Fever-Tree reports surge in revenue and profits
Fever-Tree saw profits after tax rise 26% to £61.8 million in 2018 as it continued to revel in Brits’ growing love of gin.
Gin has long been the star performer in the drinks industry and volume sales grew 41% in 2018 (Nielsen and CGA).
Many analysts credit the gin craze for boosting Fever-Tree’s fortunes, but the premium tonic supplier could just as easily be credited for fuelling the gin boom in the first place.
Fever-Tree helped the humble gin and tonic achieve a luxurious status among consumers and both continue to reap the rewards.
Revenue was up 40% to £237.4 million in 2018 and adjusted EBITDA grew 34% to £78.6 million, it revealed as it delivered its preliminary reports today.
Co-founder and chief executive Tim Warrillow said: “2018 was a significant year for Fever-Tree. In the UK, we strengthened our position as the leading mixer brand in the off-trade [IRI]. In the US, we successfully established our own operations and the business made real progress in deepening and widening its presence in multiple European regions.
“As the world’s leading premium mixer brand with a strengthening global distribution network we are well set to drive the international opportunity as the move towards the premium long mixed drink continues to gather momentum around the world.
“At this early stage in the year, the group is trading in line with board expectations and we remain excited about the size of the opportunity that lies ahead.”
Despite the apparently strong results, the City was initially unimpressed by Fever-Tree’s 2018 performance. Shares in the company fell by as much as 8% early Tuesday. However, it soon recovered and by 1.30pm its share price was 2651.2p, up from 2551.9p at the close of trading on Monday.
It retains a market cap north of £3 billion, which is larger than that of Britvic.
Its gross profit margin did shrink from 53.5% in 2017 to 51.8% in 2018, and some analysts blamed the introduction of the sugar tax for this fall.