Gigantic Sales Growth Is Driving Fevertree Drinks Plc’s Stock On The London Stock Exchange

  • Mar 28, 2019 GMT
  • Team Kalkine
Gigantic Sales Growth Is Driving Fevertree Drinks Plc’s Stock On The London Stock Exchange

Fevertree Drinks is engaged in developing and supplying of premium mixer drinks. The company offers four variants of tonic water, two variants of ginger beer, three variants of lemonade, and one variant each of ginger ale, soda water and cola to hotels, restaurants, bars and cafes. Fevertree Drinks operates in the UK, where it is headquartered in London.

Products:  Tonic water, Ginger beer, Lemonade Ginger ale, Soda water Cola

On March 26, 2019, the company reported its full-year financial results for the year ended December-31-2018, Fevertree's FY18 results were marginally ahead of expectations with adjusted EBITDA surged by 34% to £78.6m. Throughout 2018 the group made considerable progress in all key markets; specifically, 

1)Consolidating its leading position in the UK mixer category, with its share now at 42%;

2)Transitioning to direct control of US operations and delivering a modest acceleration in H2 US sales growth;

3)Reaping the benefits of continued investment in Continental Europe, doubling headcount and delivering sales growth of 24%.

The company reported that the UK sales increased by 55 per cent on a year-on-year basis, driven by consumption of 66 million bottles of gin, which was nearly double of 2016 bottle consumed. As per some media houses estimates, four in every ten Britishers bought Fevertree mixers.

Trading for FY 2018 is in-line with expectations and management remains positive about the growth opportunities that lies ahead.

Stellar Performance

For FY18, Fevertree’s revenue rose to £237 million as compared with £170 million in FY17 and witnessed a growth of 40% on a year-on-year basis. Driven by increase of 52 per cent in the UK sales, increase of 21.1 per cent in USA sales, 24.1% increase in Europe sales and an increase of 47.8% in rest of the world sales (ROW). Although gross margin marginally declined to 51.8% during FY18 as compared with 53.5% in FY17. Diluted earnings per share rose to 53.19 pence as compared with EPS of 39.15 pence during the corresponding period of the previous year.

Dividend surged by 36 per cent during FY18

For FY18, the company announced a final dividend of 10.28 pence per share, bringing total dividend of 14.50 pence per share for the year ended December 31, 2018, as compared with a total dividend of 10.65 pence paid for FY17.

Daily Stock Performance

(Source: Thomson Reuters)

In yesterday's session, shares of Fevertree Drinks Plc surged by 6.22%, as the company reported good sets of numbers of the FY18. At the time of writing (as on March 27, at 04:13 PM GMT) before market close, shares were trading at GBX 2,880 and added 180 points or 6.67% against its previous closing. At the volume standpoint, stock's 5-day average daily volume increased by 108.76% against 30-day average daily volume traded on the London Stock Exchange. Although, on year-on-year basis shares of Fevertree Plc have given a negative return of 2.49% but on a year-to-date basis shares were up by 22.78%, which indicates an uptrend in the stock price.

 

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