committees of the Board.
Share Capital
Executive Directors
M J Millard
T J Croston
A Milne (Appointed 1 January 2016)
Financial Risk Management Objectives and Policies
Business risks and uncertainties are included within
the Financial Review on pages 22 to 29 and financial
risks are set out in note 21 to the financial statements.
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.
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.
Auditors
In accordance with Section 489 of the Companies
Act 2006 a resolution will be proposed at the Annual
General Meeting that BDO LLP be re-appointed
auditors.
33
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Directors’ remuneration payable in year ended 31 December 2015
Salary
and fees
Benefits
in kind
Bonuses
Pension
contributions
Total
2015
Total
2014
£’000
£’000
£’000
£’000
£’000
£’000
P J Nichols
M J Millard
T J Croston
J Longworth
E Healey
J Gittins
Total
100
224
174
22
6
13
539
2
16
18
0
0
0
36
0
132
99
0
0
0
231
0
15
15
1
0
0
31
102
387
306
23
6
13
103
344
264
23
22
0
837
756
Each of the directors who are directors at the
time when this directors’ report is approved have
confirmed 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.
Directors’ Responsibilities Statement
The directors are responsible for preparing the
Strategic Report and 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 (IFRS) 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.
The directors are also required to prepare financial
statements in accordance with the rules of the
London Stock Exchange for companies trading
securities on the Alternative Investment Market. In
preparing these financial statements, the directors
are required to:
• select suitable accounting policies and then apply
them consistently;
• make judgements and accounting estimates that
are reasonable and prudent;
• state whether they have been prepared in
accordance with IFRSs as adopted by the
European Union;
• 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
requirements of 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 are responsible for ensuring the
annual report and the financial statements are made
available on a website. Financial statements are
published on the Company’s website in accordance
with legislation in the United Kingdom governing
the preparation and dissemination of financial
statements, which may vary from legislation in other
jurisdictions.
The maintenance and integrity of the company’s
website is the responsibility of the directors. The
directors’ responsibility also extends to the ongoing
Summary of directors’ interests in the Company
(Number of Shares)
Opening
shareholding
2015
movement
Closing
shareholding
P J Nichols
M J Millard
T J Croston
J Longworth
E Healey
J Gittins
2,077,060
(77,060)
2,000,000
0
17,250
140
0
0
0
357
0
0
0
0
17,607
140
0
0
integrity of the financial statements contained
therein.
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.
Directors’ Remuneration
Bonuses which are not guaranteed are accruing to
the executive directors and certain senior executives
based on pre-determined performance targets.
The Remuneration Committee have considered it
appropriate to issue awards under an incentive plan
(the Growth Securities Ownership Plan (GSOP))
relating to growth in operating profit before
exceptional items.
The current GSOP runs from 1 January 2014 to
31 December 2016 and the remuneration level at
grant was linked to a theoretical number of shares
equivalent in value to no more than twelve months
salary for each year of the incentive scheme.
In respect of the scheme, the second years
performance criteria has been met and as a result,
the Group has provided for a potential bonus in 2015
of £477,000 for the two executive directors at 31
December 2015, which will be payable subsequent
to the year ended 31 December 2016 if group targets
continue to be met. The Group has also provided for
a potential bonus of £247,000 for M J Millard at 31
December 2015, which will be payable subsequent to
the year ended 31 December 2016, upon completion
of three years service to the group.
Growth in 2015 operating profit before exceptional
items of 8.7% was achieved. As a result of targets
being met, the maximum potential bonus is currently
being accrued and apportioned to executive
directors and certain senior executives.
P J Nichols is a member of the final salary pension
scheme and M J Millard and T J Croston have a
personal pension plan. The Company contributions to
the respective schemes are shown in the above table.
A summary of directors’ interests in the company are
shown in the table above.
All figures above relate to shares owned outright,
please refer to note 19 to the financial statements for
details of share options relating to directors.
By order of the board
Tim Croston
Secretary
2 March 2016
Laurel House, Woodlands Park,
Ashton Road, Newton-Le-Willows, WA12 0HH
Registered in England and Wales No. 238303
35
Independent Auditor’s report to the members of
Nichols plc
Respective Responsibilities of Directors and
Auditors
We have audited the financial statements of Nichols
plc for the year ended 31 December 2015 which
comprise the Consolidated Income Statement,
the Consolidated Statement of Comprehensive
Income, the Group and Parent Company Statement
of Financial Position, the Consolidated and Parent
Company Statement of Cash Flows, the Group and
Parent Company Statement of Changes in Equity and
the related notes.
The financial 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 company financial statements, as applied
in accordance with the provisions of the Companies
Act 2006.
As explained more fully in the statement of directors’
responsibilities, the directors are responsible for
the preparation of the financial statements and
for being satisfied that they give a true and fair
view. Our responsibility is to audit and express an
opinion on the financial statements in accordance
with applicable law and International Standards on
Auditing (UK and Ireland).
Those standards require us to comply with the
Financial Reporting Council’s (FRC’s) Ethical
Standards for Auditors.
Scope of the Audit of the Financial Statements
A description of the scope of an audit of financial
statements is provided on the FRC’s website at
www.frc.org.uk/auditscopeukprivate.
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.
Opinion on Financial Statements
In our opinion:
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.
• the financial statements give a true and fair
view of the state of the Group’s and the Parent
Company’s affairs as at 31 December 2015 and of
the Group’s profit for the year then ended;
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.
• the Group financial statements have been properly
prepared in accordance with IFRSs as adopted by
the European Union;
• the Parent Company financial statements have
been properly prepared in accordance with IFRSs
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as adopted by the European Union and as
applied in accordance with the provisions of the
Companies Act 2006; and
• the financial statements have been prepared in
accordance with the requirements of the
Companies Act 2006.
Opinion on other matters prescribed by the
Companies Act 2006
In our opinion the information given in the strategic
report and directors’ report for the financial year
for which the financial statements are prepared is
consistent with the financial statements.
Matters on which we are required to report by
exception
Philip Storer
(Senior Statutory Auditor)
For and on behalf of BDO LLP,
statutory auditor, Manchester,
United Kingdom.
2 March 2016
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:
BDO LLP is a limited liability partnership registered
in England and Wales (with registered number
OC305127).
• 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 financial statements are not
in agreement with the accounting records and
returns; or
• certain disclosures of directors’ remuneration
specified by law are not made; or
• we have not received all the information and
explanations we require for our audit.
OUR ADVISORS
Auditors
BDO LLP, 3 Hardman Street,
Spinningfields, Manchester,
M3 3EB.
Stockbrokers & Nominated
Advisor
N+1 Singer Advisory LLP, West
One Wellington Street, Leeds,
LS1 1BA.
Registered Office
Laurel House, Woodlands Park,
Ashton Road, Newton-Le-Willows,
WA12 0HH.
Bankers
The Royal Bank of Scotland PLC, 1
Spinningfields Square, Manchester,
M3 3AP.
Financial Advisors
N M Rothschild & Sons Limited, 82
Kings Street, Manchester,
M2 4WQ.
Registered Number
238303.
Solicitors
DLA Piper, 101 Barbirolli Square,
Manchester, M2 3DL.
Registrars
Capita Registrars Limited,
Northern House, Woodsome Park,
Fenay Bridge, Huddersfield,
HD8 0GA.
