Fever-Tree fizzes higher as FY seen "materially ahead" of expectations

Shares in mixers and tonics maker Fever-Tree Drinks fizzed higher on Tuesday as the company said full-year results will be “materially ahead” of its expectations following strong growth in the second half.

Sales in the second half are expected to be up 75% on the prior year and as a result, full-year revenue is expected to be 73% higher than 2015 at about £102.2m.

Fever-Tree said the UK saw an exceptionally strong performance in the second half of 2016, with full-year revenue expected to be up 118% on 2015. Sales performance has been strong in both the On-Trade and Off-Trade channels, with particularly notable growth over the Christmas period against a very strong prior year comparator.

In Continental Europe, the group performed well in the second half and full-year revenue is expected to be 39% higher than the year before. In the USA, strong revenue growth also continued in the half and revenue for the full year is forecast to be up around 55% on 2015.

Rest of World sales growth accelerated in the second half, with full-year revenue expected to be 88% higher than the year before.

In addition, Fever-Tree said free cash flow generation and the balance sheet have remained strong and its year-end net cash position is anticipated to be ahead of board expectations.

Co-founder and chief executive officer Tim Warrillow said: "We are delighted with our performance in 2016. Fever-Tree continues to gain market share in both the on and off trade and while we have experienced strong growth across all regions, our performance in the UK has been particularly notable culminating in a very strong Christmas period.

“Fever-Tree continues to pioneer and lead the premium mixer category. We believe the global opportunity remains in its early stages and will continue to be supported by the long term premiumisation of the spirits sector as well as the growing movement towards mixed and long drinks. As a result, the board remains confident of the future outlook for the business."

At 1007 GMT, the shares were up 5.6% to 1,198.00p.