Fever-Tree fizzes on back of strong supermarket sales

FinanceFMCG

Sales have sparkled at Fever-Tree after the mixer maker was boosted by better-than-expected retail trade.

The drinks firm reported revenue growth of 36 per cent for the six months to June, compared with the same period last year.

It said its off-trade sales ,which cover sales from supermarkets and other retailers ,exceeded its expectations to stay above pre-pandemic levels.

Meanwhile, the company said that on-trade sales, which cover hospitality, performed “well” as markets continue their recovery.

READ MORE: UK food and drink exports to EU fall by £2bn

Fever-Tree also hailed continued momentum in its US business and reported successful product launches, including its new premium soda range in the UK.

However, it warned that profit margins have been “significantly impacted” by ongoing global logistics disruption and cost pressures.

It said elevated transatlantic freight charges and US storage costs have particularly weighed on profitability.

The company said it has taken action to mitigate this cost pressure but expects it to continue to affect the firm throughout the rest of the financial year and into 2022.

“We believe the group is emerging from the pandemic in a very strong position,” chief executive Tim Warrillow said.

“Throughout the last 18 months we have maintained our long-term focus and therefore continued to invest in our team, our innovation and the brand, which was enabled by the financial strength and operational agility of the business.

“While some material impacts of the pandemic remain, the business is increasingly well placed to deliver our plans for long-term growth.”

Nicholas Hyett, equity analyst at Hargreaves Lansdown added: “The reopening of bars, and continued strong sales in shops and supermarkets, has kept Fever-Tree’s sales fizzing forwards.

“Rapid growth in the US and Europe is particularly welcome – since the group already has nearly 40 per cent of the UK mixers market and squeezing extra juice from the domestic lemon is going to be challenging.”

Shares in the company were 2.9 per cent higher at 2199p in early trading on Wednesday.

with PA Wires

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