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Fevertree Drinks PLC - Interim Results

RNS Number : 0894U
Fevertree Drinks PLC
27 July 2015
 

27th July 2015

 

Fevertree Drinks plc ("Fever-Tree")

 

Interim Results

 

Fever-Tree, the world's leading supplier of premium carbonated mixers for alcoholic spirits by retail sales value, today announces its Interim Results for the period ended 30 June 2015.

 

Financial Highlights:

 

·      Revenue up 62% to £24.1m (H1 2014: £14.9m)

·      Gross margin of 50.5% (H1 2014: 51.1%)

·      Adjusted EBITDA1 up 68% to £7.2m (H1 2014: £4.3m)

·      Strong balance sheet with net cash at period end of £7.9m

·      Diluted EPS of 4.44 pence

·      Interim dividend of 0.78 pence per share

 

Operational Highlights:

 

·      New UK Off-Trade listing in Morrisons

·      Continued strong growth in Ginger Beer sales in USA

·      Launch of the new 150ml can format

 

Tim Warrillow, CEO of Fever-Tree said:

 

"We are delighted to report that the Group's strong performance throughout 2014 has continued into the first half of 2015. We achieved a 62% increase in revenue with all four of our territories continuing to perform strongly and the results were underpinned by solidly maintained margins and a strong balance sheet.

 

The Group remains ideally positioned to benefit from the ongoing global trend to greater premiumisation and look to the future with confidence as we continue to deepen our penetration in our existing markets whilst exploring new market opportunities."  

 

1 Adjusted EBITDA is earnings before interest, tax, depreciation, amortisation, exceptional items and finance costs

 

For further information:

 

Fevertree Drinks plc

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

Tim Warrillow, Co-founder and CEO


Charles Rolls, Co-founder and Executive Deputy Chairman


Andy Branchflower, Finance Director




FTI Consulting - Financial PR

+44 (0)20 3727 1000

Jonathon Brill

[email protected]

Oliver Winters


Tom Hufton




Investec Bank plc - Nominated Adviser and Broker

+44 (0)20 7597 4000

Garry Levin


Duncan Williamson


Matt Lewis


David Anderson




 

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 approximately 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 70 per cent of the Group's sales were derived from outside of the UK in financial year 2014, 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 2014 has continued in the first half of 2015. During the period we achieved revenue of £24.1m, representing growth of 62% on the first half of 2014.

 

Despite some net forex headwinds, our gross profit margin has been maintained at 50.5% (2014: 51.1%) and the Group achieved an adjusted EBITDA of £7.2m in the first half of the year, generating diluted earnings per share of 4.44p. We begin the second half of 2015 with a strong balance sheet and net cash of £7.9m.

 

Results

 


Half year ended 30 June 2015

Half year ended 30 June 2014

Movement


£m

£m

%





Revenue

24.1

14.9

62%





Gross Profit

12.1

7.6

60%

Gross Profit %

50.5%

51.1%






Adjusted EBITDA

7.2

4.3

68%

Adjusted EBITDA %

29.9%

28.9%






Diluted EPS

4.44

16.792


Interim Dividend

0.78p

n/a






 

2 Calculation based on pre-IPO structure, see notes to the financials

 

 

Territory review

Revenue by territory


Half year ended 30 June 2015

Half year ended 30 June 2014

Movement

Share of revenue


£m

£m

%

%






UK

7.6

4.7

62%

32%

USA

5.8

3.5

69%

24%

Europe

9.4

5.8

61%

39%

RoW

1.3

0.9

42%

5%






Total

24.1

14.9

62%

100%






 

UK

 

In our largest market, the Group achieved sales growth of 62%, with strong performance in both the On-Trade and Off-Trade, although this result was accentuated by certain customers building inventory in June in advance of the summer season. In the first half of 2015 we increased investment in the On-Trade sales team and achieved some notable new listings. In the Off-Trade we also gained a listing with Morrisons. Our new tonic and naturally light tonic in 150ml can format was launched in Sainsbury's at the very end of June, in Waitrose in July and was soon followed by an exclusive listing in British Airways First Class and Club World cabins as well as lounges throughout the UK.

 

USA

 

The strong momentum from 2014 has continued, with revenue growth of 69% in the period, which represented growth of 54% when adjusted for the strengthening US dollar. The "Moscow Mule" trend continued to drive growth in Ginger Beer sales in the first half of the year although growth across the Tonic flavours is also notable reflecting the rise in popularity of a premium gin and tonic in the region. 

