TIDMFEVR
RNS Number : 9444L
Fevertree Drinks PLC
25 July 2017
25(th) July 2017
Fevertree Drinks plc ("Fever-Tree")
Interim Results
Fever-Tree, the world's leading supplier of premium carbonated
mixers today announces its Interim Results for the period ended 30
June 2017.
Financial Highlights:
-- Revenue up 77% to GBP71.9m (H1 2016: GBP40.6m)
-- Gross margin of 54.5% (H1 2016: 54.8%)
-- Adjusted EBITDA(1) up 102% to GBP25.2m (H1 2016: GBP12.4m)
-- Strong balance sheet with net cash at period end of GBP40.5m (H1 2016: GBP18.6m)
-- Diluted EPS up 106% to 16.72 pence (H1 2016: 8.12 pence)
-- Interim dividend up 95%% to 3.01 pence per share (H1 2016: 1.54 pence)
Operational Highlights:
-- Strong growth across all regions, channels and flavours
-- Exceptional growth of 113% in the UK as distribution gains continue to drive performance
-- Fever-Tree has driven 99% of the value growth in the entire
UK mixer category within retail in the last 12 months and now holds
a 30% value share (IRI)
-- Expanded distribution of our 150ml can format continues to
drive significant incremental growth at UK retail, with new
flavours introduced and a listing across the Virgin Atlantic fleet
from July 2017
-- Continued new retail distribution wins globally; new
listings, and increased stores and product ranging within existing
retail customers;
-- New bottling partner established in Spain to service Southern European markets initially
Tim Warrillow, CEO of Fever-Tree said:
"We are delighted to report another strong performance in the
first half of 2017, continuing the momentum seen in 2016. We
achieved growth in all our regions, driven by further distribution
gains and underlying rate of sales growth as the two key trends of
premiumisation and mixability continue to gather pace globally.
"We continue to invest and improve our infrastructure,
relationships with key suppliers and customers as well as adding to
our senior team. The strength of our brand and first mover
advantage means we are well positioned as the opportunity for
premium mixers continues to gather momentum across our key
markets."
Given the strong performance in the first half of the year, the
Board anticipates that the outcome for the full year will be
materially ahead of its expectations."
(1) Adjusted EBITDA is earnings before interest, tax,
depreciation, amortisation, share based payment charges and finance
costs
For further information:
c/o FTI +44 (0)20
Fevertree Drinks plc 3727 1000
Tim Warrillow, Co-founder and
CEO
Andy Branchflower, Finance
Director
FTI Consulting - Financial
PR +44 (0)20 3727 1000
Jonathon Brill fever-tree@fticonsulting.com
Oliver Winters
Georgina Goodhew
Investec Bank plc - Nominated
Adviser and Broker +44 (0)20 7597 4000
Garry Levin
Matt Lewis
Alex Wright
David Anderson
Updated Imagery:
Updated Company imagery can be accessed here -
http://www.fever-tree.com/corporate/image-library.
Notes to Editors:
Fever-Tree is the world's leading supplier of premium carbonated
mixers for alcoholic spirits by retail sales value, with
distribution to over 50 countries worldwide. Based in the UK, the
brand was launched in 2005 to provide high quality mixers which
could cater to the growing demand for premium spirits, in
particular gin, but also increasingly for vodka, rum and whisky.
The Company now sells a range of carbonated mixers to hotels,
restaurants, bars and cafes ("On-Trade") as well as selected retail
outlets ("Off-Trade"). Approximately 56 per cent of the Group's
sales were derived from outside of the UK in financial year 2016,
with key overseas markets in the US and Europe.
Chief Executive's report
I am delighted to report that the Group's strong performance in
2016 has continued in the first half of 2017. During the period we
achieved revenue of GBP71.9m, representing growth of 77% on the
first half of 2016.
