- The tonics mixer declared turnover of £172.9m for the six months ending June
- UK revenues dipped by 6% to £50.8m after the country endured heavy rain
Fevertree Drinks’ sales flatlined in the first half of 2024 as poor weather hurt trade across Britain and Europe.
The tonics mixer declared turnover of £172.9million for the six months ending June, compared to £175.9million during the same period last year.
Revenues in the UK dipped by 6 per cent to £50.8million after the country endured heavy rain over the spring and a cooler-than-average start to the summer.
On ice: Fevertree Drinks’ sales flatlined in the first half of 2024 due to poor weather
Domestic trade was further damaged by softer gin sales to on-trade premises like bars, pubs and restaurants, although Fevertree remained the UK’s largest mixer brand by market share.
Meanwhile, the firm’s European revenues fell by 10 per cent on a constant currency basis to £60.3million as the hit from bad weather was compounded by the timing of some shipments and lower consumer confidence.
By comparison, US-based turnover increased by the same percentage thanks to the growing popularity of its 150ml can among off-trade clients and new contract wins with businesses like Hilton and Marriott Hotels.
Fevertree Drinks shares plunged 9.9 per cent to £7.77 following its trading update, taking its losses over the past 12 months to approximately 40 per cent.
But while its turnover failed to expand, the company enjoyed surging profitability, with adjusted earnings before nasties increasing by 79 per cent to £18.2million and pre-tax profits climbing more than ninefold from £1.4million to £13.2million.
During the previous two years, Fever-Tree’s bottom line took a blow from higher shipping costs and energy price hikes making glass bottle manufacturing more expensive.
In response, it raised prices across key markets, re-tendered glass bottle supplies in the UK and Europe, and agreed contracts with trans-Atlantic freight rates.
Tim Warrillow, chief executive and co-founder of Fever-Tree, said the firm ‘performed well against a tough market backdrop.’
He added that despite recent struggles across the UK and Europe, it had observed a ‘strong improvement in these regions as the summer belatedly arrived.’
Consequently, the group expects its sales to rise by around 7 to 10 per cent in the second half of 2024, leading to full-year revenue growth of about 4 to 5 per cent.
Founded in 2004 by Warrillow and Charles Rolls, Fever-Tree is the world’s largest supplier of premium carbonated mixers, which are sold to at least 75 countries.
Though traditionally a tonic water seller, non-tonic products currently comprise around 40 per cent of the firm’s revenues, supported by high demand for ginger beer and cocktail mixers like Margarita and Bloody Mary.
Russ Mould, investment director at AJ Bell, said: ‘The company’s strategy of moving outside the tonic categories is paying off, given Americans don’t have huge appetite for gin.
‘More broadly, across the business, Fevertree is expanding its soft drinks range to account for lower alcohol consumption among younger people.’
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