 

Europe

 

Revenue growth of 61% was achieved in the period, which represented growth of 77% when adjusted for the weakening Euro.  Whilst this strong result was aided by certain importers taking large orders in June in advance of the summer season, growth continues to be underpinned by the strong performance seen in 2014 across many western European countries which has continued into the first half of 2015.

 

RoW

 

Sales to countries within the RoW region have grown by 42% and the Group has added dedicated resource to take advantage of opportunities in Asia Pacific and Latin America.

 

Financial

Gross margin and operating expenses

 

Gross margin of 50.5% in the period represents a decrease from the 51.1% achieved in the first half of 2014. The main driver of this decrease was the weakening Euro, although this has been partially offset by the impact of the strengthening Dollar, as well as product cost and logistics efficiencies.

 

Underlying operating expenses1 decreased as a proportion of revenue to 20.4% during the period (2014: 22.3%), which has improved the EBITDA margin to 29.9% (2014: 28.9%).  For the current period underlying operating expenses include an incremental £0.4m unrealised gain made on outstanding forward exchange contracts at June 2015.  Disregarding this £0.4m unrealised gain, the level of other underlying operating expenses is comparable to the prior period at 22.2% of revenue (2014: 22.3%).

 

Cash position and working capital

 

The Group had net cash of £7.9m at period end, with £14.0m of cash at the bank offset by £6.1m of bank loans. Adjusted operating cash flow in the period is strong at 83% of adjusted EBITDA, albeit this conversion rate is influenced by seasonality and is expected to return to levels seen historically as we progress through 2015.

 

Dividend

Reflecting the Board's continued confidence in the outlook, the Directors are pleased to declare an interim dividend of 0.78 pence per share. The dividend will be paid on 4 September 2015, to shareholders on the register on 14 August 2015.

 

Outlook

 

We are encouraged by our performance in the first half of the year and the Board remains positive about the outlook for 2015. 

 

 

__________________

 

1Underlying operating expenses are defined as administrative expenses less LTIP charges, depreciation, amortisation and exceptional items

 

 

Tim Warrillow

Chief Executive

 

 

 

 



 

Consolidated statement of comprehensive income

For the six months ended 30 June 2015



Six months ended

Six months ended

Year ended


30 June

30 June

31 December



2015

2014

2014


Note

£

£

£






Revenue

2

24,069,646

14,868,371

34,691,034






Cost of sales


(11,921,618)

(7,264,829)

(17,028,408)











Gross profit


12,148,028

7,603,542

17,662,626






Administrative expenses


(5,366,114)

(3,862,770)

(9,574,793)






Adjusted EBITDA*


7,196,899

4,291,027

10,005,110

Depreciation


(54,985)

(35,481)

(84,263)

Amortisation


(360,000)

(357,041)

(717,041)

Exceptional items


-

(157,733)

(1,115,973)






Operating profit


6,781,914

3,740,772

8,087,833






Finance costs





Finance income


5,023

5,167

9,222

Finance expense


(193,767)

(2,619,209)

(5,575,813)











Profit before tax


6,593,170

1,126,730

2,521,242






Tax expense


(1,435,758)

(471,615)

(1,224,831)






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


5,157,412

 

655,115

1,296,411











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





Basic (pence)

4

4.48

16.79

1.54

Diluted (pence)

4

4.44

16.79

1.54






 

* Adjusted EBITDA is earnings before interest, tax, depreciation, amortisation, exceptional items and finance costs

 

 

 



 

Consolidated statement of financial position

30 June 2015

 



30 June

30 June

31 December



2015

2014

2014



£

£

£

Non-current assets





Property, plant and equipment


411,164

330,369

351,699

Intangible assets


44,210,655

44,930,655

44,570,655

Total non-current assets


44,621,819

45,261,024

44,922,354






Current assets





Inventories


5,391,968

3,310,848

4,346,168

Trade and other receivables


10,764,817

7,586,737

8,390,202

Derivative financial instruments


458,054

42,124

11,051

Cash and cash equivalents


13,975,803

3,936,707

9,583,313

Total current assets


30,590,642

14,876,416

22,330,734






Total assets


75,212,461

60,137,440

67,253,088






Current liabilities





Trade and other payables


6,983,416

3,932,790

4,387,498

Derivatives


-

495

-

Loans and borrowings


634,784

291,033

364,445

Corporation tax liability


1,413,894

782,128

658,604

Total current liabilities


9,032,094

5,006,446

5,410,547






Non-current liabilities





Loans and borrowings


5,461,339

53,365,413

5,895,828

Deferred tax liability


2,607,661

2,584,218

2,679,661

Total non-current liabilities


8,069,000

55,949,631

8,575,489






Total liabilities


17,101,094

60,956,077

13,986,036






Net assets / (liabilities)


