Proactiveinvestors United Kingdom Fevertree Drinks https://www.proactiveinvestors.co.uk Proactiveinvestors United Kingdom Fevertree Drinks RSS feed en Sun, 16 Jun 2019 14:05:35 +0100 http://blogs.law.harvard.edu/tech/rss Genera CMS action@proactiveinvestors.com (Proactiveinvestors) action@proactiveinvestors.com (Proactiveinvestors) <![CDATA[RNS press release - Total Voting Rights ]]> https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20190604163526_14098472/ Tue, 04 Jun 2019 16:35:26 +0100 https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20190604163526_14098472/ <![CDATA[RNS press release - Result of Annual General Meeting ]]> https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20190524171113_14087557/ Fri, 24 May 2019 17:11:13 +0100 https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20190524171113_14087557/ <![CDATA[News - Fevertree Drinks warns it will be tricky to top last year’s summer performance ]]> https://www.proactiveinvestors.co.uk/companies/news/220911/fevertree-drinks-warns-it-will-be-tricky-to-top-last-years-summer-performance-220911.html Fevertree Drinks PLC (LON:FEVR) is wary of the tough comparatives it faces this summer, after sales of its posh tonic waters soared during last year’s heatwave.

The £3bn company, one of the biggest on AIM, is known for surprising the market with better-than-expected trading, but it didn’t lift guidance today.

READ: Fevertree rediscovers its fizz after initial post-results dip

It said 2018 was a year of “significant progress” and that it has enjoyed an “encouraging” start to 2019, leaving bosses “confident” of meeting full-year forecasts.

“The beginning of 2019 has seen further encouraging operational progress across our key international regions as the group continues to invest in widening and deepening its distribution networks,” said chairman Bill Ronald ahead of today’s annual general meeting.

“Whilst we are mindful of last year's exceptional summer trading performance in the UK, we remain confident in achieving board expectations for the full year ending 31 December 2019.”

Fevertree shares were down 0.5% at the opening bell on Friday to 2,825p.

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Fri, 24 May 2019 08:05:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/220911/fevertree-drinks-warns-it-will-be-tricky-to-top-last-years-summer-performance-220911.html
<![CDATA[RNS press release - AGM Statement ]]> https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20190524070005_14086029/ Fri, 24 May 2019 07:00:05 +0100 https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20190524070005_14086029/ <![CDATA[RNS press release - Block Admission Application ]]> https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20190523070009_14084404/ Thu, 23 May 2019 07:00:09 +0100 https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20190523070009_14084404/ <![CDATA[RNS press release - Block Listing Return ]]> https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20190501084448_14058974/ Wed, 01 May 2019 08:44:48 +0100 https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20190501084448_14058974/ <![CDATA[RNS press release - 2018 Annual Report and Notice of AGM ]]> https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20190423070008_14047513/ Tue, 23 Apr 2019 07:00:08 +0100 https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20190423070008_14047513/ <![CDATA[RNS press release - Notification of Major Holdings ]]> https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20190403170338_14027966/ Wed, 03 Apr 2019 17:03:38 +0100 https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20190403170338_14027966/ <![CDATA[RNS press release - Notification of Major Holdings ]]> https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20190329083116_14021044/ Fri, 29 Mar 2019 08:31:16 +0000 https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20190329083116_14021044/ <![CDATA[News - A tale of two margins: How the UK’s sugar tax affected Fevertree and AG Barr ]]> https://www.proactiveinvestors.co.uk/companies/news/217249/a-tale-of-two-margins-how-the-uks-sugar-tax-affected-fevertree-and-ag-barr-217249.html Looking at the final results of AIM 100 fizzy drinks maker Fevertree Drinks PLC (LON:FEVR) and its FTSE 250 rival AG Barr PLC (LON:BAG) on Tuesday, the figures provide a reflection on how preparing for the UK’s sugar tax paid off for one and a lack thereof caused the other to suffer.

The levy, which came into effect on 5 April 2018, aims to cut down on childhood obesity rates in the UK by upping the price on drinks with high sugar content (with the added bonus of netting a tidy £240mln each year for the Treasury).

The rates are 24p per litre of drink that contained 8 grams of sugar per 100ml, and 18p per litre containing 5-8 grams per 100ml.

Tax makes Fever go flat

Posh tonic maker Fevertree, which also sells fancy ginger beers, lemonades and a Madagascan cola, suffered some hefty damage from the sugar tax.

The levy piled pressure on the company’s gross margins in 2018, which shrank to 51.8% from 53.5% the year before, a drop of 170 basis points.

