How Has the Beverages Industry of The UK Coped Up with Covid-19 Crisis So Far?

Beverages industry is considered to be one of the defensive sectors, as this space doesn’t generally get affected by any market cycles, primarily because of the fact that consumption remains the same during all periods, even though it is a part of the consumer goods industry, which is quite susceptible to such market cycles.

But this time the scenario is different, the industry that typically shows resilience during such tough times, has been equally affected in terms of its ability to perform as other industries from the consumer goods segment. This is primarily due to the fact that the lockdown in the United Kingdom, which has led to a closure of shops where people could buy these beverages, and as most companies that sell spirits and alcohol based products have had to either shut down their assembly lines or are using those lines to produce alcohol based cleaning products to support the healthcare system and the community as a whole. As per various experts, the beverages industry, especially the alcohol based beverage companies might experience a decline in revenue in Q2 2020 and even FY 2020, if the lockdown was to be extended any further. In the midst of this crisis, on 22^nd April 2020, Fevertree Drinks Plc, which is a London, the United Kingdom based soft drinks producer and seller, announced its preliminary results. Let us take a brief look at how the company performed during this period.

FEVR Results Highlights

For the year ended 31^st December 2019, the company reported that their revenue had increased by approximately 10 per cent and was reported to be at £260.50 million. Even though the revenue had increased, the gross profit margin was marginally lower as compared to the previous year. The company also reported a decline of 2 per cent year on year in Adjusted EBITDA, while the profit after tax also fell by around 5 per cent year on year and was reported to be at £58.50 million. Despite the marginal decline in the profit, the management of the company proposed the dividend approximately 4 per cent more than the previous year, at GBX 15.08 per share, out of which, the final dividend was reported to be at GBX 9.88 per share. It was announced that the final dividend is expected to be paid on 12^th June 2020, to the shareholders on the register as on 15^th May 2020. This is something the shareholders do have to look forward to.

Let us look at how the company’s stock has performed on the London Stock Exchange Market over the last few months, in the middle of the pandemic.

FEVR Stock Price Performance

(Source: Thomson Reuters) Daily Chart as on 24 – April - 2020, before the closing of the London Stock Exchange Market

As on 24th April 2020, at 09:00 A.M (Greenwich Mean Time), at the time of writing this report, the Fevertree Drinks Plc stock was trading at a price of GBX 1584.50 per stock on the London Stock Exchange market, an increase in the value of 2.23 per cent or GBX 34.50 per stock, as opposed to the price of the stock on the previous trading day, which had been reported to be at GBX 1550.00 per share. Fevertree Drinks Plc's market capitalisation was estimated to be GBP 1.799 billion, with regards to the current market price of the company's stock.

The company’s stock has yielded a positive return of approximately 64.90 per cent in the last one month since March 23, 2020. It has though yielded a negative return of around 5.90 per cent in the last three months since October 23, 2019. The company’s stock price has also given a negative return of approximately 27.80 per cent in the last six months since April 23, 2019.

At the time of writing, the beta of the firm's stock was recorded at a value of 1.52 pointing towards the fact that the company’s price movement is less volatile relative to the change in the value of the comparative benchmark index.

It is interesting to note that the company’s stock seemed to move with the market in terms of returns. As discussed earlier, the beverages market is also expected to slip in terms of their financial performance this term, and hence, the following would be an interesting read on how the stock prices of some of the companies from this sector have performed and what kind of an outlook do the Investors on the London Stock Exchange market have for these companies as well as the beverages industry in general.

A G Barr Plc (LON:BAG) Stock Price Performance

As on 24th April 2020, at 09:05 A.M (Greenwich Mean Time), at the time of writing this report, the A G Barr Plc stock was trading at a price of GBX 495.00 per stock on the London Stock Exchange market, a decline in the value of 0.10 per cent or GBX 0.50 per stock, as opposed to the price of the stock on the previous trading day, which had been reported to be at GBX 495.50 per share. A G Barr Plc's market capitalisation was estimated to be GBP 555.10 billion, with regards to the current market price of the company's stock.

