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Fevertree shares pop higher as tonic maker resumes normal service

“Reflecting the continued strong performance in the second half, the board expects that the outcome for the full year will be comfortably ahead of the board's expectations”
Investors have never had to wait so long between guidance upgrades

Fevertree Drinks PLC (LON:FEVR) fizzed higher on Thursday as the posh tonic maker resumed normal service by lifting its annual profit expectations.

The company, one of the biggest on AIM, has seen its share price plunge in recent months after it failed to upgrade its guidance in November, something it had always done since going public in 2014.

READ: Analysts tell investors to pour into Fevertree

But it returned to form today, telling investors: “Reflecting the continued strong performance in the second half, the board expects that the outcome for the full year will be comfortably ahead of the board's expectations.”

Fevertree expects revenue for the year ended 31 December to come in around 39% higher than 2017 at £236mln.

The UK continues to be the main growth driver, with sales climbing 52% over the year in the company’s home market. That included an “outstanding” summer and “strong” Christmas.

Sales growth in Europe accelerated to 24% with “positive momentum” seen across a number of its key markets, while the rest of the world revenue is expected to be 48% ahead of 2017.

US ready to star in 2019

The US is a potentially lucrative and, as yet, relatively untapped market for Fevertree and is regarded by many analysts as key to the firm’s future growth.

The company said it made “significant operational progress” across the pond last year, opening up its own US headquarters in New York and signing an exclusive on-trade agreement with Southern Glazer’s Wine & Spirits – the largest wine and spirits distributor in North America.

Sales in the US are expected to have jumped by around 21% but, perhaps more importantly, the work put in this year has provided an “excellent platform for further growth” in 2019.

Boss optimistic

“We have seen very strong momentum across the business during 2018,” said co-founder and chief executive Tim Warrillow.

“The UK delivered an exceptional performance while Europe has seen positive performance resulting in growth accelerating in the second half.

“We are particularly encouraged by the progress to date in the USA and the strong platform for further growth this provides.”

He added: “The progress we have seen during the last 12 months means we enter 2019 very well positioned and remain optimistic about the long-term global opportunity ahead.”

Fevertree shares rose 7.9% to 2,802p in early deals on Thursday.

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