The hefty cut to its margins overshadowed what seemed by other metrics to be a strong year, with revenue up 40% in 2018 to £237.4mln and a hike in the final dividend to 10.28p per share from 7.64p in 2017.

Given that the firm’s standard tonic water has about 7.1g of sugar per 100ml, its cola around 9g, and its ginger beer 9.2g, a large segment of its product range is still in the firing line for the 24p per litre price increase.

READ: Fevertree falls flat as UK sugar tax and surging bottle costs dent margins

As the UK is also Fevertree’s largest market, the margin pain looks set to continue unless it can diversify its sales away from the tax.

Although with its US business struggling to grow sales, this could take longer than initially thought.

“The problem is that demand for premium tonics hasn’t yet caught on across the pond, so the group is relying on the sale of its ginger ales. The market place for these kinds of mixers is crowded, so it will be harder to replicate the stratospheric increase in demand for tonic we saw in the UK,” said Sophie Lund-Yates, equity analyst at Hargreaves Lansdown.

Given its stratospheric rise to prominence over the last three years, with shares up over 300%, the tax man seems to have added a bittersweet taste to Fevertree’s success.

Barr fizzed on new formula

By contrast, AG Barr reacted relatively swiftly to the new levy before its implementation by reformulating the recipe for Irn-Bru, its flagship soft drink, in January 2018.

While news of the changing formula was accompanied by some punters stockpiling the unchanged recipe to preserve the “original” taste, the new formula brought Irn-Bru down to less than 5g per 100ml, effectively dodging the tax.

@jack_obrien @milesofgray @DailyZeitgeist
A lot of people are upset that Irn Bru is planning to change its formula because of sugar tax laws in the UK. pic.twitter.com/4DiJ3alTCI

— He Whom (@Mammon_Inficius) February 20, 2019

Despite the initial bemoaning of its new recipe, punters also seemed to take to it, with the company reporting that since changing the formula, regular Irn-Bru had upped its volume share of the UK carbonates market by 4.2%.

READ: AG Barr loses some fizz as it eyes “more challenging” market in 2019 amid regulation and changing consumer dynamics

While the group’s gross margins did decline around 43 basis points in the year to 43.9%, less than half of Fevertree's own fall, it was mainly due to inward investment as well as carbon dioxide shortages and a hit to its operating conditions in the summer due to “unprecedented” demand amid 2018’s heatwave, not from the sugar tax.

If the company had refrained from ducking the levy, its margins could have ended up looking a little more like Fevertree’s.

In mid-afternoon trading on Tuesday, Fevertree shares were up 2.4% at 2,602p while AG Barr was up 1.5% at 789p.

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Tue, 26 Mar 2019 14:08:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/217249/a-tale-of-two-margins-how-the-uks-sugar-tax-affected-fevertree-and-ag-barr-217249.html
<![CDATA[News - Fevertree Drinks rediscovers its fizz after initial post-results dip ]]> https://www.proactiveinvestors.co.uk/companies/news/217207/fevertree-drinks-rediscovers-its-fizz-after-initial-post-results-dip-217207.html Fevertree Drinks PLC (LON:FEVR) shares rediscovered their fizz on Tuesday afternoon, recovering from their morning losses to become one of the best-performing stocks on London’s AIM market.

The posh tonic maker, which also sells fancy ginger beers, lemonades and a Madagascan cola, went flat in early deals on Tuesday, but it rallied in the afternoon session to sit 5.3% higher at 2,677p shortly before the close.

READ: Fevertree pops higher as it resumes normal service

Revenue grew 40% in 2018 to £237.4mln (2017: £170.2mln), helped by an “exceptional” performance in the UK over summer.

The UK is Fevertree’s home and largest market and it was once again the star performer, with annual sales up 53% year-on-year.

Rest of World sales, which include Australia and Canada, grew 48% year-year-year, while sales in Europe climbed 24%.

US growth slows

Analysts expect the US to be the AIM firm’s longer-term sales driver though, and Fevertree took a step in that direction last summer when it opened an office in New York.

But sales growth slowed substantially across the Pond to 21% as the transition led to some related distribution losses.

Profit margins decreased to 51.8% (2017: 53.5%), reflecting the introduction of the UK sugar tax as well as rising raw material costs, most notably the glass used to make its bottles.

As a result, adjusted underlying earnings (EBITDA) rose by a third to £78.6mln (2017: £58.7mln). Pre-tax profits rose by a similar percentage to £61.8mln (2017: £45.5mln).

Fevertree hiked its final dividend to 10.28p per share (2017: 7.64p), bringing its total payout for the year to 14.50p (2017: 10.65p).

