Fevertree Drinks PLC (LON:FEVR) reported a 36% rise in first half revenues, which reached £141.8m. That reflects very strong growth outside of the UK, with US sales up 32% and European sales more than doubling. Off-trade sales remained strong, even as restaurants and bars started to re-open.
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Operating profits rose more slowly than revenue, up18.2% to £25.3m, as global logistics disruption increased freight and storage costs.
The board proposed a dividend of 5.52p per share, up 2% year-on-year.
The shares were broadly flat following the announcement.
Fevertree Drinks' Sales
Nicholas Hyett, Equity Analyst at Hargreaves Lansdown:
“The reopening of bars, and continued strong sales in shops and supermarkets, has kept Fevertree’s sales fizzing forwards. Rapid growth in the US and Europe is particularly welcome – since the group already has nearly 40% of the UK mixers market and squeezing extra juice from the domestic lemon is going to be challenging.
However, like many businesses, Fevertree has had to content with rising logistics costs – especially in shipping product across the Atlantic. With input costs also rising and HGV shortages creating some bottlenecks, disruption could get worse before it gets better. New bottling partners across the pond will help reduce the headwind next year, but in the short term its weighing on margins and means profit growth has been slower.
We also suspect the incredibly strong growth reported this half will moderate over the rest of the year, as customers complete their re-stocking and we exit pass the strictest lockdowns comparators from 2020. Having said that progress in the US in particular is not to be sniffed at, and if current momentum can be maintained then future growth prospects look bright for a group that not long ago looked like it was in danger of outgrowing its tank.”
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