Fevertree share price jumps Britons buy drinks at convenience stores

0
39
Impact: Pubs and bars may be closed, but shoppers are still buying drinks in shops


Fevertree shares jump despite pubs being shut as locked down Brits snap-up its drinks in convenience stores and supermarkets

  • Sales in supermarkets and local stores pushed up sales as lockdown started
  • But, company is being hit by the mass closure of pubs and restaurants
  • AIM-listed group’s share price up over 13% in afternoon trading today  

Britons snapping up beverages in supermarkets, local convenience stores and off-licences ahead of lockdown gave drinks mixer group Fevertree a boost to its bottom line, new results show.

Shares in AIM-listed Fevertree, which outsources most of its operations, rose over 13 per cent this afternoon after the group said the in-store arm of its business remained ‘robust.’

But, with pubs and restaurants shut all over the country, the group conceded it was bracing itself for an ‘extremely challenging’ period.

Impact: Pubs and bars may be closed, but shoppers are still buying drinks in shops

On the up: Shares in AIM-listed Fevertree jumped over 13 per cent this afternoon

On the up: Shares in AIM-listed Fevertree jumped over 13 per cent this afternoon

The company’s share price is currently up 13.37 per cent or 182.5p to 1,547p, but, it is important to note that at the same point a year ago, the share price stood over the 3,000p mark.

The group’s top brass have proposed a final dividend of 9.88p a share for investors, bringing the full year’s payment to 15.08p. 

‘The extreme nature of the current crisis is drawing a clear dividing line between the haves and have nots and Fevertree’s doubled year-end cash pile of more than £100million puts it firmly in the ‘haves’ category, said AJ Bell’s investment director Russ Mould.

Since its debut on the stock market in 2014, Fevertree’s share price, had in recent times ‘gone flat’, according to Mr Mould.

Mr Mould added: ‘Post its 2014 stock market debut it bubbled up rapidly, becoming a market darling through a string of earnings upgrades as it gained traction in the UK market.

‘But by early 2020 the shares had more than halved from a valuation in late 2018 which would have put it on the fringes of the FTSE 100, if it was listed on London’s Main Market rather than AIM.

‘Amid the peak of the sell-off in March it fell to its lowest point since 2016 as investors reacted to the implied loss of sales to pubs, hotels and restaurants due to coronavirus.

‘However, the stock has now regained some fizz. Trading commentary alongside its full year results revealed sales through off licences, convenience shops and supermarkets spiked in the early stages of the pandemic amid a wave of stockpiling.’

Fevertree’s full year revenue reached £260.5million in the year ending 31 December 2019, which is 9.7 per cent higher than at the same point a year ago. Pre-tax profits slipped 5 per cent to £58.5million over the period.

Growth was driven by the US, Europe and the ‘Rest of the World’, whilst UK sales fell by 1.1 per cent. The company said its US arm had seen ‘real progress’, with revenue up 33 per cent.

Key numbers: Fevertree's full year revenue reached £260.5million in the year ending 31 December

Key numbers: Fevertree’s full year revenue reached £260.5million in the year ending 31 December

Its year-end cash stash stood at £128.3million, an increase of 53.5 per cent on a year ago. 

The group’s ‘on-trade’ sales, encompassing pubs and restaurants, make up about 45 per cent of its sales and looks set to be hit hard by the Covid-19 pandemic.

Tim Warrillow, chief executive and co-founder of Fevertree, said: ‘While we will not be unaffected by the current situation, especially in the On-Trade, Fever-Tree is well positioned to manage our way through this situation. 

‘We are a global business with revenue diversified across regions, channels and customers. Financially the Group is very secure. We are debt free, with a strong cash position.’

The company has, to date, not furloughed any of its workforce. Instead, it has redeployed staff with capacity to different areas of the business or urged staff to help their communities by volunteering with the NHS.

Advertisement



Source link

LEAVE A REPLY

Please enter your comment!
Please enter your name here