-FY22 ahead of expectations and reiterated guidance
-Cost pressure remain a drag
-Progress in US penetration
Investors in up-market mixer brand Fevertree Drinks (FEVR: AIM) breathed a sigh of relief as the company reiterated its guidance for the year.
The shares were up over 7% to £11.55 in morning trading as Fevertree said it expected full-year revenue of between £390 million to £405 million and earnings before interest taxation depreciation and amortisation (EBITDA) of between £36 million to £42 million.
Fevertree reported pre-tax profits for the full year of £31 million compared to £55.6 million in the same period last year. Adjusted EBITDA of £39.7 million was marginally ahead of expectations.
Tim Warrillow, Co-Founder and CEO of Fever-Tree said: ‘These regions now account for nearly 70% of our business and their continued strong growth underlines our position as the world's number one premium mixer brand.
‘Whilst the Group continues to operate in a challenging cost environment, we are resolutely focused on delivering a wide range of initiatives across the business that will optimise operational capabilities and underpin our confidence in driving margin improvement in 2024 and beyond.’
Fevertree reported 11% year-on-year growth, driven by 18% growth across, the US, Europe and the rest of the world.
The company also proposed a slight 2% increase for its full-year ordinary dividend of 16.31p per share.
In May last year, the company paid a special dividend of £50 million and finished the year with £95.3 million net cash.
LIBERUM VIEW
Liberum analysts however expressed caution and rated the company ‘HOLD’ citing ‘continued cost pressures’ which could ‘cloud recovery potential’.
‘Input and logistics cost pressures remain for 2023 but should subside from 2024 onwards, with self-help initiatives proving further support to margins. But questions remain if the group will return to its historic levels of profitability.’
Liberum also highlighted the need for improvement in Fevertree’s US market to help ‘profitability with local US production.’
Cost pressures - notably glass costs and trans-Atlantic freight costs were also mentioned by Fevertree as effecting its gross margin, and ‘industry-wide’ inflationary pressures.
Fevertree however remains positive about the US market in the long-term and the company hopes buying a non-carbonated cocktail mixer business will accelerate the launch of the Fever-Tree cocktail mixer range in 2023.