Net cash stood at £83.6mln at the year-end, although this included a £6.1mln loan that has since been paid off.

Steady start to 2019

“2018 was a significant year for Fever-Tree. In the UK, we strengthened our position as the leading mixer brand in the Off Trade,” said chief executive and co-founder Tim Warrillow.

“In the US, we successfully established our own operations and the business made real progress in deepening and widening its presence in multiple European regions.

“As the world's leading premium mixer brand with a strengthening global distribution network we are well set to drive the international opportunity as the move towards the premium long mixed drink continues to gather momentum around the world.

He added: “At this early stage in the year, the group is trading in line with board expectations and we remain excited about the size of the opportunity that lies ahead.”

US market key to justify valuation

“The US market is key for future growth potential and for underpinning its rather lofty multiples,” said Markets.com analyst Neil Wilson.

“Growth in the US needs to come reasonably soon, but we should be confident that Fevertree can continue to benefit from the premiumisation of the drinks business and can replicate in the US with dark spirits what it did with tonic water in the UK.

“The deal with SGWS signed last year is a good sign – we should expect growth rates to pick up in the coming quarters.”

--Adjusts for share price movement and adds analyst comment--

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Tue, 26 Mar 2019 08:45:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/217207/fevertree-drinks-rediscovers-its-fizz-after-initial-post-results-dip-217207.html
<![CDATA[RNS press release - Preliminary Results ]]> https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20190326070011_14015147/ Tue, 26 Mar 2019 07:00:11 +0000 https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20190326070011_14015147/ <![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20190212174718_13967060/ Tue, 12 Feb 2019 17:47:18 +0000 https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20190212174718_13967060/ <![CDATA[News - Fevertree shares pop higher as tonic maker resumes normal service ]]> https://www.proactiveinvestors.co.uk/companies/news/213238/fevertree-shares-pop-higher-as-tonic-maker-resumes-normal-service-213238.html 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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Thu, 24 Jan 2019 08:52:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/213238/fevertree-shares-pop-higher-as-tonic-maker-resumes-normal-service-213238.html
<![CDATA[RNS press release - Trading Update ]]> https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20190124070003_13944812/ Thu, 24 Jan 2019 07:00:03 +0000 https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20190124070003_13944812/ <![CDATA[RNS press release - Notification of Trading Update ]]> https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20190111070004_13931245/ Fri, 11 Jan 2019 07:00:04 +0000 https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20190111070004_13931245/ <![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20181207070006_13895080/ Fri, 07 Dec 2018 07:00:06 +0000 https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20181207070006_13895080/ <![CDATA[News - Blue-chip analysts tell investors to plough into Fevertree after recent sell-off ]]> https://www.proactiveinvestors.co.uk/companies/news/210309/blue-chip-analysts-tell-investors-to-plough-into-fevertree-after-recent-sell-off-210309.html Fevertree Drinks PLC (LON:FEVR) shares perked up on Friday after analysts at two major investment banks published bullish research notes, soothing investors who have had to nurse chunky losses in recent weeks.

The posh tonic maker was noticeably silent in November, a month when investors have become used to seeing a trading update telling them that full-year results will be well ahead of forecasts.

READ: Deutsche Bank expects Fevertree to lose its fizz in coming years

That, coupled with the wider equities sell-off, which has rocked stock markets of late, has seen Fevertree shares plunge from almost 4,000p in September to 2,400p now, wiping out all of 2018’s gains.

Morgan Stanley analyst Richard Felton reckons there is “still plenty of scope” for results to come in ahead of forecasts though.

Jefferies’ Ed Mundy also remains a fan and thinks the recent slump “offers an entry point into one of the most attractive growth stories in European beverages”, noting that management’s tone remains “confident”.

According to data from consumer insights group Nielsen, Fevertree’s growth has been slowing in recent months, although given the rapid growth seen over the past few years, Munday says a normalisation of growth “was always expected”.

His calculations suggest sales of Fevertree Drinks in the UK – which accounts for half of all revenue – could grow by up to 40-50% in the second half of this year.

The US will take over the reins as the AIM company’s growth driver over the next year or two and Mundy highlights the “good conditions” currently in place across the pond for Fevertree to enjoy a successful Stateside expansion.

The analyst repeated his blockbuster 4,300p price target and ‘buy’ recommendation.

Fevertree shares added 2.4% in early afternoon trading to 2,397p, still some way off September’s highs.

