Fevertree Drinks PLC (LON:FEVR) announced a higher interim dividend as it expressed confidence for the second half of the year.
Assuming there are no further significant lockdowns in its regions, the AIM-listed tonic specialist expects revenues for the year to December to be between £235mln and £243mln, compared to £260mln posted in 2019.
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The fizzy drinks producer said it is in the early stage of expanding away from gin mixers and into newer markets “with significant potential” and remains committed to investing £60mln of its underlying operating expenditure.
The dividend was raised 4% to 5.41p per share as the company ended the six months to June 30 debt-free and with £136mln in the bank.
Interim revenues were 11% down to £104mln, with strong off-trade performance, which comprises shops and supermarkets, mitigating lower trade in the on-trade division, which includes bars and restaurants.
Sales in the UK and Europe were down 20% and 29% respectively, while the US and the rest of the world rose 39% and 2%. Profit before tax slipped 38% to £21mln.
"The pandemic has unscrewed a fresh fizz in supermarket sales for Fevertree as lockdowns forced people out of pubs and restaurants, with off trade sales for the company exceeding expectations across the world," analysts at Hargreaves Lansdown noted.
"Lockdown cocktail hour clearly proved a tonic for drinkers during lockdown, which helped attract new customers to the premium brand."
Shares shed 3% to 2,048p on Tuesday morning.
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