37
CONSOLIDATED INCOME STATEMENT
YEAR ENDED 31 DECEMBER 2015
Revenue
Cost of sales
Gross profit
Distribution expenses
Administrative expenses
Operating profit
Finance income
Finance expense
Share of post-tax profits of equity accounted associate
Profit before taxation
Taxation
Profit for the financial year attributable to equity holders
of the parent
Earnings per share (basic)
Earnings per share (diluted)
Notes
2015
£’000
Before
exceptional
items
£’000
2014
Exceptional
litigation costs
£’000
(Note 4)
Total
£’000
3
109,279
109,205
(56,296)
(59,035)
52,983
(5,483)
50,170
(5,271)
0
109,205
0 (59,035)
0
0
50,170
(5,271)
(19,666)
(19,302)
(7,768)
(27,070)
27,834
25,597
(7,768)
17,829
213
(201)
190
28,036
(5,803)
257
(164)
0
25,690
(5,413)
0
0
0
257
(164)
0
(7,768)
17,922
1,637
(3,776)
22,233
20,277
(6,131)
14,146
60.33p
60.25p
38.39p
38.34p
4
5
5
12
7
9
9
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 2015
Profit for the financial year
2015
£’000
22,233
2014
£’000
14,146
Items that will not be reclassified subsequently to profit or loss
Remeasurement of net defined benefit liability (see note 26)
1,632
(2,796)
Deferred taxation on pension obligations and employee benefits (see note 14)
(274)
436
Other comprehensive income/(expense) for the year
Total comprehensive income for the year
1,358
(2,360)
23,591
11,786
38
STATEMENT OF FINANCIAL POSITION
YEAR ENDED 31 DECEMBER 2015
Assets
Non-current assets
Property, plant and equipment
Goodwill
Investments
Investment in equity accounted associate
Intangibles
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
Total current liabilities
Non-current liabilities
Pension obligations and employee benefits
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
2015
£’000
2014
£’000
2015
£’000
2014
£’000
10
11
12
12
13
14
15
16
20
17
17
26
14
18
6,061
19,108
0
2,970
1,316
1,098
4,817
16,447
0
0
0
1,699
3,928
2,504
3,759
0
16,566
16,566
0
1,316
1,098
0
0
1,699
30,553
22,963
25,412
22,024
3,945
27,860
35,438
67,243
4,712
23,525
34,483
62,720
2,430
20,765
22,907
2,634
21,120
19,124
46,102
42,878
97,796
85,683
71,514
64,902
18,127
2,679
20,806
3,893
86
3,979
19,486
1,859
21,345
6,190
70
6,260
16,981
1,160
18,141
17,210
1,090
18,300
3,893
6,190
0
0
3,893
6,190
24,785
27,605
22,034
24,490
73,011
58,078
49,480
40,412
3,697
3,255
1,209
(547)
65,397
73,011
3,697
3,255
1,209
(560)
50,477
58,078
3,697
3,255
1,209
228
3,697
3,255
1,209
215
41,091
32,036
49,480
40,412
The financial statements on pages 38 to 67 were approved by the Board of Directors on 2 March 2016 and were signed on its
behalf by:
PJ Nichols
Chairman
The accompanying accounting policies and notes form an integral part of these financial
statements.
Registered number 238303
39
CONSOLIDATED INCOME STATEMENT OF CASH FLOWS
YEAR ENDED 31 DECEMBER 2015
Cash flows from operating activities
Profit for the financial year
Adjustments for:
Depreciation
Loss/(profit) on sale of property, plant and equipment
Finance income
5
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 and employee benefits
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 trade and assets
Acquisition of associate investment
Net cash used in investing activities
Cash flows from financing activities
Share options exercised
Dividends paid
Net cash used in financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at 1 January
Notes
2015
£’000
2015
£’000
2014
£’000
2014
£’000
22,233
14,146
502
16
(213)
5,803
767
(4,335)
(1,359)
0
(665)
213
5
(1,768)
(157)
(3,820)
(2,970)
516
22,749
(4,639)
18,110
480
(80)
(257)
3,776
(568)
(787)
1,324
(2,018)
(653)
239
124
(4,034)
(85)
(305)
0
1,217
15,363
(3,465)
11,898
(8,497)
(4,061)
(69)
8
(8,589)
(129)
(7,518)
(8,658)
955
34,483
35,438
(7,647)
190
34,293
34,483
Cash and cash equivalents at 31 December
20
The accompanying accounting policies and notes form an integral part of these financial statements.
40
PARENT COMPANY STATEMENT OF CASH FLOWS
YEAR ENDED 31 DECEMBER 2015
Cash flows from operating activities
Profit for the financial year
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 and employee benefits
Cash generated from operating activities
Tax paid
Net cash generated from/(used up in) operating activities
Cash flows from investing activities
Finance income
Acquisition of property, plant and equipment
Acquisition of business trade and assets
Hive-up of dormant subsidiaries
Net cash used in investing activities
Cash flows from financing activities
Share options exercised
Dividends paid
Net cash used in financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at 1 January
Cash and cash equivalents at 31 December
20
Notes
2015
£’000
2015
£’000
2014
£’000
2014
£’000
15,974
8,441
271
2
(213)
4,266
205
355
(229)
0
(665)
213
(441)
(3,820)
390
3,992
19,966
(3,868)
16,098
272
14
(257)
2,258
(452)
(548)
(5,897)
(2,018)
(653)
239
(3,679)
0
0
(7,281)
1,160
(1,913)
(753)
(3,658)
(3,440)
(68)
8
(8,589)
(129)
(7,518)
(8,657)
3,783
19,124
22,907
(7,647)
(11,840)
30,964
19,124
The accompanying accounting policies and notes form an integral part of these financial statements.
41
STATEMENT OF CHANGES IN EQUITY
YEAR ENDED 31 DECEMBER 2015
Group
At 1 January 2014
Dividends
Movement in ESOT
Transactions with owners
Profit for the year
Other comprehensive expense
Total comprehensive income
At 1 January 2015
Dividends
Movement in ESOT
Transactions with owners
Profit for the year
Other comprehensive income
Total comprehensive income
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
(598)
46,376
53,939
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
38
38
0
0
0
(7,518)
(7,518)
(167)
(129)
(7,685)
(7,647)
14,146
14,146
(2,360)
(2,360)
11,786
11,786
3,697
3,255
1,209
(560)
50,477
58,078
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
13
13
0
0
0
(8,589)
(8,589)
(82)
(69)
(8,671)
(8,658)
22,233
22,233
1,358
1,358
23,591
23,591
At 31 December 2015
3,697
3,255
1,209
(547)
65,397
73,011
Parent
At 1 January 2014
Dividends
Movement in ESOT
Transactions with owners
Profit for the year
Other comprehensive expense
Total comprehensive income
At 1 January 2015
Dividends
Movement in ESOT
Transactions with owners
Profit for the year
Other comprehensive income
Total comprehensive income
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
177
33,640
41,978
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
38
38
0
0
0
(7,518)
(7,518)
(167)
(129)
(7,685)
(7,647)
8,441
8,441
(2,360)
(2,360)
6,081
6,081
3,697
3,255
1,209
215
32,036
40,412
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
13
13
0
0
0
(8,589)
(8,589)
(81)
(68)
(8,670)
(8,657)
16,366
16,366
1,358
1,358
17,724
17,724
At 31 December 2015
3,697
3,255
1,209
228
41,090
49,479
42
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2015
1. Reporting entity
Defined benefit obligations
Nichols plc (the “Company”) is a company incorporated and
domiciled in the United Kingdom, listed on the Alternative
Investment Market. 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 2015 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.
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 2 March 2016. 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 parent company financial
statements of Nichols plc was £15,974,000 (2014: £8,441,000).
Functional and presentational 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
reporting date, that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities
within the next financial year.
Carrying value of brand support accruals
The Group incurs significant costs in the support and
development of the Group’s brands. Judgement is required
in determining the level of closing accrual required at a year
end for promotions and brand support campaigns that either
span two financial years or where the costs have not been
fully settled by the year end date. This includes sales related
discounts which are included within revenue as disclosed in
the revenue recognition policy below. Based on the timing of
the agreements entered into with customers in the year, the
level of estimation in the year end accrual is insignificant. The
majority of costs incurred on the arrangements (and therefore
deduction to revenue) have been settled at 31 December 2015.
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 reporting date was
£19.1 million (2014: £16.4 million).
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).