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Fri, 30 Nov 2018 13:11:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/210309/blue-chip-analysts-tell-investors-to-plough-into-fevertree-after-recent-sell-off-210309.html
<![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20181101153448_13852053/ Thu, 01 Nov 2018 15:34:48 +0000 https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20181101153448_13852053/ <![CDATA[RNS press release - Block Listing Return ]]> https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20181031101649_13849342/ Wed, 31 Oct 2018 10:16:49 +0000 https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20181031101649_13849342/ <![CDATA[RNS press release - Appointment of Nomad and Joint Broker ]]> https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20181031070007_13848557/ Wed, 31 Oct 2018 07:00:07 +0000 https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20181031070007_13848557/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20181019081211_13835311/ Fri, 19 Oct 2018 08:12:11 +0100 https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20181019081211_13835311/ <![CDATA[News - Deutsche Bank expects Fevertree’s growth to lose its fizz in coming years ]]> https://www.proactiveinvestors.co.uk/companies/news/207281/deutsche-bank-expects-fevertrees-growth-to-lose-its-fizz-in-coming-years-207281.html Deutsche Bank reckons there is still “plenty of headroom for growth” for Fevertree Drinks PLC (LON:FEVR), although it has its doubts as to whether the posh tonic maker can sustain the kind of growth it has achieved in recent years.

The £3bn AIM company has enjoyed a strong run since it listed in November 2014 on the back of consistent outperformance, sending its stock jumping more than 20-fold over that time.

READ: Fevertree founder sells off another slug of shares

But shares have lost almost a quarter of their value over the past month, with City traders stating that highly-priced, high growth stocks like Fevertree are the first to be dumped during a global market sell-off.

Deutsche analysts think the sell-off has brought the stock down to earth and closer to where it should be, kicking off their coverage with a ‘hold’ recommendation and 3,000p price target, marginally above the current price of 2,905p.

“Following the recent sell-off, we believe the valuation now better reflects Fever- Tree's growth prospects and believe the shares trade close to fair value,” read Wednesday’s note to clients.

“No doubt, there is still plenty of headroom for growth in the premium mixers market and for Fever-Tree, as it expands internationally. However, after 4 years of c60% sales and 70% EBIT CAGR (2014-18e), we expect the pace of growth to slow over the medium term.”

Deutsche is now guiding for sales to grow at an average of 17% and underlying earnings at 15% over the next four years.

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Wed, 17 Oct 2018 11:03:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/207281/deutsche-bank-expects-fevertrees-growth-to-lose-its-fizz-in-coming-years-207281.html
<![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20181016171604_13831221/ Tue, 16 Oct 2018 17:16:04 +0100 https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20181016171604_13831221/ <![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20181011070009_13824328/ Thu, 11 Oct 2018 07:00:09 +0100 https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20181011070009_13824328/ <![CDATA[RNS press release - Total Voting Rights ]]> https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20180831104005_13774681/ Fri, 31 Aug 2018 10:40:05 +0100 https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20180831104005_13774681/ <![CDATA[News - Fevertree Drinks shares go flat after company’s co-founders sell off more stock to satisfy institutional demand ]]> https://www.proactiveinvestors.co.uk/companies/news/202372/fevertree-drinks-shares-go-flat-after-companys-co-founders-sell-off-more-stock-to-satisfy-institutional-demand-202372.html Fevertree Drinks PLC (LON:FEVR) saw its shares go flat on Tuesday after the mixer drinks company’s co-founders, Charles Rolls and Tim Warrillow - its non-executive deputy chairman and chief executive officer respectively – sold off more stock.

After the market close on Monday, the AIM-listed firm said the two founders intended to sell in aggregate approximately 2mln ordinary shares in the company via an accelerated bookbuild placing in response to demand from institutional investors.

READ: Fevertree fizzes to fresh all-time high as it upgrades full-year guidance once again

However, due to significant institutional demand, the selling shareholders actually disposed of 3mln Fevertree shares, representing approximately 2.6% of the group’s issued share capital.

Fevertree said the shares were sold at a price of 3,450p each in the placing, which was managed by Investec Bank acting as sole bookrunner.

In lunchtime trading, Fevertree shares were 2.8% lower at 3,578p.

The company added that it was not a party to the placing and, therefore, will not receive any proceeds.

It noted that Rolls sold 2mln ordinary shares, taking his holding down to around 8.2mln shares or about 7.1% of the company, while Warrillow sold 1mln ordinary shares, reducing his holding to about 5.4mln shares or approximately a 4.7% stake.

Back in March, Rolls had sold 3mln Fevertree shares – double the initial intention for a 1.5mln share sale – via a placing to investors at a price of 2,750p per share, again due to significant institutional demand.

