Fever-Tree sees full-year results "comfortably ahead" of market views

Drink mixers maker Fever-Tree said on Monday that it expects results for the year ending 31 December to be "comfortably ahead" of current market expectations thanks to strong sales.

In a brief statement to be made at the annual general meeting, chairman Bill Ronald said 2016 was "another exceptional year" for the company, which continued to gain market share in both the on and off trade across all of its markets.

"Fever-Tree remains the pioneer and market leader of the premium mixer category and the momentum seen in 2016 has continued in the first four months of 2017. Given the strong sales in the period to date, the board anticipates that the results for the full year ending 31 December 2017 will be comfortably ahead of current market expectations."

Back in March, the group reported a surge in profit and revenue for the year to the end of December thanks to strong sales growth across all its regions and channels.

Pre-tax profit rose to £34.3m from £16.8m on revenue of £102.2m, up 73% from 2015. Fever-Tree noted high rates of growth across all regions, flavours and formats, with a particularly notable performance in the UK, where revenue was up 118% against strong comparators from 2016.

Whitman Howard adjusted its numbers on the back of the update, lifting its 2017 revenue forecast from £118m to £128m and its fully diluted earnings per share estimate from 25.2p to 28.0p. It also upped its price target on the stock from 1,250p to 1,700p.

"Fever-Tree remains an extremely well-run company with an extremely virtuous outsourcing based business model, strong cash flows and exciting new product development. However, there has to be some concern about Fever-Tree’s valuation in the context of its being a specialist mixer company. Mixers rely on distilled spirits for their volume and in the case of Fever-Tree western style spirits volumes. These spirits volumes are broadly static."

At 0932 BST, the shares were down 0.3% to 1,699.75p, reversing earlier gains.