Basis of consolidation and goodwill
The Group financial statements consolidate those of the
Company and all of its subsidiary undertakings drawn up to
31 December 2015. Subsidiaries are entities controlled by the
Group. Control exists if all three of the following elements are
present: power over the investee, exposure to variable returns
from the investee, and the ability of the investor to use its
power to affect those variable returns. Control is reassessed
whenever facts and circumstances indicate that there may
be a change in any of these elements of control. 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 statement of
financial position 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 calculated on the basis of
the invoiced price, less any agreed discounts or rebates and
excluding VAT and after the deduction of certain promotional
and brand support costs invoiced by customers.
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.
With regards to discounts, rebates, promotional costs and
brand support costs, these costs are calculated to reflect the
expected amount of customer claims in respect of these items.
The statement of financial position includes accruals for claims
yet to be received for discounts, rebates and promotional
costs.
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
43
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2015
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 2015 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.
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 income/(expense), in which case it is
recognised in comprehensive income.
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.
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.
Brands
Brands acquired in a business combination are recognised at
fair value at the acquisition date. Brands acquired separately
through a business combination are assessed at the date of
acquisition as to whether they have an indefinite life. The
assessment includes whether the brand name will continue
to trade, and the expected lifetime of the brand. All brands
acquired to date have been assessed as having an indefinite
life as they are expected to continue to contribute to the long
term future of the Group. The brands are reviewed annually for
impairment, being carried at cost less accumulated impairment
charges. The fair value of a brand at the date of acquisition is
based on the Relief from Royalties method, which is a valuation
model based on discounted cash flows.
Reserves
Share capital represents the nominal value of equity shares.
Share premium 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 cash-generating unit.
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.
44
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2015
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.
The estimated useful lives for the current and comparative
periods are as follows:
Property, plant and equipment
3-10 years
Land and buildings
50 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. Financial assets are a contractual right to receive
cash or another financial asset from another entity or to
exchange financial assets or financial liabilities with another
entity under conditions that are potentially favourable to the
entity.
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, such as
significant financial difficulties on the part of the counterparty
or default or significant delay in payment.
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.
Post-employment benefit plans
The Group provides post-employment benefits through various
defined contribution and defined benefit plans.
Employee benefit - Growth Securities Ownership Plan (GSOP)
An accrual is recognised in respect of an incentive plan (the
Growth Securities Ownership Plan (GSOP)) that will see
amounts payable to employees and directors subsequent to
the year ended 31 December 2016 if group targets continue
to be met. The quantum of the accrual is based on target
growth in operating profit before exceptional items linked to
a theoretical number of shares and a theoretical share price-
earnings ratio. The quantum of the accrual is reassessed at
each year-end based on the performance of the Group against
the target set.
Defined contribution plan
The Group pays fixed contributions into independent entities
in relation to plans and insurances for individual employees.
The Group has no legal or constructive obligations to pay
contributions in addition to its fixed contributions, which are
recognised as an expense in the period that relevant employee
services are received.
Defined benefit plan
Under the Group’s defined benefit plan, the amount of pension
benefit that an employee will receive on retirement is defined
by reference to the employee’s length of service and final
salary. The legal obligation for any benefits remains with the
Group, even if plan assets for funding the defined benefit plan
have been set aside. Plan assets may include assets specifically
designated to a long-term benefit fund as well as qualifying
insurance policies.
The liability recognised in the statement of financial position
for defined benefit plans is the present value of the defined
benefit obligation (DBO) at the reporting date less the fair
value of plan assets.
Management estimates the DBO annually with the assistance
of independent actuaries. This is based on the standard rates
of inflation, salary growth and mortality. Discount factors
are determined close to each year end by reference to high
quality corporate bonds that are denominated in the currency
in which the benefits will be paid and that have terms to
maturity approximating to the terms of the related pension
liability. Service cost on the net defined benefit liability is
included in employee benefits expense. Net interest expense
on the net defined benefit liability is included in finance costs.
Remeasurement of the DBO, comprising actuarial gains and
losses and the return on scheme assets (excluding interest), are
recognised in the statement of other comprehensive income in
the year in which they arise.
Share-based payment transactions
The Group’s equity-settled share-based payments comprise
the grant of options under the Group’s share option schemes.
The Group recognises 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 2015 for the year ending 31 December 2015.
Those fair values are charged to the income statement over the
relevant vesting period adjusted to reflect actual and expected
vesting levels. The Group calculates the fair market value of the
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 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
reporting 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 transaction costs, are managed by the
ESOT, therefore there is no impact on share capital and share
premium when the options are exercised.
45
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2015
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 potential costs of a legal claim is recognised
when management have considered the merits of the claim
and taken appropriate legal advice as to the outcome of the
litigation.
Finance income
Finance income comprises interest income on funds invested.
Interest income is recognised as it accrues, using the effective
interest method.
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
statement of financial position at cost less any provision for
impairment.
Investments in associates
Associates are entities over which the Group has significant
influence but does not control, generally accompanied
by a share of between 20% and 50% of the voting rights.
Investments in associates are accounted for using the equity
method.
Standards and interpretations in issue not yet adopted
At the date of authorisation of these financial statements, the
following Standards and Interpretations which have not been
applied in these financial statements were in issue but not yet
effective (and in some cases had not yet been adopted by the
EU):
IFRS 9, Financial instruments
IFRS 15, Revenue from contracts with customers
Amendments to IFRS 10, IFRS 12 and IAS 28, Consolidated
Financial Statements and Investments in Associates and Joint
Ventures
Amendments to IFRS 11, Joint Arrangements
Amendments to IAS 1, Disclosure initiative
Amendments to IAS 16 and IAS 38, Clarification of Acceptable
Methods of Depreciation and Amortisation
Annual Improvements to IFRSs, 2012–2014 Cycle
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.
Adoption of new and revised standards
In the current year, the Annual Improvements to IFRSs 2011-
2013 Cycle, effective 1 January 2015, has been adopted. The
directors do not consider that the adoption has had a material
impact on the Group or parent Company results.
46
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2015
3. Segmental information
a. Key Operating segments
The Management 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 Management Committee considers the business from a
product perspective and reviews the Group on the operating
segments identified below. There has been no change to
the segments during the year. Based on the nature of the
products sold by the Group, the types of customers and
methods of distribution management consider reporting
operating segments at the Still and Carbonate level to be
reasonable. Gross profit is the measure used to assess the
performance of each operating segment as identified as a
KPI in the Financial Review.
Still
Carbonate
Total
Revenue
Gross Profit
2015
£’000
54,439
54,840
2014
£’000
56,025
53,180
109,279
109,205
2015
£’000
31,962
21,021
52,983
2014
£’000
30,756
19,414
50,170
There are no sales between the two operating segments
and all revenue is earned from external customers.
Management Committee and consequently there is no
reconciliation to profit before tax at a segmental level.
The operating segments gross profit is reconciled to profit
before taxation as per the consolidated income statement.
The Group’s overheads are managed centrally by the
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.
2015
£’000
1,767
502
2014
£’000
4,035
480
Capital Expenditure
Depreciation
b. Reporting by geographic area
Revenue by geographic destination
Middle East
Africa
Rest of the World
Total exports
United Kingdom
2015
£’000
12,365
7,922
4,182
24,469
84,810
109,279
2015
%
11.3
7.2
3.9
22.4
77.6
100.0
2014
£’000
11,789
8,289
3,997
24,075
85,130
2014
%
10.8
7.6
3.6
22.0
78.0
109,205
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 2015 or 2014.
Total assets
The assets of the Group at 31 December 2015 and 31 December
2014 are entirely located within the United Kingdom.
Capital expenditure
The capital expenditure of the Group for the years ended 31
December 2015 and 31 December 2014 was entirely made
within the United Kingdom.
Depreciation
The Group’s depreciation charges for the years ended 31
December 2015 and 31 December 2014 are against property,
plant and equipment all retained within the United Kingdom.