Fevertree shares fizzed up to a fresh all-time high at the end of July as the posh tonic maker upgraded its full-year guidance once again following a jump in first-half revenue and earnings.

For the six months ended June 30 2018, Fevertree reported a 45% leap in revenue to £104.2mln (H1 17: £71.9mln), while adjusted underlying earnings (EBITDA) climbed by 35% to £34.0mln (H1 17: £25.2mln).

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Tue, 07 Aug 2018 12:17:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/202372/fevertree-drinks-shares-go-flat-after-companys-co-founders-sell-off-more-stock-to-satisfy-institutional-demand-202372.html
<![CDATA[RNS press release - Result of Placing in Fevertree Drinks PLC ]]> https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20180807075717_13746186/ Tue, 07 Aug 2018 07:57:17 +0100 https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20180807075717_13746186/ <![CDATA[RNS press release - Proposed placing of shares in Fevertree Drinks PLC ]]> https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20180806164303_13745490/ Mon, 06 Aug 2018 16:43:03 +0100 https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20180806164303_13745490/ <![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20180806150019_13745359/ Mon, 06 Aug 2018 15:00:19 +0100 https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20180806150019_13745359/ <![CDATA[News - How Fevertree usurped Britvic and Schweppes to pop to the top of the UK tonic market ]]> https://www.proactiveinvestors.co.uk/companies/news/201447/how-fevertree-usurped-britvic-and-schweppes-to-pop-to-the-top-of-the-uk-tonic-market-201447.html When Fevertree Drinks PLC (LON:FEVR) listed in November 2014, it was valued at just over £150mln.

Around that time, its peer – notice the absence of the word rival – Britvic PLC (LON:BVIC) had just seen its shares reach all-time highs, valuing the then 169-year-old firm at just shy of £2bn.

Fast forward to today and Fevertree is worth more than £4bn while Britvic’s market cap growth has only just about bettered inflation.

READ: Fevertree fizzes to all-time high after latest results

Few would have seen this coming, including the boards of Britvic and Schweppes, the two previously dominant players in the tonic market.

Schweppes can almost be forgiven: it was by far the largest maker of tonic around the world and so its strategy was more about protecting its market share – ‘if it ain’t broke, don’t fix it’.

Britvic, on the other hand, had the chance to be a bit riskier, something it should have been doing if it had any genuine intention of usurping Keurig, Dr Pepper-owned Schweppes.

With those two giants of the tonic game resting on their laurels, Fevertree swept in with its simple philosophy: if three-quarters of your drink is the mixer, “mix with the best”.

Gin renaissance

Schweppes and Britvic continued to almost dismiss the newbie for several years despite their now-rival’s rapid growth, failing to bring out their own premium versions and ward off any threat from Fevertree.

Their approach seemed to be that tonic wasn’t the key part of a drink, that people weren’t prepared to pay more for a better mixer and that they’d developed their product as much as was worthwhile.

By this point, Fevertree was seeing sales soar in the UK, riding the wave of gin’s renaissance. It also began to attract the fancy bars and restaurants which didn’t want to be seen as stocking the ‘cheap’ options.

It was when Fevertree surpassed the £1bn mark that incumbent giants got their acts together. Britvic “refreshed” its tonic water and other mixers in late 2016, while Schweppes brought out its own premium mixers under the ‘1783’ name the following year.

Schweppes used to be the byword for tonic, not anymore

Truth be told, they were too late to the party. The shift towards ‘premiumisation’ had already happened and Fevertree was the now go-to brand in the world of fancy mixers.

The company, which was only founded in 2005, is now the most popular mixer brand in UK supermarkets, accounting for almost half of all off-trade tonic sales.

Even in its latest interim results after several years of strong growth, Fevertree’s sales still jumped by 45% and it is targeting America next, where the estimated market size is several times that of the UK.

How the big boys must regret underestimating the competition and misreading consumer trends.

Moreover, Fevertree, which is now worth twice as much as Britvic, could’ve been taken out for a relative pittance only a couple of years ago. They must regret that even more.

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Tue, 24 Jul 2018 12:55:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/201447/how-fevertree-usurped-britvic-and-schweppes-to-pop-to-the-top-of-the-uk-tonic-market-201447.html
<![CDATA[News - Fevertree fizzes to fresh all-time high as it upgrades full-year guidance once again ]]> https://www.proactiveinvestors.co.uk/companies/news/201420/fevertree-fizzes-to-fresh-all-time-high-as-it-upgrades-full-year-guidance-once-again-201420.html Fevertree Drinks PLC (LON:FEVR) fizzed to a fresh all-time high at the opening bell on Tuesday as the posh tonic maker returned to its usual ways with a full-year guidance upgrade.