Whilst gross margin of 54.5% represents a slight retraction from
the 54.8% achieved in the first half of 2016, the Group achieved an
adjusted EBITDA of GBP25.2m in the first half of the year (H1 2016:
GBP12.4m) at an improved adjusted EBITDA margin of 35.0% (H1 2016:
30.7%). This performance resulted in diluted earnings per share in
the six month period of 16.72p (H1 2016: 8.12p), growth of 106% on
the prior period. We begin the second half of 2017 with a strong
balance sheet and net cash of GBP40.5m (H1 2016: GBP18.6m).
Results
Half year Half year Constant
ended 30 ended 30 Reported Currency
June 2017 June 2016 Movement Movement
GBPm GBPm % %
------------------ ----------- ----------- ---------- ----------
Revenue 71.9 40.6 77% 70%
Gross Profit 39.2 22.3 76% 66%
Gross Profit
margin 54.5% 54.8%
Adjusted EBITDA 25.2 12.4 102% 85%
Adjusted EBITDA
margin 35.0% 30.7%
------------------ ----------- ----------- ---------- ----------
Diluted EPS 16.72p 8.12p 106%
Interim Dividend 3.01p 1.54p 95%
Territory review
Revenue by territory
Half year Half year
ended 30 ended 30 Share of
June 2017 June 2016 Movement revenue
GBPm GBPm % %
------------- ----------- ----------- --------- ---------
UK 33.6 15.8 113% 47%
Continental
Europe 22.0 13.4 64% 31%
USA 13.2 9.2 43% 18%
RoW 3.1 2.2 45% 4%
Total 71.9 40.6 77% 100%
UK
The UK remains the Group's largest market, contributing 47% of
Group sales in the period, with revenue growth of 113% compared to
the first half of 2016.
Sales growth was strong across both On-Trade and Off-Trade
channels and across flavours and formats. The performance in the
Off-Trade channel in particular, where 50% of UK sales are now
made, was exceptional in the first half of 2017. This was helped by
momentum from the distribution gains made through 2016, the
continued strong performance of our 150ml can format, as well as
new distribution gains made in the first half of 2017. The
Off-Trade sales growth was also assisted by very strong June sales
in advance of July promotions at key retailers. Notwithstanding the
period performance, we are mindful that stronger comparators will
be lapped as we progress through the second half of 2017,
especially with respect to the exceptionally strong Christmas
trading achieved in 2016.
We have seen the continued success of our 150ml can format,
launched in June 2015, which now represents 40% of the UK Off-Trade
sales mix with a strong underlying rate of sale growth and an
increasing distribution footprint. The 150ml range includes four
tonic flavours and has recently been extended to include ginger ale
and premium lemonade cans specifically for the July 2017 listing
across Virgin Atlantic's entire fleet.
Fever-Tree drove 99% of the value growth in the entire UK mixer
category within retail in the 12 months to June 2017 and now holds
a 30% value share (IRI). This increasing level of premium
penetration continues to outstrip the 16.5% proposed as the target
value share at maturity for the premium segment of the mixer
category (EY, September 2014) and again illustrates the extent to
which Fever-Tree is rapidly transforming the UK mixer category.
In the On-Trade channel, continued strong revenue growth was
achieved, driven by underlying rate of sale growth as well as an
expanding distribution footprint. The Group works increasingly
closely with key wholesale and managed group partners,
strengthening relationships that help us to drive our first mover
advantage in the market.
We have continued to build on our partnerships with both the
established premium gin brands and the increasing number of local
craft gin brands, enabling Fever-Tree to play a key role alongside
these brands in driving the premium gin and tonic trend across the
UK. We also have begun to seed our new expanded range of dark
spirits mixers across a small number of high end On-Trade bars this
summer and have seen increased distribution of our Cola at retail
in the first half of 2017. We are increasingly optimistic about the
significant opportunity in premium dark spirits mixers, both within
the UK and across our International markets.
Continental Europe
Revenue growth of 64% was achieved in the period, which
represented growth of 53% on a constant currency basis. Sales
growth was achieved across all territories; however, the
acceleration in the period reflects a notably strong performance
across a number of key Western European territories. Tonic flavours
continue to play a dominant role in these markets, with our
Aromatic Tonic performing well since its introduction in the first
half of the year, reflecting the gin and tonic trend that is
increasing in momentum across Western Europe. It is also notable
that Ginger Beer is increasing in prominence in the sales mix,
particularly in Italy where just as we have seen in the USA, the
Moscow Mule is increasing in popularity.
