- Shares down 10% over past year, up 34% in 2023
- Tough year ahead due to cost pressures
- Growth of 13%-18% expected for 2024
Shares in posh tonics maker Fevertree Drinks (FEVR:AIM) fell over 2% in morning trading to £13.96 as investors become nervous of the company’s ongoing inflation-busting cost pressures.
Fevertree’s share price fall comes as no surprise for investors, over the past year its shares have been on a roller-coaster ride – reaching a 52-week low of 804p, in contrast to its 52-week high of £16.54.
STRONG START IN THE UK
The upmarket mixer brand recorded ‘its highest ever value share’ in the on-trade during the first-quarter trading period – up 6% compared to the first quarter of 2020.
The company is ‘looking forward’ to the summer period which is a key trading period and to broadening its portfolio of drinks and launching a new range of cocktail mixers at the beginning of the second quarter.
Fevertree reiterated its top-line guidance range as set out in March at £390 million to £405 million.
‘The group continues to be focused on delivering initiatives to mitigate these costs and expects to drive margin improvements as we progress through the year, which means we're on-track to deliver EBITDA (Earnings before interest, tax, depreciation, and amortisation) in-line with our guidance range of £36 million to £42 million for 2023,’ it said.
In the US, the company has had a ‘strong start to the year’ with growth in its Flavoured Sparkling and Club Soda ranges.
In Europe, ‘Fevertree continues to gain value share of the premium mixer category at retail, with encouraging growth in Italy and France,’ the company said.
LIBERUM VIEW
‘In what has been another tough year for Fevertree in terms of profitability, the group has continued to make good progress on sales in international sales (+18% year-on-year), in establishing local US production with 80% of local glass bottling demand being locally produced now, and entry into new categories including adult soft drinks and non-carbonated premium cocktail mixers.
‘Expectations for growth next year are still relatively bullish at 13-18% driven by expectations of circa 30% growth in the US. But the group faces another tough year in 2023 in terms of cost pressures, but there is light at the end of the tunnel with energy prices and transatlantic freight rates, two of its biggest cost pinch points, continuing to decline which should support margin progress in 2024 and beyond.’
LEARN MORE ABOUT FEVERTREE
