logo-loader
RNS
viewFevertree Drinks

Fevertree Drinks PLC - Interim Results

RNS Number : 9444L
Fevertree Drinks PLC
25 July 2017
 

 

25th July 2017

 

Fevertree Drinks plc ("Fever-Tree")

 

Interim Results

 

Fever-Tree, the world's leading supplier of premium carbonated mixers today announces its Interim Results for the period ended 30 June 2017.

 

Financial Highlights:

 

·      Revenue up 77% to £71.9m (H1 2016: £40.6m)

·      Gross margin of 54.5% (H1 2016: 54.8%)

·      Adjusted EBITDA1 up 102% to £25.2m (H1 2016: £12.4m)

·      Strong balance sheet with net cash at period end of £40.5m (H1 2016: £18.6m)

·      Diluted EPS up 106% to 16.72 pence (H1 2016: 8.12 pence)

·      Interim dividend up 95%% to 3.01 pence per share (H1 2016: 1.54 pence)

 

Operational Highlights:

 

·      Strong growth across all regions, channels and flavours

·      Exceptional growth of 113% in the UK as distribution gains continue to drive performance

·      Fever-Tree has driven 99% of the value growth in the entire UK mixer category within retail in the last 12 months and now holds a 30% value share (IRI)

·      Expanded distribution of our 150ml can format continues to drive significant incremental growth at UK retail, with new flavours introduced and a listing across the Virgin Atlantic fleet from July 2017

·      Continued new retail distribution wins globally; new listings, and increased stores and product ranging within existing retail customers;

·      New bottling partner established in Spain to service Southern European markets initially

 

Tim Warrillow, CEO of Fever-Tree said:

 

"We are delighted to report another strong performance in the first half of 2017, continuing the momentum seen in 2016.  We achieved growth in all our regions, driven by further distribution gains and underlying rate of sales growth as the two key trends of premiumisation and mixability continue to gather pace globally. 

 

"We continue to invest and improve our infrastructure, relationships with key suppliers and customers as well as adding to our senior team. The strength of our brand and first mover advantage means we are well positioned as the opportunity for premium mixers continues to gather momentum across our key markets."

 

Given the strong performance in the first half of the year, the Board anticipates that the outcome for the full year will be materially ahead of its expectations."

 

1 Adjusted EBITDA is earnings before interest, tax, depreciation, amortisation, share based payment charges and finance costs

 

 

For further information:

 

Fevertree Drinks plc

c/o FTI +44 (0)20 3727 1000

Tim Warrillow, Co-founder and CEO


Andy Branchflower, Finance Director




FTI Consulting - Financial PR

+44 (0)20 3727 1000

Jonathon Brill

[email protected]

Oliver Winters


Georgina Goodhew




Investec Bank plc - Nominated Adviser and Broker

+44 (0)20 7597 4000

Garry Levin


Matt Lewis


Alex Wright


David Anderson




Updated Imagery:

 

Updated Company imagery can be accessed here - http://www.fever-tree.com/corporate/image-library.

 

Notes to Editors:

 

Fever-Tree is the world's leading supplier of premium carbonated mixers for alcoholic spirits by retail sales value, with distribution to over 50 countries worldwide. Based in the UK, the brand was launched in 2005 to provide high quality mixers which could cater to the growing demand for premium spirits, in particular gin, but also increasingly for vodka, rum and whisky. The Company now sells a range of carbonated mixers to hotels, restaurants, bars and cafes ("On-Trade") as well as selected retail outlets ("Off-Trade"). Approximately 56 per cent of the Group's sales were derived from outside of the UK in financial year 2016, with key overseas markets in the US and Europe.

 

Chief Executive's report

I am delighted to report that the Group's strong performance in 2016 has continued in the first half of 2017. During the period we achieved revenue of £71.9m, representing growth of 77% on the first half of 2016.