The Chelsea-based company, one of the biggest on AIM, has made a habit of telling investors that full-year results will be better than expected, although it disappointed investors in May’s trading update when it failed to do so.

READ: Jefferies cites US potential as it hikes Fevertree price target up to £40

That seems to be a blip though, with Fevertree, which also makes a Madagascan Cola and Sicilian Lemonade, claiming that full-year numbers will be “comfortably ahead” of forecasts.

Shares popped above 3,900p shortly after the bell, although they retreated to 3,680p in late afternoon trading - still a healthy 6.4% gain for the day.

For the six months ended June 30 2018, Fevertree reported a 45% jump in revenue to £104.2mln (H1 17: £71.9mln). Adjusted underlying earnings (EBITDA) climbed 35% to £34.0mln (H1 17: £25.2mln).

Those numbers prompted a 40% hike in the interim dividend, which now stands at 4.22p (H1 17: 3.01p). With more than £62mln of cash in the bank, Fevertree can easily afford that.

Much of the growth came from the £4bn firm’s home (and most mature) UK market, where sales rose 73% to £58.0mln (H1 17: £33.6mln).

US management team in place

Of much interest to shareholders will be the performance in the US, where a lot of growth is expected over the coming years as Fevertree’s establishes itself in one of the world’s largest drinks markets, estimated to be seven times that of the UK.

To try to tap into this, the company has recently opened a US headquarters in New York, having previously relied on importer Brands of Britain to sell its tonics, lemonades and ginger beers in the US.

Sales across the pond rose 15% to £15.1mln (H1 17: £13.2mln) in the first half but the market will be looking for those figures to soar over the next year or two as the new direct management team gets it feet under the table.

Potentially helping it to meet those lofty expectations will be the on-trade (bars and restaurants) distribution deal it signed with SGWS recently – the largest distributor of wines and spirits in North America.

‘Major progress’

“The first half of 2018 has been one of major progress for Fever-Tree,” said chief executive and co-founder Tim Warrillow.

“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.

“We have successfully launched our wholly-owned US operations with a talented team recruited and now in place. The exclusive distribution agreement with SGWS, the largest North American wine and spirits distribution company, is a significant endorsement and provides a strong platform for Fever-Tree US in 2019 and beyond.”

He concluded: “Given the strong performance in the first half of the year, the board anticipates that the outcome for the full year will be comfortably ahead of its expectations.”

--Updates for share price--

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Tue, 24 Jul 2018 08:37:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/201420/fevertree-fizzes-to-fresh-all-time-high-as-it-upgrades-full-year-guidance-once-again-201420.html
<![CDATA[RNS press release - Interim Results ]]> https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20180724070009_13728372/ Tue, 24 Jul 2018 07:00:09 +0100 https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20180724070009_13728372/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20180711070005_13713050/ Wed, 11 Jul 2018 07:00:05 +0100 https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20180711070005_13713050/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20180702174334_13702522/ Mon, 02 Jul 2018 17:43:34 +0100 https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20180702174334_13702522/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20180702174117_13702519/ Mon, 02 Jul 2018 17:41:17 +0100 https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20180702174117_13702519/ <![CDATA[News - Jefferies cites significant US potential as it hikes price target for Fevertree up to £40 ]]> https://www.proactiveinvestors.co.uk/companies/news/199393/jefferies-cites-significant-us-potential-as-it-hikes-price-target-for-fevertree-up-to-40-199393.html US investment bank Jefferies has hiked its price target for Fevertree Drinks PLC (LON:FEVR) by a third, citing the huge potential for the posh tonic maker in the US.

The majority of Fevertree’s sales come from the UK, but the potential market across the pond is estimated to be seven times larger.

READ: Fevertree fails to upgrade expectations for first time since listing

To try to tap into this, the Chelsea-based firm has recently opened a US headquarters in New York, having previously relied on importer Brands of Britain to sell its tonics, lemonades and ginger beers in the US.

With the new direct management team now in place, analyst Edward Mundy reckons Fevertree is well-placed to take advantage of the nascent premium mixers market over there.

“Our proprietary bartender survey reinforces our confidence in the US growth opportunity,” wrote Mundy in a note.

“Conditions are in place for the growth of the premium mixers category over the med-term with (a) increasing focus on long drink mixability (b) appetite for premium gin/spirits to be mixed with premium mixers (c) consumer willingness to pay extra for premium mixers (d) sufficient physical space behind the bar to stock premium mixers.”

Not much US competition

Fevertree, particularly in the beginning of its journey, has faced very little competition from other premium drinks makers in the UK.

