Fever-Tree boosted by deals to supply Marks & Spencer and British Airways

Discussion in 'Market News' started by Lily, Mar 14, 2016.

  1. Lily

    Lily Forum Member

    Aug 29, 2015
    Likes Received:
    Premium mixer specialist reports 82% jump in earnings

    Fever-Tree, the supplier of premium tonic water and other carbonated mixers, has seen profits fizz up after it won new business with Marks & Spencer and British Airways.

    In its first full financial year as a listed company - it joined the London market in November 2014 - Fever-Tree has reported a 71% jump in revenues to £59.3m and an 82% increase in earnings to £18.2m. Its shares have added 4.5p to 587.5p following the figures.

    Fever-Tree’s on-going success is driven by a global consumer desire and demand to drink premium mixers to complement their premium spirits, and our strong first move advantage..We maintain that the premium segment is still in its infancy and will continue to outperform the other drinks categories.

    A strong year for Fever-Tree, with the leading UK performance cemented by some good off-trade success but also growing on-trade penetration. Europe and the US also showed strong growth. However, there remain ample opportunities for further penetration gains in all geographies and in both on- and off-trade channels. We make no changes to forecasts at this stage and our target price remains at 740p.

    We think the group can deliver underlying growth of around £10m-£12m per annum. Growth over and above this will be determined by sizeable wins in the off-trade, although these are less predictable. Hence, we will update forecasts as and when necessary if the group is successful in adding a number of these.

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