The company’s stock has yielded a positive return of approximately 11.70 per cent in the last one month since March 23, 2020. It has also yielded a negative return of around 12.90 per cent in the last three months since October 23, 2019. The company’s stock price has also given a negative return of approximately 12.40 per cent in the last six months since April 23, 2019.

At the time of writing, the beta of the firm's stock was recorded at a value of 0.40 pointing towards the fact that the company’s price movement is less volatile relative to the change in the value of the comparative benchmark index.

Diageo Plc (LON:DGE) Stock Price Performance

As on 24th April 2020, at 09:10 A.M (Greenwich Mean Time), at the time of writing this report, the Diageo Plc stock was trading at a price of GBX 2660.00 per stock on the London Stock Exchange market, a decline in the value of 0.97 per cent or GBX 26.00 per stock, as opposed to the price of the stock on the previous trading day, which had been reported to be at GBX 2686.00 per share. Diageo Plc's market capitalisation was estimated to be GBP 124.89 billion, with regards to the current market price of the company's stock.

The company’s stock has yielded a positive return of approximately 9.5 per cent in the last one month since March 23, 2020. It has though yielded a negative return of around 16.7 per cent in the last three months since October 23, 2019. The company’s stock price has also given a negative return of approximately 13.8 per cent in the last six months since April 23, 2019.

At the time of writing, the beta of the firm's stock was recorded at a value of 0.68 pointing towards the fact that the company’s price movement is less volatile relative to the change in the value of the comparative benchmark index.

Britvic Plc (LON:BVIC) Stock Price Performance

As on 24th April 2020, at 09:15 A.M (Greenwich Mean Time), at the time of writing this report, the Britvic Plc stock was trading at a price of GBX 717.00 per stock on the London Stock Exchange market, a decline in the value of 1.24 per cent or GBX 9.00 per stock, as opposed to the price of the stock on the previous trading day, which had been reported to be at GBX 726.00 per share. Britvic Plc's market capitalisation was estimated to be GBP 1.936 billion, with regards to the current market price of the company's stock.

The company’s stock has yielded a positive return of approximately 12.8 per cent in the last one month since March 23, 2020. It has though yielded a negative return of around 19.90 per cent in the last three months since October 23, 2019. The company’s stock price has also given a negative return of approximately 28.90 per cent in the last six months since April 23, 2019.

At the time of writing, the beta of the firm's stock was recorded at a value of 0.73 pointing towards the fact that the company’s price movement is less volatile relative to the change in the value of the comparative benchmark index.

Stock Spirits Group Plc (LON:STCK) Stock Price Performance

As on 24th April 2020, at 09:20 A.M (Greenwich Mean Time), at the time of writing this report, the Stock Spirits Group Plc stock was trading at a price of GBX 168.20 per stock on the London Stock Exchange market, an increase in the value of 0.60 per cent or GBX 1.00 per stock, as opposed to the price of the stock on the previous trading day, which had been reported to be at GBX 167.20 per share. Stock Spirits Group Plc's market capitalisation was estimated to be GBP 334.40 million, with regards to the current market price of the company's stock.

The company’s stock has yielded a positive return of approximately 1.9 per cent in the last one month since March 23, 2020. It has though yielded a negative return of around 22.6 per cent in the last three months since October 23, 2019. The company’s stock price has also given a negative return of approximately 19.4 per cent in the last six months since April 23, 2019.

At the time of writing, the beta of the firm's stock was recorded at a value of 0.59 pointing towards the fact that the company’s price movement is less volatile relative to the change in the value of the comparative benchmark index.

Comparative Stock Price Chart of BAG, DGE, BVIC and STCK

(Source: Thomson Reuters) Daily Chart as on 24 – April - 2020, before the closing of the London Stock Exchange Market