47
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2015
4. Operating profit
Operating profit is stated after charging/(crediting):
Inventory amounts charged to cost of sales
Grant Thornton remuneration whilst auditor:
Non-audit services
BDO LLP remuneration before auditor:
Non-audit services; other services
BDO LLP remuneration whilst auditor:
Audit services of the company’s annual accounts
Non-audit services; corporate finance services
Depreciation of property, plant and equipment
Operating lease rentals payments
Awards under Growth Securities Ownership Plan
Loss/(gain) on foreign exchange differences
Loss/(profit) on sale of property, plant and equipment
Exceptional expenses included within administrative expenses are summarised below;
Litigation costs
Total
2015
£’000
2014
£’000
56,296
59,035
0
0
55
11
502
536
1,017
316
16
72
175
55
35
480
576
929
(157)
(80)
2015
£’000
0
0
2014
£’000
7,678
7,678
The prior year exceptional costs related to the settlement of a litigation claim with Gul Bottlers (PVT) Ltd.
5. Finance income and expense
Finance income comprises:
Bank interest receivable
Finance expense comprises:
Net interest income on defined benefit pension scheme assets
Interest on defined benefit pension scheme obligations
26
26
Finance expense
48
Notes
2015
£’000
2014
£’000
213
257
(820)
1,021
201
(1,001)
1,165
164
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2015
6. Directors and employees
a. Average number of persons employed during the year, including directors:
Total
2015
Number
178
2014
Number
171
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)
Accrued under 2014 - 2016 Growth Securities Ownership Plan
The employment costs for the parent Company amounted to
£8,724,000 (2014: £7,911,000).
Key management personnel compensation
Key management personnel are those persons having authority
and responsibility for planning, directing and controlling the
activities of the Group, including the directors of the Company
listed on page 33.
Wages and salaries
Pension costs
Awards under annual Growth Securities Ownership Plan
Accrued under 2014 - 2016 Growth Securities Ownership Plan
Accrued under Long Term Incentive Plan
2015
£’000
7,677
736
304
37
1,017
9,771
2015
£’000
806
31
0
477
247
1,561
2014
£’000
7,155
782
333
103
929
9,302
2014
£’000
565
25
165
471
0
1,226
The highest paid director has received £386,000 (2014:
£331,000) excluding pension contributions.
Benefits are accruing to 3 directors (2014: 2 directors) under
a defined contribution scheme, the highest paid director has
received contributions of £15,000 in the year.
Further information regarding directors’ remuneration and the
Growth Securities Ownership Plan is provided in the directors’
report on pages 32 to 35.
49
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2015
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
2015
£’000
5,425
33
5,458
429
(84)
345
2014
£’000
3,771
(123)
3,648
166
(38)
128
Total tax expense in the consolidated income statement
5,803
3,776
The tax expense is wholly in respect of UK taxation.
b. Tax reconciliation
Profit before taxation
Profit before taxation multiplied by the standard rate of corporation tax in the United
Kingdom of 20.25% (2014: 21.5%)
Effect of:
Non-deductible expenses
Impact on deferred tax of use of hybrid tax rate
Other timing differences
Adjustments to the tax charge in respect of prior years
Income not taxable for tax purposes
Depreciation for the year lower than/(greater than) capital allowances
Opening share scheme deferred tax
Impact on deferred tax due to rate change
2015
£’000
28,036
5,677
134
0
(74)
(50)
(38)
20
39
95
2014
£’000
17,922
3,853
71
62
1
(162)
0
(49)
0
0
Total tax expense in the consolidated income statement
5,803
3,776
The effective rate of tax for the year of 21.7% (2014: 21.1%) is
higher than the standard rate of corporation tax in the United
Kingdom (20.25%). The differences are explained above.
c. The effective rate of tax on profit is 21.7% (2014: 21.1%).
d. Tax on items recognised in other comprehensive expense
In addition to the amount charged to the consolidated income
statement, £273,177 (2014: £436,000) has been recognised in
other comprehensive (expense)/income, being the movement
on deferred taxation relating to retirement benefit obligations
and employee benefits.
50
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2015
8. Equity dividends
Interim dividend 8.00p (2014: 7.10p) paid 28 August 2015
Final dividend for 2014 15.30p (2013: 13.30p) paid 5 May 2015
2015
£’000
2,949
5,640
8,589
2014
£’000
2,618
4,900
7,518
The interim dividend for the prior year of £2,618,000 was paid
on 29 August 2014.
The 2015 final proposed dividend of £6,507,000 (17.60p per
share) has not been accrued as it had not been approved by
the year end.
9. Earnings per share
Earnings per share (basic)
Earnings per share (diluted)
Earnings per share (basic) - before exceptional items
Earnings per share (diluted) - before exceptional items
Earnings per share - before exceptional items
2015
60.33p
60.25p
60.33p
60.25p
2014
38.39p
38.34p
55.03p
54.96p
2015
Weighted
average
number of
shares
Earnings
£’000
Earnings
per share
Earnings
£’000
2014
Weighted
average
number of
shares
Earnings
per share
Basic earnings per share
22,232
36,849,638
60.33p
14,146
36,846,564
38.39p
Dilutive effect of share options
52,981
45,714
Diluted earnings per share
22,232
36,902,619
60.25p
14,146
36,892,278
38.34p
Earnings per share before exceptional items has been
presented in addition to the earnings per share as defined
in IAS 33 “Earnings per share” since in the opinion of the
directors, this provides shareholders with a more meaningful
representation of the earnings derived from the Group’s
operations. It can be reconciled from the basic earnings per
share as follows:
2015
Weighted
average
number of
shares
Earnings
£’000
Earnings
per share
Earnings
£’000
2014
Weighted
average
number of
shares
Earnings
per share
Basic earnings per share
22,232
36,849,638
60.33p
14,146
36,846,564
38.39p
Exceptional items
Taxation in respect of exceptional items
Basic earnings per share before exceptional
items
0
0
7,768
(1,637)
22,232
36,849,638
60.33p
20,277
36,846,564
55.03p
Dilutive effect of share options
52,981
45,714
Diluted earnings per share before exceptional
items
22,232
36,902,619
60.25p
20,277
36,892,278
54.96p
51
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2015
10. Property, plant and equipment
Group
Cost
Parent
Land and
buildings
£’000
Property,
plant and
equipment
£’000
Total
£’000
Cost
Land and
buildings
£’000
Property,
plant and
equipment
£’000
Total
£’000
At 1 January 2014
0
5,355
5,355
At 1 January 2014
0
2,434
2,434
Additions
Disposals
3,444
591
4,035
Additions
0
(139)
(139)
Disposals
3,444
0
235
(3)
At 1 January 2015
3,444
Additions
Disposals
0
0
5,807
1,767
(82)
9,251
1,767
(82)
At 1 January 2015
3,444
2,666
Additions
Disposals
0
0
442
(3)
3,679
(3)
6,110
442
(3)
At 31 December 2015
3,444
7,492
10,936
At 31 December 2015
3,444
3,105
6,549
Depreciation
At 1 January 2014
Charge for the year
On disposals
At 1 January 2015
Charge for the year
On disposals
Land and
buildings
£’000
Property,
plant and
equipment
£’000
Total
£’000
Depreciation
Land and
buildings
£’000
Property,
plant and
equipment
£’000
Total
£’000
0
40
0
40
69
0
4,060
4,060
At 1 January 2014
440
480
Charge for the year
(106)
(106)
On disposals
4,394
4,434
At 1 January 2015
433
(61)
502
(61)
Charge for the year
On disposals
0
40
0
40
69
0
2,079
2,079
232
0
2,311
202
(1)
272
0
2,351
271
(1)
At 31 December 2015
109
4,766
4,875
At 31 December 2015
109
2,512
2,621
Net book value at
31 December 2015
Net book value at
31 December 2014
3,335
2,726
6,061
3,404
1,413
4,817
Net book value at
31 December 2015
Net book value at
31 December 2014
3,335
593
3,928
3,404
355
3,759
52
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2015
11. Goodwill
Group
Cost
At 1 January 2014
Acquisitions
At 1 January 2015
Parent
Cost
At 1 January 2014
£’000
16,057
390
Acquisitions
16,447
At 1 January 2015
Acquisition - Nichols Dispense (S.W.) Limited
157
Acquisitions (see below)
16,604
At 31 December 2015
Acquisition - Feel Good
At 31 December 2015
2,504
19,108
£’000
0
0
0
2,504
2,504
Group goodwill acquisitions for 2015 consist of the Feel
Good transaction referred to below and the acquisition of the
remaining 49% of the issued share capital of Nichols Dispense
(S.W.) Limited. The total goodwill is entirely attributable to the
Out of Home business.