58,111,367

(818,637)

53,267,052






Equity attributable to equity holders of the company





Share capital


288,102

281,321

288,102

Share premium


53,521,386

186,796

53,521,386

Capital Redemption Reserve


93,189

-

93,189

Retained earnings


4,208,690

(1,286,754)

(635,625)






Total equity


58,111,367

(818,637)

53,267,052

 

 

 



 

Consolidated statement of cash flows

For the six months ended 30 June 2015


Period ended

Period ended

Year ended

30 June

30 June

   31 December


2015

2014

2014


£


£

Operating activities




Profit before tax

6,593,170

1,126,730

2,521,242

Finance expense

193,767

2,619,209

5,575,813

Finance income

(5,023)

(5,167)

(9,222)

Depreciation of property, plant and equipment

54,985

35,481

84,263

Amortisation of intangible assets

360,000

357,041

717,041

Share based payments

32,626

-

9,833


7,229,525

4,133,294

8,898,970





(Increase)/Decrease in trade and other receivables

(2,829,534)

(1,590,352)

(2,401,730)

(Increase)/Decrease in inventories

(1,045,800)

(769,075)

(1,804,395)

Increase/(Decrease) in trade and other payables

2,595,918

1,031,312

1,482,143


(1,279,416)

(1,328,115)

(2,723,982)

Cash generated from operations before exceptional items

5,950,109

2,962,912

7,290,961

Exceptional items

-

(157,733)

(1,115,973)

Cash generated from operations

5,950,109

2,805,179

6,174,988





Income taxes paid

(752,469)

(538,825)

(1,320,121)





Net cash flows from operating activities

5,197,640

2,266,354

4,854,867





Investing activities




Purchase of property, plant and equipment

(114,450)

(197,610)

(267,723)





Net cash used in investing activities

(114,450)

(197,610)

(267,723)





Financing activities




Interest (paid)

(152,893)

(1,315,223)

(1,459,545)

Interest received

7,916

5,168

9,222

Loans repaid

(200,000)

(175,000)

(350,000)

Loan note repaid

-

-

(49,991,087)

Shares issued (net of fees allocated against equity)

-

-

53,434,561

Dividends paid

(345,723)

-

-





Net cash used in financing activities

(690,700)

(1,485,055)

1,643,151





Net increase in cash and cash equivalents

4,392,490

583,689

6,230,295





Cash and cash equivalents at beginning of period

9,583,313

3,353,018

3,353,018





Cash and cash equivalents at end of period

13,975,803

3,936,707

9,583,313



Notes to the consolidated financial statements

For the six months ended 30 June 2015

 

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 2014 Report and Accounts and that are expected to be applied in the Report and Accounts of the year ended 31 December 2015. There are new or revised standards or interpretations that apply to the period beginning 1 January 2015 but they do not have a material effect on the financial statements for the period ended 30 June 2015.

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 2014 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


2015

2014

2014


£

£

£





United Kingdom

7,590,177

4,691,241

11,138,177

United States of America

5,809,368

3,446,272

8,286,535

Europe

9,408,768

5,844,416

13,438,075

Rest of the World

1,261,333

886,442

1,828,247


24,069,646

14,868,371

34,691,034

 

3.  Dividends

The interim dividend of 0.78p will be paid on 4 September 2015 to shareholders on the register on 14 August 2015.

 

4.  Earnings Per Share


Six months ended

Six months ended

Year ended

30 June

30 June

31 December


2015

2014

2014


£

£

£

Profit




Profit used in calculating basic and diluted EPS

5,157,412

655,115

1,296,411





Number of shares




Weighted average number of shares for the purpose of

basic earnings per share

115,240,896

 

3,900,979

 

83,934,200

Weighted average number of employee share options outstanding

842,531

-

133,882

Weighted average number of shares for the purpose of

diluted earnings per share

116,083,427

3,900,979

84,068,082





Basic earnings/(loss) per share (pence)

4.48

16.79

1.54





Diluted earnings/(loss) per share (pence)

4.44

16.79

1.54

 

 

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
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Quick facts: Fevertree Drinks

Price: 1911

Market: AIM
Market Cap: £2.22 billion
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