Fever Tree’s shares sparkle on another set of blockbuster sales
The premium tonic business has taken control of its supply chain and operations in the US.
Fever Tree’s shares fizzed on Tuesday after the drinks company posted impressive sales growth and said it would be “comfortably” ahead of its financial targets for the year.
Revenue for the six months ended June 30 soared 45%, from £71.9 million to £104.2 million.
In the UK, sales increased by 73% to £58 million, while in the US sales rose 15% to £15.1 million. Sales in Europe climbed by 17% to £25.8 million.
Adjusted earnings before interest, tax, depreciation and amortisation were up 35% to £34 million over the half year.
Fever Tree’s shares were up by more than 11% after the announcement.
Tim Warrillow, chief executive of Fever Tree, said: “The first half of 2018 has been one of major progress for Fever Tree.
“The group delivered a strong performance, most notably in the UK, as we continue to drive and lead the evolution of the wider mixer category.
“Furthermore, our relationships with key customers and spirits partners mean we are increasingly well-positioned as the growing move to premiumisation and long-mixed drinks continues to develop across the globe.”
Fever Tree is a true British success story Russ Mould, AJ Bell
The drinks firm has moved to take control of its operations in the US, and now manages its own marketing, sales and distribution over the continent.
It has now signed a distribution deal with Southern Glazer’s Wine and Spirits, the largest wine and spirits distribution firm in the US, to help it to deliver Fever Tree’s products across 29 US states.
Fever Tree has also been launching new products, with the addition of a low-calorie range in the UK.
Russ Mould, investment director at AJ Bell, said: “Fever Tree is a true British success story, showing how it is possible to take a seemingly commoditised product, introduce a higher-quality version and shake up a market where the previous leader, Schweppes, had its eye off the ball and didn’t have sufficient barriers to block new competition.
“It is very refreshing to see management not get carried away by their success and declare they are going to smash sales records around the world, such as you might expect from someone in its strong situation.”