Fever-Tree upgrades forecasts as half year revenue rises 45%

Mixer brand Fever-Tree has upgraded is full year forecasts after seeing revenue rise by 45% to £104.2 million in the six months to 30 June 2018, compared to £71.9 million achieved in the same period last year.

Fever-Tree is cashing in on a particularly profitable start to the year, with revenues rising by 45% to £104.2 million in the six months to 30 June 2018, compared to £71.9 million in the first half of 2017. Adjusted earnings also increased, up by 35% to £34 million, while the interim dividend rose by 40% to 4.22p per share.

As a result of this performance, CEO Tim Warrillow said the company’s board “anticipates that the outcome for the full year will be comfortably ahead of its expectations”.

Having increased its predictions for the company’s full year revenue by around £15 million, Investec now estimates that revenue will total £220 million come the end of 2018.

After releasing its results yesterday (24 July), Fever-Tree reached a record value of £4.5 billion, just four years after its first stock market flotation in 2014.

Fever-Tree’s performance has undeniably been aided by the unrelenting growth of gin in the UK, with sales reaching £1.5 billion or roughly 55 million bottles in the 12 months to the end of March 2018, according to the latest figures from the Wine and Spirit Trade Association (WSTA.)

The company has recently opened a new office in the US, making the transition to wholly-owned operations on 1 June this year, with the team now directly managing its marketing, sales and distribution efforts in the country.

Fever-Tree has also signed a new distribution agreement in Spain with Grupo Damm. In January, it announced that it had surpassed rival Schweppes by value in the UK after data from the US market research company IRI revealed that, from the 13 weeks to 31 December 2017, Fever-Tree was the number one mixed brand by value in the UK off-trade with a 39% market share compared Schweppes’ 31%.

In terms of new product development, in March, Fever-Tree extended its low calorie range with eight new expressions as part of its ‘refreshingly light’ range. In addition it has released a number of limited edition tonics including a clementine and cinnamon expression for Christmas last year and a cucumber tonic water this summer, both of which are UK retail exclusives.

2018 marked the first of its three-year sponsorship of the annual grass court tournament at The Queen’s Club in June, the company first large-scale, televised national sponsorship.

Tim Warrillow, CEO of Fever-Tree commented: “The first half of 2018 has been one of major progress for Fever-Tree. 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. Furthermore, our relationships with key customers and spirits partners mean we are increasingly well positioned as the growing move to premiumisation and long mixed drinks continues to develop across the globe.

“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”.