The strong sales performance in the first half of the year was
assisted by the phasing of pre-summer sell-in to our importers in
key territories, which resulted in an exceptional sales performance
in June 2017 and means certain territories begin the second half of
2017 well stocked. Therefore, we expect reported growth rates will
not be as strong in the second half of 2017. However, with an
expanding retail footprint across the region and an increasingly
strong position in many key territories the Group remains very well
positioned to capture the significant premium mixer opportunity in
Continental Europe.
USA
Revenue growth of 43% in the period represented growth of 29% on
a constant currency basis. Off-Trade listings achieved in the
second half of 2016 are performing well and we are seeing
consistent strong growth in both Tonic and Ginger Beer flavours as
the premium gin and tonic and Moscow Mule continue to increase in
popularity. The US premium mixer opportunity is still at a
relatively early stage and as the first mover and number one
premium mixer brand the Group remains well positioned for future
growth.
RoW
Sales growth of 45% was achieved within the RoW region which
continues to represent strong potential for the Group in the medium
to longer term. Alongside Australia and Canada we are also seeing
increasing scale and a platform for growth in South Africa and
Colombia.
Financial and Operational
Gross margin and operating expenses
Gross margin of 54.5% represents a slight retraction from the
54.8% achieved in the first half of 2016, where as expected, the
investment in our new bespoke glass bottle introduced the second
half of 2016 had an impact on underlying glass costs. The impact of
this investment has been largely offset by the net benefit to the
Group of the stronger US dollar and Euro during the first half of
2017 compared to the first half of 2016.
Underlying operating expenses(1) reduced as a proportion of
revenue to 19.6% during the period (H1 2016: 24.1%), and as a
result, EBITDA margin achieved in the period improved notably to
35.0% (H1 2016: 30.7%). It should be noted that the prior period
contained a GBP1.4m unrealised loss made on outstanding forward
exchange contracts which skewed the level of underlying operating
spend. Therefore disregarding foreign exchange-related gains and
losses recognised in operating expenditure, the level of underlying
spend is more comparable in both periods at 20.0% of revenue (H1
2016: 21.5%). Due to phasing of spend during the year it is
expected that underlying operating expenditure in the second half
of 2017 will be more in line with the budgeted level of 22% of
revenue.
Cash position and working capital
The Group had net cash of GBP40.5m at period end (H1 2016:
GBP18.6m), with GBP46.6m of cash at the bank offset by GBP6.1m of
bank loans. Adjusted operating cash flow in the period was strong
at 92% of adjusted EBITDA (H1 2016: 95%). As in prior years, this
conversion rate is influenced by seasonality and is expected to
return to levels seen historically as we progress through the
second half of 2017.
Operational
The Group has contracted with and begun bottling with a new
European bottling partner, based in Spain. It is expected that
initially this site will bottle for territories in the Southern
European region. This development increases our bottling footprint
to five partners across the UK and Europe, further improving the
Group's bottling capacity and contingency and is in line with our
stated strategy to bottle closer to our key regions and territories
as appropriate over time.
We continue to add to the senior management team with a Global
Strategy Director, a Commercial Strategy Director and an Innovation
Director scheduled to begin in the second half of the year with a
remit to focus on deepening both distribution and product range
within our existing territories.
Dividend
Reflecting the Board's continued confidence in the outlook, the
Directors are pleased to declare an interim dividend of 3.01 pence
per share (H1 2016: 1.54 pence per share). The dividend will be
paid on 8 September 2017, to shareholders on the register on 11
August 2017.
Outlook
Given the strong performance in the first half of the year, the
Board anticipates that the outcome for the full year will be
materially ahead of its expectations.
