18th Mar 2021 11:49
(Alliance News) - Fevertree Drinks PLC on Thursday reported a sharp fall in annual profit in 2020 but upped its shareholder payout as the company guided for solid growth in 2021 as easing restrictions allow pubs and restaurants to re-open.
Shares in the drink mixers firm were 9.1% lower in London on Thursday at 2,305.00 pence each.
For 2020, Fevertree recorded pretax profit of GBP51.6 million, down 29% from GBP72.5 million in 2019.
Revenue slipped 3% to GBP252.1 million from GBP260.5 million. In the UK, revenue fell 22% to GBP103.3 million but in the US revenue improved 23% to GBP58.5 million. In Europe, revenue grew 1% to GBP65.3 million, and in the Rest of World revenue rose 58% to GBP25.0 million.
Administrative expenses rose to GBP65.0 million in 2020 from GBP59.3 million in 2019.
Fevertree upped its total dividend in 2020 by 4% to 15.68 pence from 15.08p in 2019. The increased payout, the company said, reflects its financial strength, confidence in the business, and its strong cash generation.
The premium tonic water maker ended 2020 with net cash of GBP143.1 million versus GBP128.3 million the year before.
Co-Founder & Chief Executive Tim Warrillow said: "Although 2020 presented many unforeseen challenges, our resilient performance highlights the strength of the business and the Fever-Tree brand which is testament to the proactive and entrepreneurial way our team and our partners responded.
"Our performance in the Off-Trade was especially strong, exceeding our expectations across all our regions. Numerous periods of lockdown during the year encouraged increased consumer interest in premium spirits and stimulated excitement about mixing drinks at home, attracting more households and new consumers to the Fever-Tree brand than ever before. Consequently, we have increased our penetration in the UK, driven value share gains in the US, and Europe, and gained real traction in Canada and Australia."
Looking ahead, Fevertree noted the continued uncertainty around the pandemic - and the wait for the vaccine rollout to lead to the reopening of pubs and restaurants - will continue to hurt its On-Trade business.
"The first months of the year have seen a continuation of very positive trading in the Off-Trade across all our regions. While we would expect some of the Off-Trade demand to switch to the On-Trade as it begins to re-open, we estimate that the Off-Trade will remain strong," the company added.
Fevertree believes it remains well placed across its regions and channels as the gradual easing of restrictions occurs and we expects revenue growth of between 12% to 16% in 2021.
By Paul McGowan; [email protected]
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