 

Whilst gross margin of 54.5% represents a slight retraction from the 54.8% achieved in the first half of 2016, the Group achieved an adjusted EBITDA of £25.2m in the first half of the year (H1 2016: £12.4m) at an improved adjusted EBITDA margin of 35.0% (H1 2016: 30.7%).  This performance resulted in diluted earnings per share in the six month period of 16.72p (H1 2016: 8.12p), growth of 106% on the prior period. We begin the second half of 2017 with a strong balance sheet and net cash of £40.5m (H1 2016: £18.6m).

 

Results

 


Half year ended 30 June 2017

Half year ended 30 June 2016

Reported Movement

Constant Currency Movement


£m

£m

%

%






Revenue

71.9

40.6

77%

70%






Gross Profit

39.2

22.3

76%

66%

Gross Profit margin

54.5%

54.8%








Adjusted EBITDA

25.2

12.4

102%

85%

Adjusted EBITDA margin

 

35.0%

30.7%








Diluted EPS

16.72p

8.12p

106%


Interim Dividend

3.01p

1.54p

95%







 

 

Territory review

Revenue by territory


Half year ended 30 June 2017

Half year ended 30 June 2016

Movement

Share of revenue


£m

£m

%

%






UK

33.6

15.8

113%

47%

Continental Europe

22.0

13.4

64%

31%

USA

13.2

9.2

43%

18%

RoW

3.1

2.2

45%

4%






Total

71.9

40.6

77%

100%






 

UK

 

The UK remains the Group's largest market, contributing 47% of Group sales in the period, with revenue growth of 113% compared to the first half of 2016.

 

Sales growth was strong across both On-Trade and Off-Trade channels and across flavours and formats. The performance in the Off-Trade channel in particular, where 50% of UK sales are now made, was exceptional in the first half of 2017.  This was helped by momentum from the distribution gains made through 2016, the continued strong performance of our 150ml can format, as well as new distribution gains made in the first half of 2017.  The Off-Trade sales growth was also assisted by very strong June sales in advance of July promotions at key retailers.  Notwithstanding the period performance, we are mindful that stronger comparators will be lapped as we progress through the second half of 2017, especially with respect to the exceptionally strong Christmas trading achieved in 2016.

 

We have seen the continued success of our 150ml can format, launched in June 2015, which now represents 40% of the UK Off-Trade sales mix with a strong underlying rate of sale growth and an increasing distribution footprint.  The 150ml range includes four tonic flavours and has recently been extended to include ginger ale and premium lemonade cans specifically for the July 2017 listing across Virgin Atlantic's entire fleet.

 

Fever-Tree drove 99% of the value growth in the entire UK mixer category within retail in the 12 months to June 2017 and now holds a 30% value share (IRI).  This increasing level of premium penetration continues to outstrip the 16.5% proposed as the target value share at maturity for the premium segment of the mixer category (EY, September 2014) and again illustrates the extent to which Fever-Tree is rapidly transforming the UK mixer category. 

 

In the On-Trade channel, continued strong revenue growth was achieved, driven by underlying rate of sale growth as well as an expanding distribution footprint.  The Group works increasingly closely with key wholesale and managed group partners, strengthening relationships that help us to drive our first mover advantage in the market. 

 

We have continued to build on our partnerships with both the established premium gin brands and the increasing number of local craft gin brands, enabling Fever-Tree to play a key role alongside these brands in driving the premium gin and tonic trend across the UK.  We also have begun to seed our new expanded range of dark spirits mixers across a small number of high end On-Trade bars this summer and have seen increased distribution of our Cola at retail in the first half of 2017.  We are increasingly optimistic about the significant opportunity in premium dark spirits mixers, both within the UK and across our International markets.