On 23 July 2015, the parent company acquired the trade and
assets of Feel Good Drinks Limited, an established range of
premium juice drinks containing no added sugar and 100%
natural ingredients. Details of the fair value of identifiable
assets acquired, purchase consideration and goodwill are
shown in note 13.
All goodwill, aside from that arising on Feel Good Drinks Limited,
relates to the historic Out of Home business which is considered
by management to be one cash-generating unit sitting below
each of the Still and Carbonate operating segments:
Still
Out of Home
Carbonate
Out of Home
2015
£’000
2014
£’000
7,952
7,895
8,652
16,604
8,552
16,447
The £2.5m goodwill recognised in the year in respect of the
acquisition of the trade and assets of Feel Good Drinks Limited
remains unallocated to a cash-generating unit at 31 December
2015. The Management Committee are able to review the
performance of the acquisition at the operating segment level
(Still and Carbonate) however will formalise the allocation to a
specific cash-generating unit, which is lower than an operating
segment in line with IAS 36, in the forthcoming financial year.
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 consider 5% annual growth for five years to be
reasonable in light of company growth in the current year and
economic growth rates.
Impairment review
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 10.35% 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
Management have considered the allocation of the excess 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.
If the discount rate were to increase by 10%, the discounted
cash flows would still exceed the carrying amount, likewise
if the free cash flows were to reduce by 10%, the discounted
cash flows would still exceed the carrying amount.
53
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2015
12. Investments: shares in Group undertakings
Parent
Cost and net book amount
At 1 January 2014, 1 January 2015 and at 31
December 2015
£’000
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
%
100
100
100
100
Dispense Solutions (Wales) Limited *****
Festival Drinks Limited ***
Vimto (Out of Home) Limited (formerly Nichols
Dispense Limited)
Nichols Dispense (S.W.) Limited ****
%
100
100
100
100
***** Dispense Solutions (Wales) Limited is directly owned by
Nichols Dispense (S.W.) 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.
The Company directly owns Ben Shaws Dispense Drinks
Limited, Dayla Liquid Packing Limited and Vimto (Out of
Home) Limited.
*Beacon Drinks Limited is directly owned by Vimto (Out of
Home) Limited.
**Cabana Soft Drinks Limited is directly owned by Vimto (Out
of Home) Limited.
*** Festival Drinks Limited is directly owned by Vimto (Out of
Home) Limited.
**** Nichols Dispense (S.W.) Limited is directly owned by
Vimto (Out of Home) Limited.
Investments in associates
The following entity has been included in the consolidated
financial statements using the equity method:
Name
The Noisy Drinks Company Limited
United Kingdom
2015
49%
2014
0%
Country of incorporation
and principal place of
business
Proportion of ownership
interest held as at 31
December
The carrying value of our investment in associate as at 31 December
2015 is summarised below:
Cash consideration equivalent to share of net assets acquired
Share of post-tax profits of equity accounted associate
Carrying value as at 31 December 2015
£’000
2,780
190
2,970
54
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2015
13. Intangibles
Group and Parent
Cost
At 1 January 2014
Acquisitions
At 1 January 2015
Acquisitions
At 31 December 2015
£’000
0
0
0
1,316
1,316
On 23 July 2015, the Group acquired the trade and assets of
Feel Good Drinks Limited, an established range of premium
juice drinks containing no added sugar and 100% natural
ingredients. The acquisition is a key part of the Group’s growth
strategy and we plan to further develop the brand across
our established UK and international markets, supported by
increased marketing resource and investment.
Details of the fair value of identifiable assets acquired,
purchase consideration and goodwill are as follows:
Inventories
Brand
Total assets acquired
Fair value of consideration paid
Cash
Contingent cash consideration (paid 2 February
2016)
Total consideration
Goodwill (note 11)
Fair Value
£’000
384
1,316
1,700
£’000
3,884
320
4,204
2,504
The goodwill recognised on the acquisition relates to expected
synergies from combining operations of Feel Good and
Nichols plc. Feel Good has an important part to play in all of
the Group’s routes to market and the brand is a core element
of the Group’s future growth strategy. There is no further
contingent consideration on the acquisition other than as
disclosed above.
The post-acquisition revenue and gross profit of the acquiree
included in the consolidated income statement for the
reporting period amounts to £1.2m and £0.4m respectively.
Revenue of £2.9m and gross profit of £1.0m would have
been achieved had the business combination occurred at the
beginning of the reporting period.
55
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2015
14. Deferred tax assets and liabilities
Movement in temporary differences during the year
Group
Net balance at 1
January 2015
£’000
Recognised
in income
£’000
Recognised in
other comprehensive
expense
£’000
Net balance at 31
December 2015
£’000
(37)
294
1,277
95
1,629
(4)
(47)
(233)
(59)
(343)
0
0
(274)
0
(274)
(41)
247
770
36
1,012
Net balance at 1
January 2014
£’000
Recognised
in income
£’000
Recognised in
other comprehensive
income
£’000
Net balance at 31
December 2014
£’000
28
314
971
8
1,321
(65)
(20)
(130)
87
(128)
0
0
436
0
436
(37)
294
1,277
95
1,629
Net balance at 1
January 2015
£’000
Recognised
in income
£’000
Recognised in
other comprehensive
expense
£’000
Net balance at 31
December 2015
£’000
34
294
1,277
94
1,699
11
(47)
(233)
(58)
(327)
0
0
(274)
0
(274)
45
247
770
36
1,098
Net balance at 1
January 2014
£’000
Recognised
in income
£’000
Recognised in
other comprehensive
income
£’000
Net balance at 31
December 2014
£’000
28
314
971
8
1,321
6
(20)
(130)
86
(58)
0
0
436
0
436
34
294
1,277
94
1,699
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
56
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2015
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
45
247
770
36
1,098
33
294
1,277
95
1,699
(86)
(70)
0
0
0
0
0
0
(41)
247
770
36
(86)
(70)
1,012
(37)
294
1,277
95
1,629
Parent
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
45
247
770
36
1,098
34
294
1,277
94
1,699
0
0
0
0
0
0
0
0
0
0
45
247
770
36
1,098
34
294
1,277
94
1,699
15. Inventories
Finished goods
Raw materials
Total inventories
Group
Parent
2015
£’000
3,378
567
3,945
2014
£’000
3,900
812
4,712
2015
£’000
2,430
0
2014
£’000
2,634
0
2,430
2,634
In 2015, the Group write-down of inventories to net realisable value amounted to £173,000 (2014: £257,000).
57
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2015
16. Trade and other receivables
Trade receivables
Amounts owed by Group undertakings
Other receivables
Prepayments and accrued income
Group
Parent
2015
£’000
24,640
0
2,710
510
2014
£’000
21,919
0
876
730
2015
£’000
19,097
362
849
457
2014
£’000
16,981
3,257
304
578
27,860
23,525
20,765
21,120
All 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 £736,000 (2014:
£424,000) has been recorded accordingly.
