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Fevertree Drinks plc (LSE:FEVR) has announced its interim results for the six months ended 30 June 2024. Despite a challenging consumer environment and poor weather conditions in the second quarter, Fevertree has demonstrated resilience and strong operational progress.
Key Financial Highlights
- Revenue Growth: Fevertree achieved a 2% increase in revenue at constant currency compared to the previous year, reflecting the brand's solid performance despite a subdued market. The growth rate was constrained by unfavorable weather conditions across the UK and Europe during the second quarter.
- Post-Period Trading: The brand experienced a notable uptick in performance in July and August, with revenue growth of 13% during these months, indicating a robust recovery in summer trading.
- US Market Performance: Fevertree continued to expand its presence in the US, reinforcing its market leadership in the Tonic Water and Ginger Beer categories. The Group's gains were driven by strategic distribution enhancements and innovative product offerings in both flavor and format.
- Margin Improvement and EBITDA Growth: Significant operational strides led to a 520 basis point improvement in gross margin and an approximately 80% increase in Adjusted EBITDA. These gains mark a substantial recovery in Group margins, reflecting effective cost management and operational efficiencies.
- Dividend: Fevertree has recommended an interim dividend of 5.85 pence per share, up 2% from the previous year. This increase underscores the Group's commitment to returning value to shareholders while navigating market challenges.
Outlook and Guidance
Second Half Performance:
Fevertree has seen a strong start to the second half of the fiscal year across all regions. The Group anticipates brand growth of approximately 7% to 10% for the second half, projecting full-year revenue growth of around 4% to 5% for the Fever-Tree brand.
Operational and Investment Plans:
The Group remains on track to achieve approximately 600 basis points of gross margin improvement by the end of the year. Fevertree plans to maintain its investment strategy with an expected £90 million in overhead expenditure for the full year, aligning with prior expectations.
