Fever-Tree reports 10% sales growth in 2019

Leading tonic and mixer producer Fever-Tree experienced a 10% lift in sales in 2019 driven by strong growth in the US.

Revenue for the 12 months to 31 December 2019 reached £260.5 million (US$322.3m), up from £237.4m (US$293.7m) in 2018.

However, pre-tax profits decreased 5% to £58.5m (US$72.4m) last year compared to 2018.

The UK presented a “challenging” market, according to Fever-Tree, particularly in the off-trade, resulting in a 1% decline in revenue.

Tim Warrillow, co-founder and CEO of Fever-Tree, said: “The group delivered good growth in 2019 despite a more subdued UK market, with double-digit growth across our international regions.

“We strengthened our global leadership position and in doing so continued to build a strong platform to deliver long-term, sustainable growth.”

Fever-Tree said it has had a “solid start” to the 2020 financial year, with group trading in the first two months in line with the board’s expectations.

A pricing initiative for the US announced in January has been “very well received” by on- and off-trade customers and has shown promising results from initial trials, with new accounts secured.

Covid-19 impact

Fever-Tree said that while covid-19 will have an impact on the group’s full-year 2020 results, it is financially strong and has well balanced revenue streams covering a range of regions, channels and customers.

Warrillow added: “We made a solid start to the new financial year, with group trading in the first two months in line with the board’s expectations. The US, in particular, started the year strongly and we have been encouraged by the response from our key customers to the US price optimisation.

“Clearly the scale and impact of covid-19 has posed some significant challenges across our regions. With regards to our people, we have a strong close-knit team who are integral to the success of the business and as such our position since the beginning of this crisis has been to offer support and certainty to all employees and to this end we have not furloughed anyone.

“We are determined to come out the other side as an even stronger business but also one that has made a difference during the crisis. With regards to trading, while the on-trade sector is facing an extremely challenging period, we have seen strong sales in the off-trade in many of our markets both from the initial buying ahead of lockdown but also in recent weeks as at home consumption has remained robust.

“While we will not be unaffected by the current situation, especially in the on-trade, Fever-Tree is well positioned to manage our way through this situation. We are a global business with revenue diversified across regions, channels and customers.

“Financially the group is very secure. We are debt free, with a strong cash position. The group’s unique asset light, outsourced business model means we have a low fixed cost base, a small, dedicated team and the flexibility to manage the current challenges.

“The wider long-term trend towards premium spirits and premium long mixed drinks continues and we are confident the group will be well placed once the current period of disruption and uncertainty ends.”

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Author: Melita Kiely {authorlink}