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
2015
£’000
2014
£’000
Parent
Up to 30 days overdue
2,105
3,118
Up to 30 days overdue
Over 30 days and up to 60 days overdue
Over 60 days and up to 90 days overdue
171
90
188
82
2,366
3,388
Over 30 days and up to 60 days overdue
Over 60 days and up to 90 days overdue
2015
£’000
2014
£’000
1,122
2,402
146
86
149
76
1,354
2,627
At 1 January
2015
£’000
Charge in the
year
£’000
Utilised
£’000
At 31 December
2015
£’000
424
327
(14)
737
At 1 January
2014
£’000
Release in the
year
£’000
Utilised
£’000
At 31 December
2014
£’000
528
(85)
(19)
424
At 1 January
2015
£’000
Charge in the
year
£’000
Utilised
£’000
At 31 December
2015
£’000
415
325
(4)
736
At 1 January
2014
£’000
Release in the
year
£’000
Utilised
£’000
At 31 December
2014
£’000
512
(90)
(7)
415
Group
Bad debt provision
Group
Bad debt provision
Parent
Bad debt provision
Parent
Bad debt provision
58
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2015
17. 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
2015
£’000
5,364
0
802
11,961
18,127
2,679
20,806
2014
£’000
5,705
0
720
13,061
19,486
1,859
21,345
2015
£’000
4,244
1,740
270
10,727
16,981
1,160
18,141
2014
£’000
4,097
805
(24)
12,332
17,210
1,090
18,300
All amounts shown above are short-term. The carrying values
are considered to be a reasonable approximation of fair value.
At 31 December 2015, liabilities have contractual maturities
which are summarised below:
Group
Trade payables
Other short-term financial liabilities
Parent
Trade payables
Other short-term financial liabilities
18. Share capital
2015
2014
Within 6
months
£’000
5,364
11,962
17,326
Within 6 to 12
months
£’000
0
0
0
Within 6
months
£’000
5,705
13,061
18,766
2015
2014
Within 6
months
£’000
4,244
10,727
14,971
Within 6 to 12
months
£’000
0
1,740
1,740
Within 6
months
£’000
4,097
12,332
16,429
Within 6 to 12
months
£’000
0
0
0
Within 6 to 12
months
£’000
0
805
805
Allotted, issued and fully paid 36,968,772 (2014: 36,968,772) 10p ordinary
shares
2015
£’000
3,697
2014
£’000
3,697
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 2015 and 31 December 2014.
59
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2015
19. Share options
The Group operates a Long Term Incentive Plan (LTIP) for
certain Executive Board members to reward performance
during the year. These options are exercisable on the
completion of three years service from the date of grant.
The Group also 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
Date of Grant
1 June 2011
1 June 2011
1 June 2012
1 June 2012
31 May 2013
31 May 2013
1 June 2014
1 June 2014
1 June 2015
1 June 2015
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
27,177
8,970
18,179
18,925
19,545
5,841
32,327
10,978
18,851
5,707
£4.81
£3.85
£0.96 3.00 years
2.43%
5.00%
2.75%
32.94%
£4.81
£3.85
£0.96 5.00 years
2.43%
5.00%
1.75%
32.94%
£6.30
£5.04
£1.26 3.00 years
2.16%
5.00%
0.66%
30.63%
£6.30
£5.04
£1.26 5.00 years
2.16%
5.00%
1.01%
30.63%
£8.85
£7.08
£1.77 3.00 years
1.79%
5.00%
0.50%
21.02%
£8.85
£7.08
£1.77 5.00 years
1.79%
5.00%
0.92%
21.02%
£10.56
£7.92
£2.64 3.00 years
1.86%
5.00%
1.04%
22.10%
£10.56
£7.92
£2.64 5.00 years
1.86%
5.00%
1.87%
22.10%
£12.19
£12.19
£9.51
£9.51
£2.68 3.00 years
1.84%
5.00%
1.09%
27.32%
£2.68 5.00 years
1.84%
5.00%
1.37%
27.32%
Long Term Incentive Plan
Date of Grant
31 July 2013
31 May 2015
Number
granted
17,561
2,000
Share price
on grant
date
Exercise
price
Fair values
on grant
date
Vesting
period
Expected
dividend
yield
Lapse
rate
Risk-free
rate
Volatility
£10.20
£0.00
£10.20 3.00 years
1.70%
5.00%
0.47%
20.50%
£12.19
£0.00
£12.19 3.00 years
1.84%
5.00%
1.09%
27.32%
Expected volatility
Risk-free rate
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.
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 June 2010
1 June 2011
1 June 2012
31 May 2013
31 July 2013
1 June 2014
31 May 2015
1 June 2015
At 1 January
2015
Granted
Exercised
Lapsed
At 31 December
2015
Exercise
price
per share
3,295
6,247
20,394
22,044
17,561
42,352
0
0
0
0
0
0
0
0
2,000
24,558
(3,295)
(801)
(15,157)
0
0
0
0
0
0
0
0
(1,524)
0
(4,911)
0
(3,763)
0
283.00p
5,446
385.00p
5,237
504.00p
20,520
708.40p
17,561
0.00p
37,441
792.30p
2,000
0.00p
20,795
950.90p
111,893
26,558
(19,253)
(10,198)
109,000
60
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2015
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.
At 31 December 2015, options over 109,000 shares were
outstanding under Employee Share Option Plans (2014:
111,893).
The share price during 2015 varied between 892.00p and
1,492.00p and the weighted average price for the year was
1,277.00p.
2015
2014
Weighted average
exercise price
in pence
Weighted average
exercise price
in pence
Number
561.14
105,402
950.90
43,305
461.23
(27,766)
838.28
(9,048)
630.38
111,893
420.76
792.30
390.62
555.41
561.14
Number
111,893
26,558
(19,253)
(10,198)
109,000
At 1 January
2015
£’000
34,483
At 1 January
2015
£’000
19,124
Cash
flow
£’000
955
Cash
flow
£’000
3,783
At 31 December
2015
£’000
35,438
At 31 December
2015
£’000
22,907
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
21. Financial instruments
Exposure to treasury management, liquidity, credit and currency risks arise 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 where required, short-term borrowing facilities.
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 ($) and Euros (€). During
2015, the Group entered into foreign currency transactions
that over the course of the year resulted in the Group having
a ‘natural currency 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.
61
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2015
21. Financial instruments (continued)
Foreign currency assets:
US Dollar
Euro
Swiss Franc
2015
£’000
2,136
2,862
304
5,302
2014
£’000
4,057
3,942
0
7,999
Foreign currency sensitivity
Some of the Group’s transactions are carried out in US
Dollars and Euros. As a result, management have undertaken
sensitivity analysis to consider the financial impact if Sterling
had both strengthened and weakened against the US Dollar
and the Euro.
If Sterling had strengthened against the US Dollar and Euro by
5% (2014: 5%), then this would have had the following impact:
Net result for the year
USD
£’000
(102)
2015
Euro
£’000
(136)
Total
£’000
(238)
USD
£’000
(190)
If Sterling had weakened against the US Dollar and Euro by 5%
(2014: 5%), then this would have had the following impact:
Net result for the year
USD
£’000
112
2015
Euro
£’000
151
Total
£’000
263
USD
£’000
217
2014
Euro
£’000
(242)
2014
Euro
£’000
281
Total
£’000
(432)
Total
£’000
498
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.
22. Summary of financial assets and liabilities by category
The IAS 39 categories of financial assets included in the statement of financial position and the headings in which they are
included are as follows:
Current assets
Group
Parent
Loans and other receivables
Trade receivables and other receivables
2015
£’000
27,350
2014
£’000
2015
£’000
22,795
20,308
2014
£’000
20,542
Cash and cash equivalents
35,438
34,483
22,907
19,124
Total financial assets
62,788
57,278
43,215
39,666
The IAS 39 categories of financial liability included in the statement of financial position and the headings in which they are
included are as follows:
Current liabilities
Group
Parent
Other financial liabilities at amortised cost
Trade and other payables
Total financial liabilities
2015
£’000
5,364
5,364
2014
£’000
5,705
5,705
2015
£’000
5,984
5,984
2014
£’000
4,902
4,902
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 2014. At 31 December 2015, the Group had no
debt and therefore the capital structure consists of equity only.