 

Continental Europe

 

Revenue growth of 64% was achieved in the period, which represented growth of 53% on a constant currency basis.  Sales growth was achieved across all territories; however, the acceleration in the period reflects a notably strong performance across a number of key Western European territories.  Tonic flavours continue to play a dominant role in these markets, with our Aromatic Tonic performing well since its introduction in the first half of the year, reflecting the gin and tonic trend that is increasing in momentum across Western Europe. It is also notable that Ginger Beer is increasing in prominence in the sales mix, particularly in Italy where just as we have seen in the USA, the Moscow Mule is increasing in popularity. 

 

The strong sales performance in the first half of the year was assisted by the phasing of pre-summer sell-in to our importers in key territories, which resulted in an exceptional sales performance in June 2017 and means certain territories begin the second half of 2017 well stocked.  Therefore, we expect reported growth rates will not be as strong in the second half of 2017.  However, with an expanding retail footprint across the region and an increasingly strong position in many key territories the Group remains very well positioned to capture the significant premium mixer opportunity in Continental Europe.

 

 

USA

 

Revenue growth of 43% in the period represented growth of 29% on a constant currency basis.  Off-Trade listings achieved in the second half of 2016 are performing well and we are seeing consistent strong growth in both Tonic and Ginger Beer flavours as the premium gin and tonic and Moscow Mule continue to increase in popularity.  The US premium mixer opportunity is still at a relatively early stage and as the first mover and number one premium mixer brand the Group remains well positioned for future growth.

 

RoW

 

Sales growth of 45% was achieved within the RoW region which continues to represent strong potential for the Group in the medium to longer term.  Alongside Australia and Canada we are also seeing increasing scale and a platform for growth in South Africa and Colombia.

 

Financial and Operational

Gross margin and operating expenses

 

Gross margin of 54.5% represents a slight retraction from the 54.8% achieved in the first half of 2016, where as expected, the investment in our new bespoke glass bottle introduced the second half of 2016 had an impact on underlying glass costs.  The impact of this investment has been largely offset by the net benefit to the Group of the stronger US dollar and Euro during the first half of 2017 compared to the first half of 2016.

 

Underlying operating expenses1 reduced as a proportion of revenue to 19.6% during the period (H1 2016: 24.1%), and as a result, EBITDA margin achieved in the period improved notably to 35.0% (H1 2016: 30.7%).  It should be noted that the prior period contained a £1.4m unrealised loss made on outstanding forward exchange contracts which skewed the level of underlying operating spend.  Therefore disregarding foreign exchange-related gains and losses recognised in operating expenditure, the level of underlying spend is more comparable in both periods at 20.0% of revenue (H1 2016: 21.5%).  Due to phasing of spend during the year it is expected that underlying operating expenditure in the second half of 2017 will be more in line with the budgeted level of 22% of revenue.

 

Cash position and working capital

 

The Group had net cash of £40.5m at period end (H1 2016: £18.6m), with £46.6m of cash at the bank offset by £6.1m of bank loans. Adjusted operating cash flow in the period was strong at 92% of adjusted EBITDA (H1 2016: 95%).  As in prior years, this conversion rate is influenced by seasonality and is expected to return to levels seen historically as we progress through the second half of 2017.

 

Operational

 

The Group has contracted with and begun bottling with a new European bottling partner, based in Spain.  It is expected that initially this site will bottle for territories in the Southern European region.  This development increases our bottling footprint to five partners across the UK and Europe, further improving the Group's bottling capacity and contingency and is in line with our stated strategy to bottle closer to our key regions and territories as appropriate over time.

 

We continue to add to the senior management team with a Global Strategy Director, a Commercial Strategy Director and an Innovation Director scheduled to begin in the second half of the year with a remit to focus on deepening both distribution and product range within our existing territories.

 

Dividend

 

Reflecting the Board's continued confidence in the outlook, the Directors are pleased to declare an interim dividend of 3.01 pence per share (H1 2016: 1.54 pence per share). The dividend will be paid on 8 September 2017, to shareholders on the register on 11 August 2017.



Outlook

 

Given the strong performance in the first half of the year, the Board anticipates that the outcome for the full year will be materially ahead of its expectations.

