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Fevertree sweats on opening hour

The premium mixer's business model is showing its worth, but pubs remain shut
April 22, 2020

Tim Warrillow, co-founder and chief executive of Fevertree Drinks (FEVR), sounds like someone who had bought a round of drinks just as the publican called time – a mixture of relief and regret. While justifiably pointing to the group’s low fixed cost base in his results round-up, he also conceded that on-trade sales, or lack thereof, pose something of a problem given they represent 45 per cent of the group total.

1,449p

In 2019, increased admin and depreciation costs meant that reported profits pulled back slightly despite a 10 per cent increase in sales. As foreshadowed, the top-line improvement reflects continued expansion into overseas markets, set against a slight decline in domestic sales.

Since then, sales in the UK have come under pressure due to off-trade retail, though orders have picked up significantly as punters loaded up on mixers once the lockdown became a reality. That reality also means that logistics are proving a bugbear for businesses, so the group has taken action to ensure that its UK inventory is held across separate locations within its supply chain partner's estate.

FEVERTREE (FEVR)   
ORD PRICE:1,449pMARKET VALUE:£ 1.68bn
TOUCH:1,447-1,453p12-MONTH HIGH:3,290pLOW: 888p
DIVIDEND YIELD:1.0%PE RATIO:29
NET ASSET VALUE:195p*NET CASH:£128m
Year to 31 DecTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201559.316.811.63.08
201610234.323.96.25
201717056.439.510.65
201823775.653.414.50
201926172.550.515.08
% change+10-4-5+4
Ex-div:14 May   
Payment:12 Jun   
*Includes intangible assets of £41m, or 35p a share