Fever-Tree half-year sales fizz despite damp UK weather
Mixer-maker Fever-Tree fizzed to sales and earnings growth in the first half of the year, despite being weighed down by gloomy UK weather.
The company saw sales jump by 13% to £117.3 million in the six months to June, as it was lifted by fast-growing global markets.
Sales in the UK, which account for more than half of its total business, rose by only 5% as the brand was affected by “unseasonably poor weather”.
A damp spring and wet start to summer has put pressure on a number of other soft drinks business, including Irn Bru maker AG Barr, which warned over profits last week.
Fever-tree said the poor weather “dampened” growth rates against a strong performance in the summer of 2018.
However, founder and chief executive officer Tim Warrillow said the drinks business has nevertheless strengthened its market position.
The company said it is “very well positioned” for further growth in the UK as it builds share across the mixer market, so it is not just reliant on the popularity of G&Ts.
Gross profit for the period rose by 10% to £60 million, while adjusted earnings rose by 8% to £36.7 million, it said, and it held firm on profit outlook for the year.
Fever-Tree was buoyed by solid growth in the US, where its sales jumped by 31% to £19.8 million.
It said it has been very pleased with its progress in the US since a restructuring last summer which saw it take direct control of all operations across the Atlantic.
Costs also rose during the period, with the price of glass rising and storage costs in the UK increasing due to higher levels of inventory ahead of Brexit.
Mr Warrillow said: “It has been an encouraging first half for the group, with growth across all our four regions, most notably in the US, where we have made significant distribution gains and operational progress.
“While we have not been immune to the impact of the unseasonably poor weather in the UK, we have further strengthened our market leadership position within the UK and have seen positive momentum in Europe and the rest of the world, reflecting our increasingly global footprint.
“Whilst we remain mindful of the tough comparators over the remainder of the summer in the UK, the board anticipates that the outcome for the full year will be in line with its expectations.”