There's no suppressing the fizz over at upmarket tonic maker Fevertree Drinks (FEVR) as more companies line up to stock the brand. A new deal with Marks and Spencer (MKS) no doubt helped during the bumper Christmas period, while new 150ml canned versions of the premium mixers have gone down well in British Airways' first and business class cabins. These partnerships helped UK sales leap 84 per cent last year. Supermarket stockists are also displaying the brand in store areas other than the standard drinks aisle; a distinction that chief executive Tim Warrillow insists is "usually the preserve of big brands".
Fevertree continues to successfully preserve its capital flows through the outsourcing of its manufacturing and distribution operations. The bulk of its domestic bottling is still completed with one UK bottler, but it now works with a second local firm for "contingency purposes" and has separate process contracts in place with Netherlands- and Germany-based operators. Finance director Andy Branchflower said the group hoped to start bottling in the US and other European locations soon. The outsourced business model is inherently flexible and places less strain on the capital budget, but given Fevertree's continued expansion management will need to ensure that there is sufficient third-party manufacturing capacity.
House broker Investec Securities expects adjusted pre-tax profit of £20.5m in 2016, leading to EPS of 14.1p, up from £17.5m and 12.1p in 2015.
| FEVERTREE (FEVR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 570p | MARKET VALUE: | £657m | |
| TOUCH: | 568-574p | 12-MONTH HIGH: | 702p | LOW: 210p |
| DIVIDEND YIELD: | 0.5% | PE RATIO: | 49 | |
| NET ASSET VALUE: | 57p* | NET CASH: | £11.6m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011** | 11.8 | 3.2 | n/a | nil |
| 2012** | 16.2 | 3.6 | n/a | nil |
| 2013† | 20.6 | -1.4 | -3.1 | nil |
| 2014 | 34.7 | 2.5 | 1.5 | 0.3 |
| 2015 | 59.3 | 16.8 | 11.6 | 3.1 |
| % change | +71 | +565 | +651 | +927 |
Ex-div: 7 Apr Payment: 6 May *Includes intangible assets of £43.8m, or 38p a share **Pre-IPO figures †Trading period from 7 March 2013 following February 2013 IPO | ||||
