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Nichols taking the hit in Middle East

The sugar tax in the Middle East will provide even more challenges for Vimto maker Nichols this year. A 50% tax on sweetened juice drinks was introduced on 1 December in Saudi Arabia and the UAE. The Middle East dominates international sales, with around four-fifths of sales in the region during Ramadan, which starts on 23 April this year. 

 

The additional cost will be absorbed partly by Nichols and partly by a higher consumer price. The overall effect of the new tax will not be understood until the end of Ramadan. Management guidance is a pre- tax profit hit of between £2.5m and £4m. 

 

N+1 Singer forecasts a 2020 pre-tax profit of £29m, assuming the worst-case scenario, before a steady improvement in subsequent years. Interim figures will be announced on 22 July and there will be more news about the effect of the Middle East tax by then.

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Dematerialising with Avenir

Details of how the mandatory dematerialisation process for shareholdings will work in three years’ time remain sketchy. However, Avenir Registrars, sponsor of AIM Journal, is already employing smart technologies to put client issuers and investors ahead of the curve. Avenir do things differently, for example we don’t charge a CREST traffic fee for registry maintenance, so no nasty surprises for issuers.

 

Additionally, every physical certificate comes with a QR code as standard. So, a holding can be easily checked, free of charge, just by a quick scan of the camera on any smartphone.

Avenir can help you navigate the world of securities registration and benefit from electronic registers. For further information visit www.avenir-registrars.co.uk.

Ilika funds battery capacity upgrade 

Advanced materials developer Ilika is taking advantage of a 40% increase in the share price so far this year to raise £15m gross at 40p a share. There is also an open offer at the same price to raise up to £2m more.

 

The cash will be invested in the development of battery products. There is £4m required to move the Stearex battery technology into a third-party fabrication facility. Given the potential demand for the battery technology, there may be more cash required to increase capacity.

 

Ilika already has demand for Stearex products. The new facility will not be up and running until 2022 and in the following financial year revenues from the facility could be more than £12m. The rest of the cash should cover the period until this happens.

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