Fever-Tree raises toast to strong first half

The mixer specialist reported a 36% improvement in revenues for the six months to 30 June, to £141.8m, while adjusted earnings before interest, tax, depreciation and amortisation rose 23% to £29.2m.

Off-trade sales "exceeded expectations" across markets, Fever-Tree said, while the on-trade market was starting to recover from the pandemic, which closed pubs and restaurants across regions.

Growth was particularly strong in the US, with sales ahead 32%, and in mainland Europe, where like-for-like sales excluding Global Drinks Partnership - the German drinks distributor Fever-Tree acquired last year - jumped 79%.

Tim Warrillow, chief executive, said: "We have been encouraged by the initial re-opening of the on-trade, the ongoing strength of the off-trade - with sales exceeding pre-Covid levels across all or regions - as well as the response to our new product lunches.

"We believe the group is emerging from the pandemic in a very strong position."

As at 1245 BST, shares in the AIM-listed group were ahead 7% at 2,288.0p.

However, Fever-Tree acknowledged that gross margins had been "significantly impacted" by ongoing global logistics disruption and cost pressures, with trans-Atlantic freight charges and US storage costs notably higher.

It continued: "We have taken a number of actions to mitigate these pressures but as stated previously, we expect disruption and elevated logistics costs to continue to impact through the remainder of this financial year and into 2022."

Nicholas Hyett, equity analyst at Hargreaves Lansdown, said: "With input costs also rising and HGV shortages creating some bottlenecks, disruption could get worse before it gets better. New bottling partners across the pond will help reduce the headwind next year, but in the short term it’s weighing on margins and means profit growth has been slower.

"We also suspect the incredibly strong growth reported this half will moderate over the rest of the year as customers complete their re-stocking and we exit pass the strictest lockdown comparators from 2020.

"Having said that, progress in th US in particular is not to be sniffed at, and if current momentum can be maintained, then future growth prospects look bright."