Fevertree: US growth makes up for ‘unseasonable’ weather hitting UK sales
Premium drink mixer brand Fevertree has reported a modest rate of growth despite a weak consumer backdrop after being boosted by sales in the US.
The company told the London Stock Exchange this morning that revenue grew by two per cent year on year at constant currency rates in the six months to 30 June.
Revenue in the US grew by 10 per cent at constant currency rates, “driven by distribution gains and flavour and format innovation”, the business said.
The US market overtook the UK as the company’s largest single market last year.
However, European sales suffered, with a 10 per cent year-on-year drop in revenue to £44.5m.
Revenue in the UK similarly dropped by six per cent, to £50.9m.
Fevertree said the dip was due to unseasonable weather and the delayed start of summer, as well as distributor order phasing in Europe.
Overall gross profit grew by 15 per cent, to £62m, while the adjusted earnings before interest, tax, depreciation and amortization (EBITDA) margin grew by 79 per cent.
The company said the improvement in its EBITDA margin was driven by improved glass bottle pricing, better trans-Atlantic freight rates and net price increases with customers across key markets.
Fevertree said it expected revenue to grow by four to five per cent over the full year, and added that post period-end summer trading has been very good, with growth of 13 per cent in July and August.
The company said it was “better positioned than ever” to capitalise on long-term drink trends like spirit growth, adult soft drinks and premiumisation.
Tim Warrillow, CEO of Fevertree, said: “The Fevertree brand performed well against a tough market backdrop.
“Whilst the first half was challenging, we are controlling the controllables.
“We have delivered substantial margin improvement, resulting in n increase in EBITDA year on year, as well as driving share gains against the competition across all our regions, demonstrating the growing strength of the Fevertree brand.
“We’re optimistic of an acceleration of growth across the second half of the year and have seen a much more positive trading performance in July and August.”