Tim Warrillow
Chief Executive
Consolidated statement of comprehensive income
For the six months ended 30 June 2017
Six months Six months
ended ended Year ended
30 June 30 June 31 December
2017 2016 2016
Note GBP GBP GBP
Revenue 2 71,941,208 40,582,364 102,237,354
Cost of sales (32,718,694) (18,328,176) (45,815,263)
Gross profit 39,222,514 22,254,188 56,422,091
Administrative expenses (15,155,700) (10,383,071) (22,049,714)
Adjusted EBITDA* 25,150,252 12,441,007 35,838,989
Depreciation (182,857) (105,288) (249,318)
Amortisation (360,000) (360,000) (720,000)
Share based payment charges (540,581) (104,602) (497,294)
----------------------------- ----- ------------- ------------- -------------
Operating profit 24,066,814 11,871,117 34,372,377
Finance costs
Finance income 35,845 37,299 79,821
Finance expense (27,027) (111,794) (150,318)
Profit before tax 24,075,632 11,796,622 34,301,880
Tax expense (4,631,859) (2,366,492) (6,804,222)
Profit for the year/period
and comprehensive income
attributable to equity
holders of the parent
company 19,443,773 9,430,130 27,497,658
Earnings per share for
profit attributable to
the owners of the parent
during the year
Basic (pence) 4 16.87 8.18 23.86
Diluted (pence) 4 16.72 8.12 23.70
* Adjusted EBITDA is earnings before interest, tax,
depreciation, amortisation, share based payment charges and finance
costs
Consolidated statement of financial position
30 June 2017
30 June 30 June 31 December
2017 2016 2016
GBP GBP GBP
Non-current assets
Property, plant and
equipment 1,252,708 770,496 1,163,103
Intangible assets 42,770,655 43,490,655 43,130,655
Total non-current assets 44,023,363 44,261,151 44,293,758
------------ ----------- ------------
Current assets
Inventories 10,078,203 5,905,188 10,523,754
Trade and other receivables 38,892,367 20,684,370 30,392,649
Cash and cash equivalents 46,579,833 24,705,172 32,963,225
Total current assets 95,550,403 51,294,729 73,879,628
------------ ----------- ------------
Total assets 139,573,766 95,555,880 118,173,386
------------ ----------- ------------
Current liabilities
Trade and other payables 23,052,900 10,674,805 16,128,246
Derivative financial
instruments 152,901 1,680,564 981,071
Corporation tax liability 4,593,637 2,284,925 3,761,308
------------ ----------- ------------
Total current liabilities 27,799,438 14,640,294 20,870,625
------------ ----------- ------------
Non-current liabilities
Loans and borrowings 6,068,993 6,089,369 6,081,932
Deferred tax liability 2,156,081 2,518,959 2,228,081
Total non-current liabilities 8,225,074 8,608,328 8,310,013
------------ ----------- ------------
Total liabilities 36,024,512 23,248,622 29,180,638
------------ ----------- ------------
Net assets 103,549,254 72,307,258 88,992,748
------------ ----------- ------------
Equity attributable
to equity holders of
the company
Share capital 288,102 288,102 288,102
Share premium 53,521,386 53,521,386 53,521,386
Capital Redemption Reserve 93,189 93,189 93,189
Retained earnings 49,646,577 18,404,581 35,090,071
Total equity 103,549,254 72,307,258 88,992,748
------------ ----------- ------------
Consolidated statement of cash flows
For the six months ended 30 June 2017
Period Period Year ended
ended ended
30 June 30 June 31 December
2017 2016 2016
GBP GBP GBP
Operating activities
Profit before tax 24,075,632 11,796,622 34,301,880
Finance expense 27,027 111,794 150,318
Finance income (35,845) (37,299) (79,821)
Depreciation of property, plant
and equipment 182,857 105,288 249,318
Amortisation of intangible
assets 360,000 360,000 720,000
Share based payments 540,581 104,602 497,294
25,150,252 12,441,007 35,838,989
(Increase)/Decrease in trade
and other receivables (8,499,718) (3,888,215) (13,596,495)
(Increase)/Decrease in inventories 445,551 471,485 (4,147,081)
Increase/(Decrease) in trade
and other payables 6,096,484 2,831,140 7,585,088
------------ ------------ -------------
(1,957,683) (585,590) (10,158,488)
Cash generated from operations 23,192,569 11,855,417 25,680,501
Income taxes paid (3,884,473) (1,787,986) (5,047,888)