Mundy believes the market conditions are also “favourable” in the US, with the merger of Keurig and Dr Pepper Snapple – which owns Schweppes and Canada Dry – making for a “benign” trading environment.

He notes that Coca-Cola Company (NYSE:KO), a big threat to any drinks maker, doesn’t have a “sizeable” premium mixer brand either.

“The opportunity for premium mixers in the US is the largest growth opportunity for FEVR over the med-term given (a) the size of the US (7x larger than UK) (b) a market that is rapidly premiumising (c) significant disconnect between premium spirits and a commoditised mixers category (d) favourable industry backdrop,” added Mundy.

Price target up to £40 but could go higher

The analyst has upped his price target by £10 to £40, reflecting this “med-term opportunity” and accounting for some of the risk of tapping into a new market.

That said, Mundy reckons that shares in the AIM-listed firm could surpass £60 if it is able to “partially emulate” its success here in the UK.

Fevertree shares are broadly flat on Friday morning at £33.50. They were sold at 134p when the company floated on the junior market back in November 2014.

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Fri, 22 Jun 2018 09:29:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/199393/jefferies-cites-significant-us-potential-as-it-hikes-price-target-for-fevertree-up-to-40-199393.html
<![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20180522094445_13650210/ Tue, 22 May 2018 09:44:45 +0100 https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20180522094445_13650210/ <![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20180518130130_13647272/ Fri, 18 May 2018 13:01:30 +0100 https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20180518130130_13647272/ <![CDATA[RNS press release - Result of Annual General Meeting ]]> https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20180517131543_13645538/ Thu, 17 May 2018 13:15:43 +0100 https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20180517131543_13645538/ <![CDATA[News - Fevertree fails to upgrade expectations in a trading update for first time since listing ]]> https://www.proactiveinvestors.co.uk/companies/news/197181/fevertree-fails-to-upgrade-expectations-in-a-trading-update-for-first-time-since-listing-197181.html For the first time since joining AIM, Fevertree Drinks PLC (LON:FEVR) has failed to upgrade its outlook for the year in a trading statement.

In an update ahead of its annual general meeting later today, the posh tonic maker said it is “trading in-line with market expectations”.

READ: Fevertree trading “in-line”

With still a sizeable chunk of the year left, most companies would be content with that position, but not Fevertree, where investors are more accustomed to trading being “materially” or “comfortably” ahead.

Analysts are expecting the London-based company to report earnings per share of around 43.5p this year, giving the stock a 2018 price-to-earnings ratio of more than 60.

Given that the average company will have a PE ratio of somewhere between 15 and 25, it is obvious there is a lot of future growth baked into the share price.

That’s why shares are down 7% today to £27.12; good is not good enough for Fevertree when the market is expecting great.

The share price had also been climbing into today’s announcement, with investors clearly backing the drinks maker to post something better than ‘just alright’.

Attention switches to US now

The UK continues to be the key sales driver, but the company will be looking to the US – where the estimated market is several times the size of that in its home country – for future growth.

So far, things have been a bit slow across the pond, but a US-based team is now in place and ready to take over the reins on June 1.

Investors will be hoping a permanent presence over in the States will help to drive sales in a potentially huge and lucrative market, for which it has been developing new products such as its Madagascan Cola and Spiced Orange Ginger Ale drinks.

“We remain of the view that there is a significant opportunity for Fevertree with the growth engine now more likely to be in the US,” wrote Shore Capital analyst Phil Carroll in a note to clients.

Time to invest?

He adds that today's falls could be a chance for long-term holders to snap up some more of the stock.

“The lack of upgrades to market expectations may put a dampener on the share price today, especially considering it has been rising into today’s statement.

“For some investors this may present an opportunity when considering the long-term opportunity in Fevertree if it executes its broader ambitions.”

Board remains confident

At the company’s AGM in the City this morning, chairman Bill Ronald reassured investors that despite not upgrading forecasts, “the board remains very confident” in the company’s outlook.

The 62-year-old urged investors not to “over-interpret” what was written in the update.

Unsurprisingly, several investors asked about what’s going on over in the US, given that Fevertree is taking direct management of its distribution network and marketing efforts in two weeks’ time.

Co-founder and chief executive Tim Warrillow said the firm – which has seen its share price soar more than 1,500% since its debut on AIM just over three years ago – had put in years of “painstaking but successful” ground work across the pond.

He added that Fevertree is yet to roll out its Madagascan Cola in the States while it builds the brand’s reputation with its flagship tonic waters, but it would look to do so next year.