 

 

Tim Warrillow

Chief Executive

 

Consolidated statement of comprehensive income

For the six months ended 30 June 2017       



Six months ended

Six months ended

Year ended


30 June

30 June

31 December



2017

2016

2016


Note

£

£

£






Revenue

2

71,941,208

40,582,364

102,237,354






Cost of sales


(32,718,694)

(18,328,176)

(45,815,263)











Gross profit


39,222,514

22,254,188

56,422,091






Administrative expenses


(15,155,700)

(10,383,071)

(22,049,714)






Adjusted EBITDA*


25,150,252

12,441,007

35,838,989

Depreciation


(182,857)

(105,288)

(249,318)

Amortisation


(360,000)

(360,000)

(720,000)

Share based payment charges


(540,581)

(104,602)

(497,294)






Operating profit


24,066,814

11,871,117

34,372,377






Finance costs





Finance income


35,845

37,299

79,821

Finance expense


(27,027)

(111,794)

(150,318)











Profit before tax


24,075,632

11,796,622

34,301,880






Tax expense


(4,631,859)

(2,366,492)

(6,804,222)






Profit for the year/period and comprehensive income attributable to equity holders of the parent company


19,443,773

9,430,130

27,497,658











Earnings per share for profit attributable to the owners of the parent during the year





Basic (pence)

4

16.87

8.18

23.86

Diluted (pence)

4

16.72

8.12

23.70






 

* Adjusted EBITDA is earnings before interest, tax, depreciation, amortisation, share based payment charges and finance costs

 

Consolidated statement of financial position

30 June 2017

 



30 June

30 June

31 December



2017

2016

2016



£

£

£

Non-current assets





Property, plant and equipment


1,252,708

770,496

1,163,103

Intangible assets


42,770,655

43,490,655

43,130,655

Total non-current assets


44,023,363

44,261,151

44,293,758






Current assets





Inventories


10,078,203

5,905,188

10,523,754

Trade and other receivables


38,892,367

20,684,370

30,392,649

Cash and cash equivalents


46,579,833

24,705,172

32,963,225

Total current assets


95,550,403

51,294,729

73,879,628






Total assets


139,573,766

95,555,880

118,173,386






Current liabilities





Trade and other payables


23,052,900

10,674,805

16,128,246

Derivative financial instruments


152,901

1,680,564

981,071

Corporation tax liability


4,593,637

2,284,925

3,761,308

Total current liabilities


27,799,438

14,640,294

20,870,625






Non-current liabilities





Loans and borrowings


6,068,993

6,089,369

6,081,932

Deferred tax liability


2,156,081

2,518,959

2,228,081

Total non-current liabilities


8,225,074

8,608,328

8,310,013






Total liabilities


36,024,512

23,248,622

 29,180,638






Net assets


103,549,254

72,307,258

88,992,748






Equity attributable to equity holders of the company





Share capital


288,102

288,102

288,102

Share premium


53,521,386

53,521,386

53,521,386

Capital Redemption Reserve


93,189

93,189

93,189

Retained earnings


49,646,577

18,404,581

35,090,071






Total equity


103,549,254

72,307,258

88,992,748

 

 

Consolidated statement of cash flows

For the six months ended 30 June 2017


Period ended

Period ended

Year ended

30 June

30 June

31 December


2017

2016

2016


£

£

£

Operating activities




Profit before tax

24,075,632

11,796,622

34,301,880

Finance expense

27,027

111,794

150,318

Finance income

(35,845)

(37,299)

(79,821)

Depreciation of property, plant and equipment

182,857

105,288

249,318

Amortisation of intangible assets

360,000

360,000

720,000

Share based payments

540,581

104,602

497,294


25,150,252

12,441,007

35,838,989





(Increase)/Decrease in trade and other receivables

(8,499,718)

(3,888,215)

(13,596,495)