------------ ------------ -------------
Net cash flows from operating
activities 19,308,096 10,067,431 20,632,613
------------ ------------ -------------
Investing activities
Purchase of property, plant
and equipment (272,460) (286,372) (823,011)
------------ ------------ -------------
Net cash used in investing
activities (272,460) (286,372) (823,011)
------------ ------------ -------------
Financing activities
Interest (paid) (27,027) (103,669) (141,972)
Interest received 35,845 37,299 79,821
Dividends paid (5,427,846) (2,650,541) (4,425,250)
------------ ------------ -------------
Net cash used in financing
activities (5,419,028) (2,716,911) (4,487,401)
------------ ------------ -------------
Net increase in cash and cash
equivalents 13,616,608 7,064,148 15,322,201
Cash and cash equivalents at
beginning of period 32,963,225 17,641,024 17,641,024
------------ ------------ -------------
Cash and cash equivalents at
end of period 46,579,833 24,705,172 32,963,225
------------ ------------ -------------
Notes to the consolidated financial information
For the six months ended 30 June 2017
1. Basis for preparation
The interim financial statements have been prepared in
accordance with the recognition and measurement requirements of
International Financial Reporting Standards (IFRS) and IFRIC
interpretations issued by the International Accounting Standards
Board (IASB) adopted by the European Union.
The accounts have been prepared in accordance with accounting
policies that are consistent with the December 2016 Report and
Accounts and that are expected to be applied in the Report and
Accounts of the year ended 31 December 2017. There are new or
revised standards or interpretations that apply to the period
beginning 1 January 2017 but they do not have a material effect on
the financial statements for the period ended 30 June 2017.
This report is not prepared in accordance with IAS 34, which is
not mandatory. The financial information does not constitute
statutory accounts within the meaning of section 435 of the
Companies Act 2006. Statutory accounts for Fevertree Drinks Plc for
the year ended 31 December 2016 have been delivered to the
Registrar of Companies. The auditors' report on those accounts was
unqualified, did not draw attention to any matters by way of
emphasis and did not contain a statement under Section 498 (2) or
(3) of the Companies Act 2006.
2. Revenue
An analysis of turnover by geographical market is given
below:
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2017 2016 2016
GBP GBP GBP
United Kingdom 33,632,291 15,797,208 44,685,328
Continental Europe 21,964,265 13,367,379 31,114,109
United States of America 13,180,960 9,237,070 21,273,333
Rest of the World 3,163,692 2,180,707 5,164,584
71,941,208 40,582,364 102,237,354
=========== =========== ============
3. Dividends
The interim dividend of 3.01 pence per share will be paid on 8
September 2017 to shareholders on the register on 11 August
2017.
4. Earnings Per Share
Six months Six months
ended ended Year ended
30 June 30 June 31 December
2017 2016 2016
GBP GBP GBP
Profit
Profit used in calculating
basic and diluted EPS 19,443,773 9,430,130 27,497,658
Number of shares
Weighted average number of
shares for the purpose of
basic earnings per share 115,240,896 115,240,896 115,240,896
Weighted average number of
employee share options outstanding 1,023,539 938,112 793,673
------------ ------------ ------------
Weighted average number of
shares for the purpose of
diluted earnings per share 116,264,435 116,179,008 116,034,569
------------ ------------ ------------
Basic earnings per share (pence) 16.87 8.18 23.86
------------ ------------ ------------
Diluted earnings per share
(pence) 16.72 8.12 23.70
------------ ------------ ------------
(1) Underlying operating expenses are defined as administrative
expenses less depreciation, amortisation and share based payment
charges
This information is provided by RNS
The company news service from the London Stock Exchange
END
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