The delay may surprise investors, given the sheer size of the US market for dark liquors, but the demand for clear liquor is far from weak: Warrillow estimated that the nascent US gin market is still twice the size of the UK’s, while vodka is even more popular.

-- Updates for share price and AGM notes --

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Thu, 17 May 2018 10:17:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/197181/fevertree-fails-to-upgrade-expectations-in-a-trading-update-for-first-time-since-listing-197181.html
<![CDATA[News - Fevertree Drinks loses fizz as in-line trading news disappoints investors ]]> https://www.proactiveinvestors.co.uk/companies/news/197172/fevertree-drinks-loses-fizz-as-in-line-trading-news-disappoints-investors-197172.html Fevertree Drinks PLC (LON:FEVR) shares lost some of their fizz on Thursday after the mixer drinks firm said current trading is in line with market expectations, disappointing investors who have been used to more upbeat comments from the fast-growing group.

In mid-morning trading, Fevertree shares were down 5.6% at 2,761p.

READ: Fevertree Drinks shares sink as co-founder offloads bigger-than-expected stake

In a statement to be delivered at today’s annual general meeting, Bill Ronald, chairman of the AIM-listed firm said: “The Group's performance in the year to date has been encouraging and at this early stage in the year we are trading in line with market expectations for the full year ending 31 December 2018.”

The chairman added that the first four months of 2018 has seen further positive progress, most notably in the UK where - as market leader - the company is well positioned as the wider mixer category continues to evolve.

He also noted that the transition to wholly-owned operations in the US is continuing to plan.

“We have made excellent progress, with the Fever-Tree US team now in place ahead of taking direct management of our distribution network and marketing effort on 1 June 2018,“ Ronald said.

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Thu, 17 May 2018 08:08:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/197172/fevertree-drinks-loses-fizz-as-in-line-trading-news-disappoints-investors-197172.html
<![CDATA[RNS press release - Appointment of Non-Executive Director ]]> https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20180517070009_13644399/ Thu, 17 May 2018 07:00:09 +0100 https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20180517070009_13644399/ <![CDATA[RNS press release - AGM Statement ]]> https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20180517070006_13644359/ Thu, 17 May 2018 07:00:06 +0100 https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20180517070006_13644359/ <![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20180409170632_13597542/ Mon, 09 Apr 2018 17:06:32 +0100 https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20180409170632_13597542/ <![CDATA[RNS press release - Directorate Change ]]> https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20180405160001_13593885/ Thu, 05 Apr 2018 16:00:01 +0100 https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20180405160001_13593885/ <![CDATA[RNS press release - Total Voting Rights ]]> https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20180329083538_13586483/ Thu, 29 Mar 2018 08:35:38 +0100 https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20180329083538_13586483/ <![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20180328070007_13584102/ Wed, 28 Mar 2018 07:00:07 +0100 https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20180328070007_13584102/ <![CDATA[RNS press release - 2017 Annual Report and Notice of AGM ]]> https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20180326142531_13581551/ Mon, 26 Mar 2018 14:25:31 +0100 https://www.proactiveinvestors.co.uk/companies/rns/10637/LSE20180326142531_13581551/ <![CDATA[News - Fevertree Drinks shares sink as co-founder offloads bigger-than-expected stake ]]> https://www.proactiveinvestors.co.uk/companies/news/193694/fevertree-drinks-shares-sink-as-co-founder-offloads-bigger-than-expected-stake-193694.html Fevertree Drinks PLC (LON:FEVR) shares lost their fizz on Friday after one of its founders sold a 2.6% stake in the premium tonic water maker.

Deputy chairman Charles Rolls offloaded almost double the number of shares he originally intended to sell after receiving significant demand from institutional investors.  

READ: Fever-Tree's 2017 earnings and sales jump but shares fall flat on profit-taking

Shares dropped 5.4% to 2,796p in morning trading.

Rolls, who is co-founder with chief executive Tim Warillow, now owns a 8.6% stake in the company.

Since the company began trading on the stock market in late 2014, its shares have surged by more than 1,000%. In the past 12 months, shares have jumped by more than 90%.

Growing demand for gin and tonic boosted its 2017 results with adjusted underlying earnings (EBITDA) rising 64% to £58.7mln and revenues increasing 66% to £170.2mln.

In the annual results statement last Tuesday, Warrillow said the company has had an "encouraging start to 2018 and remain confident that we are increasingly well positioned to deliver further growth across the business".

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Fri, 23 Mar 2018 09:09:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/193694/fevertree-drinks-shares-sink-as-co-founder-offloads-bigger-than-expected-stake-193694.html