62
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2015
24. Operating leases
At the balance sheet date, the Group had outstanding
commitments for future minimum lease payments under
non-cancellable operating leases, which fall due as follows:
Within one year
Between two and five years
More than five years
Group
Parent
2015
£’000
658
1,041
313
2,012
2014
£’000
496
940
5
1,441
2015
£’000
2014
£’000
382
423
0
805
301
390
0
691
The Group leases its operating depots under non-cancellable
operating lease agreements 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)
Transaction value
Year ended 31 December
Balance outstanding
as at 31 December
2015
£’000
1,539
2014
£’000
1,173
2015
£’000
(1,578)
2014
£’000
2,452
All sales noted above with the related parties are conducted in
line with similar transactions with external parties.
balance outstanding on this loan as at 31 December 2015 was
£908,282.
Details of key management personnel compensation have
been disclosed in note 6, no other transactions were entered
into with key management personnel in the year.
During the year, a loan of £1,200,000 was provided to The
Noisy Drinks Company Limited, repayable over 3 years. The
Two family members of the Non-Executive Chairman are
employed in management roles within the business. The total
remuneration paid in the year was £110,000 (2014: £98,000).
An accrued amount of £30,000 (2014: £27,000) will be paid in
the subsequent financial year.
26. Pension obligations and 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 £293,000
(2014: £256,000).
The Company operates a defined benefit plan in the UK. A full
actuarial valuation was carried out on 5 April 2014 and updated
at 31 December 2015 by an independent qualified actuary.
The assets of the defined benefit plan are managed by
a pension fund that is legally separated from the Group.
Governance of the plan is the responsibility of appointed
trustees, acting on professional advice.
The plan is exposed to a number of risks, including changes
to long-term UK interest rates and inflation expectations,
movements in global investment markets, changes in UK life
expectancy rates and regulatory risk from changes in UK
pension legislation.
Interest rate risk
The present value of the defined benefit liability is calculated
using a discount rate determined by reference to market yields
of high quality corporate bonds. The estimated term of the
bonds is consistent with the estimated term of the defined
benefit obligation and it is denominated in sterling. A decrease
in market yield on high quality corporate bonds will increase
the Group’s defined benefit liability, although it is expected
that this would be offset partially by an increase in the fair
value of certain of the plan assets.
Investment risk
The plan assets at 31 December 2015 are predominantly equity
and debt instruments.
Longevity risk
The Group is required to provide benefits for life for the
members of the defined benefit liability. Increases in the life
expectancy of the members, where the pension payments are
linked to CPI, will increase the defined benefit liability.
63
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2015
26. Pension obligations and employee benefits (continued)
Inflation risk
A significant proportion of the defined benefit liability is linked
to inflation. An increase in the inflation rate will increase the
Group’s liability. A portion of the plan assets are inflation-
linked debt securities which will mitigate some of the effects of
inflation.
A reconciliation of the pension obligation and plan assets to the amounts presented in the statement of financial position for 2015
and 2014 is shown below:
Present value of funded obligations
Fair value of plan assets
Deficit in the plan
Related deferred tax asset
Net liability recognised
Defined benefit obligation
31 December 2015
£’000
31 December 2014
£’000
(27,593)
23,700
(3,893)
710
(3,183)
(29,970)
23,780
(6,190)
1,368
(4,822)
The details of the Group’s defined benefit obligation are as follows:
31 December 2015
£’000
31 December 2014
£’000
Opening defined benefit obligation
Current service cost (Company only)
Interest cost
Actual contributions paid by plan participants
Experience adjustment
Actuarial (gains)/losses from changes in
financial assumptions
Actuarial gains from changes in demographic
assumptions
Benefits paid - including insurance premiums
Closing defined benefit obligation
29,970
37
1,021
6
-
(1,506)
(315)
(1,620)
27,593
26,250
103
1,165
13
(110)
3,918
(509)
(860)
29,970
Plan assets
The reconciliation of the balance of the assets held for the Group’s defined benefit plan is presented below:
Fair value of plan assets at start of accounting
period
Interest income
Return on plan assets (excluding amounts
included in net interest)
Contributions paid by the employer
Actual contributions paid by plan participants
Benefits paid
Fair value of plan assets at end of accounting
period
31 December 2015
£’000
31 December 2014
£’000
23,780
22,203
820
(189)
903
6
(1,620)
23,700
1,001
503
920
13
(860)
23,780
64
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2015
The actual return on plan assets was £631,000 (2014: £1,504,000). Plan assets do not comprise any of the Group’s own financial
instruments or any assets used by Group companies. Plan assets can be broken down into the following category of investments:
The major categories of plan assets, measured
at fair value are:
31 December 2015
£’000
31 December 2014
£’000
Equities
Gilts
Bonds
Other, including cash
Total fair value of assets
15,991
1,605
3,278
2,826
23,700
14,791
1,684
3,864
3,441
23,780
Assets included which do not have a quoted
market value:
31 December 2015
£’000
31 December 2014
£’000
Equities
Gilts
Other, including cash
Total
-
-
-
-
-
-
-
-
The significant actuarial assumptions used for
the valuations are as follows:
31 December 2015
£’000
31 December 2014
£’000
Future salary increases
Rate of increase in (post 1997) pensions in
payment (a)
Discount rate at 31 December
Expected rate of inflation - RPI
Overall expected return on plan assets
3.15%
3.25%
3.80%
3.15%
3.80%
3.10%
3.20%
3.50%
3.10%
3.50%
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 assuming salaries will increase in line
with the RPI inflation assumption.
Assumptions regarding future mortality experience are
set based on the advice of actuaries and in accordance
with published statistics. For members not yet retired, life
expectancies have been estimated as 89 years for men (2014:
90 years) and 92 years for women (2014: 92 years). For
current pensioners, life expectancies have been estimated as
87 years for men (2014: 87 years) and 90 years for women
(2014: 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 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.
Defined benefit plan expenses
Amounts recognised in profit or loss are:
Current service cost (Company)
Net interest cost (on net defined benefit
liability)
Total amount recognised in the consolidated
income statement
31 December 2015
£’000
31 December 2014
£’000
37
201
238
103
164
267
65
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2015
26. Pension obligations and employee benefits (continued)
The current service cost is included in employee benefits expense and the net interest expense is included in finance costs.
Amounts recognised in other comprehensive income relating to the Group’s defined benefit plan are as follows:
Remeasurements recognised in other
comprehensive income:
Actuarial (losses)/gains on the assets
Experience adjustment
Actuarial gains/(losses) from changes in
financial assumptions
Changes in demographic assumptions
Total gain/(loss) recognised in other
comprehensive income
31 December 2015
£’000
31 December 2014
£’000
(189)
-
1,506
315
1,632
503
110
(3,918)
509
(2,796)
Other defined benefit plan information
Employees of the Group are required to contribute a fixed
6% of their pensionable salary.
The remaining contribution is partly funded by the Group’s
subsidiaries. The funding requirements are based on the
pension funds actuarial measurement framework as set out
in the funding policies.
The weighted average duration of the defined benefit
obligation at 31 December 2015 is 18 years (2014: 18 years).
The significant actuarial assumptions for the determination
of the defined benefit obligation are the discount rate, the
inflation assumption and life expectancy.
The calculation of the net defined benefit liability is sensitive
to these assumptions.
Based on historical data, the Group expects contributions of
£900,000 to be paid in 2016.
The table below summarises the sensitivity of the obligation
to changes to these assumptions:
Increase in discount rate by 0.5%
Increase in price inflation adjustment by 0.5%
1 year increase in life expectancy
31 December 2015
31 December 2014
-8.00%
4.00%
3.00%
-9.00%
4.00%
3.00%
The method and assumptions used in this analysis are similar to those used in the previous year.
