Priced at 756.5p at the time of writing, shares in premium mixers pioneer Fevertree Drinks (FEVR:AIM) are down 30% over one year, have shed more than 60% of their value over five years and trade below their 935p Covid low.

Downgrades have dampened investors’ thirst for the tonic water-to-ginger beer supplier, which has seen slowing growth amid intense competition (from sleeping giant Schweppes and others), unhelpful weather and the inflationary squeeze on consumers’ disposable income, with cost pressures also eating into margins.

Fevertree served up (12 September) a return to profit growth for the half to 30 June 2024, but this uptick was largely due to lower glass costs and a cut to full year sales guidance didn’t go down well with investors. This was blamed on a weak first half with a soggy start to the summer in the UK and Europe, where business was also impacted by a subdued consumer backdrop and shipment timings.

More palatable progress from the flavoured sodas-to-cocktail mixers concern included a strong performance in its Rest of the World region and continued double-digit revenue growth in the US, where diversification beyond tonic is paying off given that Americans don’t have huge thirsts for gin. More broadly across the business, Fevertree is expanding its soft drinks range to account for lower alcohol consumption among younger people.

CEO Tim Warrillow highlighted improved trading in July and August and said he was ‘optimistic of an acceleration of growth across the second half of the year’, while net cash of £66 million on the balance sheet means the drinks group expects being able to return surplus capital to shareholders during the 2025.

‹ Previous2024-10-24Next ›