Fevertree Drinks PLC’s (LON:FEVR) shares jumped despite the posh mixers maker warning investors that full-year revenue will be lower than expected.
Total sales will be between £266mln and £268mln, representing year-on-year growth of 12-13%, with margin expectations unchanged, the AIM-listed company said in an update on Wednesday.
READ: Fevertree sell-off is 'overdone and misplaced', says ShoreCap
The slowdown is due to weak consumer spending in the UK, its most mature market, not helped by the comparison with “exceptional” results recorded summer last year.
Investors chose to overlook this news as Fevertree is making a splash in the US and Europe, with the former expected to deliver 34% growth as the group plans to establish a long-term presence and recently signed up a new bottling partner.
Similarly, Europe and the rest of the world are expected to report 19% and 35% full-year growth respectively, with a “growing significance” in Canada and Australia.
Analysts at Liberum said “the UK simply is not as important on a ten-year view” and the market should focus on international traction where “the opportunity is huge”.
“Fevertree has scope to quadruple sales overnight in some of its key cities in the US… Americans haven't woken up to what they are mixing their drink with while the structural premiumisation trends are firmly intact.”
The broker expects international success to drive a 16% free cash flow increase over the next ten years.
Shares jumped 9% to 2,028.5p on Wednesday morning.