Booming Fever-Tree seals deal in US and upgrades annual profit forecast

Fever-tree makes a number of mixers, including tonic water

Joanna Hodgson24 July 2018

The remarkable growth at Fever-Tree showed no signs of abating on Tuesday as the posh tonics maker inked a new US deal and revealed full-year results will be “comfortably ahead” of expectations.

The Chelsea-headquartered manufacturer said sales and profits will be higher than the £206.9 million and £66.1 million analysts had pencilled in.

Its upgrade update came after first-half revenues soared 45% to £104.2 million, led by demand for mixers in the UK. The interim dividend rises 40% to 4.22p per share.

The firm’s profit margin slipped, but that was largely owing to currency headwinds and investment in the US.

Chief executive Tim Warrillow was upbeat about international growth, and said Fever-Tree has signed an agreement with American spirits company Southern Glazer to be the group’s exclusive distribution partner in the US on-trade. He said: “They will take us to a number of new states.”

Phil Carroll, analyst at Shore Capital, said: “This is a key deal in our view, given the significant co-promotional opportunity and given the distributor will also be selling the main spirits brands.”

Fever-Tree’s growth comes despite concerns the firm could be past its peak.

The shares rose 403.54p, or more than 11%, to 3858.54p. It floated at 134p a share in November 2014.