8th Sep 2020 11:12
(Alliance News) - Fevertree Drinks PLC on Tuesday said it put in a "resilient" performance in the first half of 2020 as government-imposed lockdowns dried up on-trade sales.
The producer of premium drink mixers pretax profit narrowed by 38% in the six months ended June 30 to GBP21.7 million from GBP35.0 million a year prior.
Revenue declined by 11% to GBP104.2 million from GBP117.3 million a year before.
UK and European revenue both dropped by 20% and 29% respectively year on year. In the UK, revenue decreased to GBP48.3 million from GBP60.7 million and in Europe it decreased to GBP20.5 million from GBP29.0 million, year on year.
Revenue in the US however increased by 39% to GBP27.4 million from GBP19.8 million a year prior.
The on-trade, which represents approximately 45% of the company's revenue, was severely impacted as lockdowns led to closures in most its territories since March, with only limited re-openings prior to the end of the period. The company that it is important to note that these closures will only have a short-term impact.
Fevertree has subsequently had to shift towards promoting off-trade. Specifically, the company noted, there has been a movement towards long mixed drinks at home, catalysed by lockdowns, and believes that it is "very well placed" to continue to capitalise on this "significant" long-term opportunity.
The company declared an interim dividend of 5.41 pence per share, up 4% from 5.20 pence year on year.
The company said: "While we are not immune to the current situation, the group is financially well placed and its unique asset light outsourced business model provides it with the agility to adapt to and mitigate the challenges arising from the current circumstances.
"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."
Fevertree expects its full-year revenue to be between GBP235.0 million and GBP243.0 million - conditional on there being no further significant lockdowns. Revenue was GBP260.5 million in 2019.
Chief Executive Tim Warrillow said: "We have had an encouraging start to the second half of the year and, while we certainly aren't immune to the ongoing challenges of Covid-19, our performance and our investments so far this year, coupled with the growing interest in long mixed drinks, gives me confidence that we will exit the crisis in an even stronger position than we entered it."
Fevertree Drinks shares were down 2.2% at 2,073.00 pence each on Tuesday morning in London.
By Greg Roxburgh; [email protected]
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