Fever-Tree commits to London listing as shares hit eight-year low

The boss of Fever-Tree remains committed to keeping the premium tonic maker listed in London, even as its share price languishes and the biggest slice of revenue now comes from the United States.
Tim Warrillow, who launched the high-end mixer brand 20 years ago with Charles Rolls, said that there were no plans to join the exodus of companies from the FTSE to Wall Street.
He said: “We’ve had a number of approaches about that, but we’re British and very proud to be. We’re very happy where we are.”
The commitment to its home market came as the mixers group said that a dismal start to the British summer had taken the shine off sales. Announcing first-half results, the company lowered expectations for annual revenue growth to 4-5 per cent, from a previously guided 10 per cent in March.
Fever-Tree also cut its 2023 annual forecast at the same stage last year by 15 per cent and took a £3.3 million hit on its US division from a production issue.
The update sent shares in Fever-Tree down by 100p, or 11.6 per cent, to an eight-year low at 762½p on the Aim index. The stock remains well below the highs of almost £40 achieved before the pandemic and cost-of-living crisis shuttered pubs and wallets.
Fever-Tree now sells its mixers in 95 countries, with America, Canada, Australia and Germany among its biggest markets. The United States overtook the UK to become the biggest market by revenue last year.
It has more recently branched out into flavoured sodas, adult soft drinks and cocktail mixers, the most recent being a mixer for mojito cocktails. Non-tonic products now account for more than 40 per cent of global revenues, driven by strong growth in sales of ginger beer.
Asked whether the agreed takeover of Britvic by Carlsberg might point to a similar fate for Fever-Tree, Warrillow said: “It’s clearly not what we’re angling for. But what is very interesting for us is the wider distribution opportunities.”
In the first half, Fever-Tree reported a 2 per cent increase in revenue to £170.6 million, with the UK down 6 per cent to £50.9 million and Europe down 12 per cent to £44.5 million. The US was up 7 per cent to £60.3 million, and revenues for the rest of the world were 57 per cent higher at £14.9 million.
Underlying earnings in the first half jumped by 79 per cent to £18.2 million, and the company declared a dividend up 2 per cent at 5.85p per share.
Warrillow, 49, who remains chief executive, said the group had “performed well against a tough market backdrop”, notably in the US and rest of world regions but the first-half performance in the UK and Europe had been affected by unseasonable weather at the start of summer. The on-trade — bars and restaurants — was also hit by low consumer confidence.
However, he said that the situation had improved strongly “as summer belatedly arrived”, adding: “Whilst the first half was challenging, we are controlling the controllables. We’re optimistic of an acceleration of growth across the second half of the year and have seen a much more positive trading performance in July and August.”
“Fevertree is doing the right things, gaining share and delivering on gross margin recovery, in a difficult market,” Investec analyst Matthew Webb said.