(Increase)/Decrease in inventories

445,551

471,485

(4,147,081)

Increase/(Decrease) in trade and other payables

6,096,484

2,831,140

7,585,088


(1,957,683)

(585,590)

(10,158,488)





Cash generated from operations

23,192,569

11,855,417

25,680,501





Income taxes paid

(3,884,473)

(1,787,986)

(5,047,888)





Net cash flows from operating activities

19,308,096

10,067,431

20,632,613





Investing activities




Purchase of property, plant and equipment

(272,460)

(286,372)

(823,011)





Net cash used in investing activities

(272,460)

(286,372)

(823,011)





Financing activities




Interest (paid)

(27,027)

(103,669)

(141,972)

Interest received

35,845

37,299

79,821

Dividends paid

(5,427,846)

(2,650,541)

(4,425,250)





Net cash used in financing activities

(5,419,028)

(2,716,911)

(4,487,401)





Net increase in cash and cash equivalents

13,616,608

7,064,148

15,322,201





Cash and cash equivalents at beginning of period

32,963,225

17,641,024

17,641,024





Cash and cash equivalents at end of period

46,579,833

24,705,172

32,963,225









 

Notes to the consolidated financial information

For the six months ended 30 June 2017

 

1.  Basis for preparation

 

The interim financial statements have been prepared in accordance with the recognition and measurement requirements of International Financial Reporting Standards (IFRS) and IFRIC interpretations issued by the International Accounting Standards Board (IASB) adopted by the European Union.

 

The accounts have been prepared in accordance with accounting policies that are consistent with the December 2016 Report and Accounts and that are expected to be applied in the Report and Accounts of the year ended 31 December 2017. There are new or revised standards or interpretations that apply to the period beginning 1 January 2017 but they do not have a material effect on the financial statements for the period ended 30 June 2017.

 

This report is not prepared in accordance with IAS 34, which is not mandatory.  The financial information does not constitute statutory accounts within the meaning of section 435 of the Companies Act 2006. Statutory accounts for Fevertree Drinks Plc for the year ended 31 December 2016 have been delivered to the Registrar of Companies. The auditors' report on those accounts was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under Section 498 (2) or (3) of the Companies Act 2006.

 

2.  Revenue

 

An analysis of turnover by geographical market is given below:


Six months ended

Six months ended

Year ended

30 June

30 June

31 December


2017

2016

2016


£

£

£





United Kingdom

33,632,291

15,797,208

44,685,328

Continental Europe

21,964,265

13,367,379

31,114,109

United States of America

13,180,960

9,237,070

21,273,333

Rest of the World

3,163,692

2,180,707

5,164,584


71,941,208

40,582,364

102,237,354

 

3.  Dividends

 

The interim dividend of 3.01 pence per share will be paid on 8 September 2017 to shareholders on the register on 11 August 2017.

 

4.  Earnings Per Share


Six months ended

Six months ended

Year ended

30 June

30 June

31 December


2017

2016

2016


£

£

£

Profit




Profit used in calculating basic and diluted EPS

19,443,773

9,430,130

27,497,658





Number of shares




Weighted average number of shares for the purpose of

basic earnings per share

115,240,896

115,240,896

115,240,896

Weighted average number of employee share options outstanding

1,023,539

938,112

793,673

Weighted average number of shares for the purpose of

diluted earnings per share

116,264,435

116,179,008

116,034,569





Basic earnings per share (pence)

16.87

8.18

23.86





Diluted earnings per share (pence)

16.72

8.12

23.70

 



1 Underlying operating expenses are defined as administrative expenses less depreciation, amortisation and share based payment charges


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
IR QZLFLDDFLBBV

Quick facts: Fevertree Drinks

Price: 1911

Market: AIM
Market Cap: £2.22 billion
Follow

Create your account: sign up and get ahead on news and events

NO INVESTMENT ADVICE

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...

FOR OUR FULL DISCLAIMER CLICK HERE