Fevertree – serves up a mixed set of full-year numbers
- Fevertree’s full-year underlying revenue grew 6% to £364.4mn, ignoring exchange rates
- Underlying cash profits (EBITDA) fell 23% to £30.5mn
- Net cash dropped 37% to £59.9mn
Aarin Chiekrie, equity analyst, Hargreaves Lansdown:
“Fevertree served up a mixed set of full-year results to markets. Revenue fizzed 6% higher to £364.4mn as the group scored market share gains across all its major regions. In line with January’s trading update, cash profits came in at just £30.5mn. But that was still right at the bottom end of the group’s previous guidance range, which had already been lowered. This was in large part due to its high exposure to elevated energy costs given that most of its sales are bottled in glass. Coupled with inflated freight costs, profitability really got squeezed. Trading in the UK has remained underwhelming. The region looks saturated with premium mixer, with Fevertree already dominating market share here, so growth’s unlikely to shoot the lights out. This means the US will need to continue picking up the slack moving forward. The US is now Fevertree’s largest region by revenue, yet still offers exciting growth opportunities given the vast size of this market.
The balance sheet is in very good shape thanks to low debt levels. And after a one-off buyback of inventory in Australia, it looks like the worst of the operational challenges are now behind the group. But this year’s profit targets look stretching, so Fevertree’s going to need to keep a tight grip on cost if it wants to nearly double its profit margins. And the sky-high valuation’s already pricing a lot of this in. Many investors will want to see more concrete signs that expansion in the US is boosting the bottom line before getting too excited about this mixer maker.”
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