Thursday 24 January 2019

Fever-Tree shares fizz as drinks firm becomes number one mixer brand

Shares were nearly 5% higher in morning trading on the London Stock Exchange.

Fever-Tree drinks (PA)
Fever-Tree drinks (PA)

By Ben Woods, Press Association Chief City Correspondent

Shares in Fever-Tree have fizzed up after the premium mixer maker seized the UK market’s top spot and backed annual earnings to outstrip forecasts.

Shares were nearly 5% higher in morning trading on the London Stock Exchange, as investors toasted a bright outlook from the drinks firm, with total full-year sales expected to soar 66% to £169 million.

The boost was underpinned by a rousing performance on home soil, as a strong second half of 2017 transformed the company into the nation’s number one player and put annual UK sales on track for 96% growth compared with 2016.

Fever-Tree, which was launched in the UK in 2005 by Charles Rolls and Tim Warrillow, said the “full year will be comfortably ahead of market expectations”.

Mr Warrillow, co-founder and chief executive, said: “I am very proud of our performance in 2017, which has seen Fever-Tree end the year as the number one mixer brand at UK retail.

“While we have seen strong growth across all regions, our performance in the UK over the Christmas period was once again exceptional.

“There is clear evidence that the same trends of premiumisation and mixability that we’ve previously highlighted are accelerating and we are increasingly excited by the global opportunity this presents, particularly as we transition to our own operations in the US.”

Annual sales across continental Europe are expected to be 42% ahead of 2016, while North America revenue looks set to lift by 39% over the period.

Focusing on the wider overseas performance, rest-of-the-world sales are also on track to chalk up a 57% rise at year end.

George Salmon, Hargreaves Lansdown’s equity analyst, said Fever-Tree was continuing to reap the rewards of gin’s enduring popularity.

He said: “With gin sales soaring, 2017 was the year of the juniper. However, it shouldn’t be forgotten what a good job Fever-Tree has done in capitalising on this tailwind.

“With UK sales nigh-on doubling, its tonic is now among the most popular mixers in the country. Not bad for a brand that’s only been around since 2005.

“The next chapter in the growth story is set to be written away from these shores.

“Fever-Tree has its sights on the US and Europe, and sales momentum in both these markets looks strong. Encouraging signs, but we can’t help but wonder what happens as and when the gin bubble bursts.”

Press Association

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