Analysis of Nichols Plc – Accounting Coursework

Arif Harbott
Arif Harbott

So my first piece of coursework for my MBA was an analysis of Nichols PLC in 1,200 words or less. You can read the full brief here.
My first question was what does Nichols PLC do as I had never heard of them? Well a quick check of their annual report shows that the main brand that they own is Vimto. I love Vimto so I knew that this was going to be a good assignment.

Report highlights

Nichols group comprises two divisions; soft drinks and dispense operation. The brand portfolio consists of Vimto, Panda and Sunkist, available in over 65 countries.

Financial Highlights

Figures in (£’000)20092008Movement
Operating Profit£12,501£9,80422%
Capital Employed£29,301£24,98815%
Nichols Financial Highlights

Nichols continued to increase revenues, operating profit and earnings through acquisition and organic growth.  Nichols is in a secure position with high cash reserves and low gearing with no formal borrowings.  It has an opportunity to continue growth through the use of cash reserves or increasing gearing through borrowing.   This would enable additional acquisitions or market expansion with a view to maximising shareholder returns.

Major events

  • International sales increased 33% to £12m (Middle Eastern sales grew 40%; African 11%).
  • Marketing campaigns drove national and international growth, netting 1 million new customers.
  • Acquired control of Dayla dispense operations (2008) giving access to the European premium juice dispense market.
  • £5.5m goodwill impairment (2008) due to review of acquired brands.
  • Post balance sheet acquisition of Ben Shaws ‘soft drinks on draught’ business.


  • Out-performed the UK soft drinks market.
  • Strong core international brand.
  • Strong cash balance could fund future expansion or acquisitions, accelerating growth.
  • Diversified into growing energy drinks market through acquisition.
  • Acquisitions consolidated Nichols’ position as number three in the dispense market.


  • Gearing could be considered too conservative and does not maximise shareholder returns for an outperforming business.  For example, borrowing could be used to fund expansion in emerging markets, building upon their international growth pattern.
  • Limited portfolio; high risk exposure to small number of core brands.
  • High dependency on UK market and third party suppliers.
  • Dispense operation dependent on pub growth which continues to contract within the UK.
  • Deficit in return on pension scheme assets.
  • Low investment in non-current assets despite high depreciation charges.

Our methodology

Doing an executive MBA means you have to balance study, work and family so you cannot afford to waste time. Like myself most of the people in my team have high-level project management experience so we quickly developed a methodology and ran a very tight ship. We kept meetings very short and concise meaning which meant we all had to be well prepared and up to speed. We all performed the basic analysis separately and then all came together to discuss common trends and to decide on the report structure. Then one person wrote the first draft of the document and everyone took turns at making changes until we had a final report we were happy with.

Final thoughts

Most of the coursework on the Cass MBA is done in groups and this is both a positive and a negative. It is great to work in a group of smart, driven people and I am very lucky that I am part of a very good group, but as with any group sometimes it can be quicker and easier to do it by yourself. Getting the first piece of coursework out of the way was a great bonding experience for our group and we have learnt a lot about each other on the battlefield.

The word count was very strictly applied and really makes you think about what is important. Our first draft was over 2,000 words so removing the less relevant parts meant you ended up with only the essential information.

Efficiency is key there is no point spending twice as much time for a few extra marks, you need to get the time vs. marks balance right.

Our final mark was well above the distinction grade so I think we deserve a big pat on the back all round.

If you want to read our full report we wrote I have linked it here.

Analysis of Nichols Plc – Accounting Coursework

3 thoughts on “Analysis of Nichols Plc – Accounting Coursework

  1. Hello, I’m a full-time student of MBA at Manchester Business School. We have identified Nichols PLC as a target for acquisition for one of our simulated M&A projects. I came across your article while doing research for the company, I was wondering if you would like to share your research on Nichols PLC with me.


    1. Hi Sana. The full report we wrote is linked to the blog post. As it was an accounting project we were only allowed to use the company reports and accounts. All of our calculations are included in the document appendix. Let me know if you want the Excel document that we used for the calculations.

  2. Hi, thanks for the information, I saw the attached document; we’re currently valuating the company as a potential merger target with a major European food brand and hence valuing the synergies. Now I know this probably not the content of your assignment but taking a look at the Excel sheet wont hurt. Could you please mail it to, I’d really appreciate that.


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