27. Audit exemption statement
end of the financial year (being the year ended 31 December
Under section 479A of the Companies Act 2006 the
Group is claiming exemption from audit for the subsidiary
companies listed below. The parent undertaking, Nichols
plc, registered number 238303, guarantees all outstanding
liabilities to which the subsidiary company is subject at the
2015 for each company listed below unless otherwise
stated). The guarantee is enforceable against the parent
undertaking by any person to whom the subsidiary company
is liable in respect of those liabilities.
Beacon Drinks Limited
Ben Shaws Dispense Drinks Limited
Cabana Soft Drinks Limited
Dayla Liquid Packing Limited
Festival Drinks Limited
Vimto (Out of Home) Limited (formerly Nichols Dispense Limited)
Nichols Dispense (S.W.) Limited
Dispense Solutions (Wales) Limited (financial year ended 30 September 2015)
Company Number
1732905
231218
938594
603111
1256006
8795779
8766560
8671127
28. Contingent liability
The Company had previously entered into contracts
with some of its senior management relating to incentive
schemes which were designed to motivate, retain and
engage those key employees. HMRC have written to the
Company with their initial view that the arrangements
should have been taxed as employment income which the
Company and its advisors dispute. If HMRC pursues its
current position and is successful in its argument, then the
Company may have to pay up to £3.5m in income tax and
national insurance. The employees who are party to the
66
contracts have formally indemnified the Company in relation
to income tax and employee’s national insurance and an
amount of up to £2.7m can be requested from them. The
directors have obtained external advice and on the basis of
this do not believe that the company has a liability for any
additional tax or national insurance. In common with such
disputes with HMRC, it may take some time to settle and the
directors are unable to assess how long this will take and the
timing of any potential settlement if required.
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2015
29. Post balance sheet events
On 8 January 2016, the Group acquired the remaining 51%
of the issued share capital of The Noisy Drinks Company
Limited for £4.1m.
The book value of the total net assets acquired (being 100%
of book value rather than 51%) is as follows:
Intangibles
Property, plant and equipment
Inventories
Receivables
Cash
Payables
Total
£’000
357
1,194
542
574
603
(1,891)
1,379
At the date of authorisation of these financial statements, a
detailed assessment of the fair value of the identifiable net
assets has not been completed.
UNAUDITED FIVE YEAR SUMMARY
YEARS ENDED 31 DECEMBER
Revenue
Operating profit before exceptional items, IAS 19 and
Long Term Incentive Scheme Charges
Exceptional items
IAS 19 operating profit charges
Long Term Incentive Scheme operating profit charges
Operating profit after exceptional items, IAS 19 and Long
Term Incentive Scheme Charges
Net finance income/(expense)
Share of post-tax profits of equity accounted associate
Profit before taxation
Taxation
Profit after taxation
Dividends paid
Retained earnings
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
Restated
2014
£’000
2013
£’000
2012
£’000
2011
£’000
109,205
105,529
103,642
95,072
26,464
25,194
21,741
19,038
(7,768)
(3,680)
(103)
(764)
17,829
93
0
(96)
(2,671)
18,747
83
0
0
(107)
(1,117)
20,517
(7)
0
0
(119)
(770)
18,149
(44)
0
17,922
18,830
20,510
18,105
(3,776)
(4,721)
(5,252)
(4,779)
14,146
14,109
15,258
13,326
(7,518)
(6,639)
(5,866)
(5,195)
6,628
7,470
38.39p
38.30p
38.34p
38.25p
55.03p
45.79p
54.96p
45.72p
20.40p
18.02p
9,392
41.43p
41.38p
41.43p
41.38p
15.92p
8,131
36.28p
36.25p
36.28p
36.25p
14.10p
2015
£’000
109,279
28,888
0
(37)
(1,017)
27,834
12
190
28,036
(5,803)
22,233
(8,589)
13,644
60.33p
60.25p
60.33p
60.25p
23.30p
67
NOTICE OF ANNUAL
GENERAL MEETING
Notice is hereby given that the twenty fourth Annual General
Meeting of Nichols plc (“Company”) will be held at Nichols
plc, Laurel House, Woodlands Park, Ashton Road, Newton-Le-
Williows, Merseyside, WA12 0HH on Wednesday, 27 April 2016
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, strategic
report and directors’ and auditors’ reports for the year
ended 31 December 2015.
To declare a final dividend for the year ended 31
December 2015 of 17.60 pence per ordinary share of 10
pence in the capital of the Company to be paid on 3
May 2016 to shareholders whose names appear on the
register of members at the close of business on 1 April
2016.
To re-elect T J Croston, who retires by rotation, as a
director of the Company.
To reappoint A Milne, who has been appointed by the
Board since the last Annual General meeting, as a
director of the Company.
To reappoint J Gittins, who has been appointed by the
Board since the last Annual General meeting, as a
director of the Company.
To reappoint BDO 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 £1,228,135.90, 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 28 July 2017
(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).
9.1.2 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,
9.2 otherwise than pursuant to paragraph 8.1 of this
resolution, up to an aggregate nominal amount of
£184,244, 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 28 July 2017
(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).
10. 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:
10.1
the maximum aggregate number of Shares which may be
purchased is 3,684,882:
10.2 the minimum price (excluding expenses) which may be
paid for a Share is 10p; and
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 28 July 2017
(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
To consider and, if thought fit, to pass the following resolutions
as special resolutions:
9.
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 shallbe limited to the allotment
of equity securities or sale of treasury shares:
Tim Croston
Secretary
2 March 2016
9.1
in connection with an offer of equity securities (whether
by way of a rights issue, open offer or otherwise):
Registered Office, Laurel House, Woodlands Park, Ashton
Road, Newton-Le-Willows, WA12 0HH.
9.1.1 to holders of ordinary shares in the capital of the
Registered in England and Wales No. 238303
Company in proportion (as nearly as practicable) to the
respective numbers of ordinary shares held by them; and
68
GENERAL NOTES
1. To receive the Company’s annual accounts, strategic report
and directors’ and auditors’ reports for the year ended 31
December 2015.
2. Biographical details of all those directors who are offering
themselves for re-election at the meeting are set out on
pages 30-31 of the enclosed annual report and accounts.
3. 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, 25 April 2016
(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.
4. 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 5 to 8 below and the notes to the form of proxy.
5. 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.
6. 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 asset services, PXS, 34
Beckenham Road, Beckenham, Kent BR3 4TU so as to
arrive no later than 11:00 a.m. on Monday, 25 April 2016
(or, in the event that the meeting is adjourned, no later
than 48 hours (excluding any part of the day that is not a
working day) before the time of any adjourned meeting).
7. 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.
8. 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 mmby the
Company’s Registrar, Capita Registrars (CREST ID RA10)
no later than 11:00 a.m. on Monday, 25 April 2016 (or, if the
meeting is adjourned, no later than 48 hours (excluding
any part of the day that is not a working day) 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 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.
9. 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.
10. 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.
11. As at 16 March 2016 (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
102,600 ordinary shares in treasury, in respect of which it
cannot exercise any votes, the total voting rights
in the Company as at 16 March 2016 are 37,071,372.
12. 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.
69
GENERAL NOTES & DIRECTIONS TO THE
ANNUAL GENERAL MEETING
Directions to the Annual General Meeting:
Leave the M6 at Junction 23 and take the A49
north towards Newton, Woodlands Park is on the
left in approximately 0.3miles. On entering the
estate, Laurel House is accessed from the fourth
exit of the roundabout.
70
NOTES
FINANCIAL CALENDAR
Preliminary Results Announced
2 March 2016
Annual General Meeting
27 April 2016
Interim Results Announced
21 July 2016
71
Laurel House, Woodlands Park, Ashton Road,
Newton-Le-Willows, Merseyside, WA12 0HH
01925 22 22 22 www.nicholsplc.co.uk
72