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(Reuters) - Soft drink maker Nichols Plc posted an 11 percent rise in first-half pre-tax profit helped by lower promotional spending and reduced discounts on carbonated drinks, and said full-year performance would be in line with current expectations.
The company, which sells its Vimto soft drink in over 65 countries, said on Thursday adjusted pre-tax profit rose to 10 million pounds ($17 million) in the six months to June 30 from 9 million pounds a year earlier.
Nichols said revenue for the first half rose 3 percent to 56.6 million pounds.
"The soft drink industry is notorious for very heavy promotions and discounts ... to some degree Nichols stepped back from some of the deep discounting and promotions which is what they are saying by driving value rather than volumes," analyst Nicola Mallard of Investec Securities told Reuters.
The brokerage has a "buy" rating on the stock with a target price of 1070 pence.
Nichols has been reducing its participation in the heavily promoted carbonates sector in a bid to improve profitability.
International sales, which account for about 21 percent of the group revenue, were down 12 percent from last year.
The company, which competes with the likes of Britvic Plc and A.G.Barr Plc, said it expected UK performance to maintain the positive trend seen in the first half of the year.
Irn-Bru maker A.G.Barr reported 5.2 percent rise in first-quarter revenue while soft drink maker Britvic reported a 4.7 percent rise in first-half revenue.
Nichols raised its interim dividend to 7.1 pence per share from 6.32 pence last year.
Shares in the company were up 1.5 percent at 949.5 pence at 0803 GMT on the London Stock Exchange.
(Reporting by Aastha Agnihotri in Bangalore; Editing by Gopakumar Warrier)