Fevertree – Sales Sparkle, But Logistics Costs Mean Profits Are Flatter

Fevertree – Sales Sparkle, But Logistics Costs Mean Profits Are Flatter
3844328 / Pixabay

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.

Get The Full Walter Schloss Series in PDF

Get the entire 10-part series on Walter Schloss in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues.

Q2 2021 hedge fund letters, conferences and more

SALT New York 2021: Wences Casares And Peter Briger On The Macro Case For Bitcoin

BitcoinAt this year's SALT New York conference, Wences Casares, the chairman of XAPO, and Peter Briger, the principal and co-chief executive officer of Fortress Investment Group discussed the macro case for Bitcoin. Q2 2021 hedge fund letters, conferences and more XAPO describes itself as the first digital bank of its kind, which offers the "convenience" Read More

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.”

About Hargreaves Lansdown

Over 1.64 million clients trust us with £135.5 billion (as at 30 June 2021), making us the UK’s largest digital wealth management service. More than 98% of client activity is done through our digital channels and over 600,000 access our mobile app each month.

Updated on

Previous article SEC Chair Gary Gensler On Handling Crypto And The Gamification Of Investing
Next article New Study Finds Buy Now, Pay Later Users Are Struggling
Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver

No posts to display