Fever-Tree increases expectations after distribution gains

Upmarket mixer brand Fever-Tree has increased its profit expectation, boosted by strong gains in distribution.

The company has issued a trading update announcing profits are likely to be “materially” ahead of expectations in the second half of the year, to 31 December 2015.

Growth has come on the back of strong UK and international sales, it said, with distribution gains coming through earlier than expected.

Co-founder Charles Rolls told the drinks business it was very encouraging. “The premium category continues to develop and with it a move towards mixability. These two trends are very beneficial for us,” he said

The UK had performed particularly strongly, he added, but there were good dynamics across the majority of its markets.

“The dynamic in the majority of markets is reflecting that more premium mixer category that we’ve pioneered is started to have an effect. We are in a sweet spot which we’re seeing across the UK, US and Western Europe,”

Over the summer Fever-Tree rolled out a new 150ml can format into Sainsbury’s and Waitrose and won exclusive listings for its brands with British Airways to supply BA’s First Class and Club World cabins. This followed a strong first half, which saw it notch up on-trade gains after boosting its on-trade team as well as a significant new off-trade listing with Morrisons. Currently, the off-trade accounts for around 40% of the business in the UK.

In July, the company reported revenues up 62% to £24.1m in the six months to 30 June, compared with £14.9m in the same period the previous year. It announced an interim dividend of 78p per share.

The business was founded in 2005 by Charles Roll and Tim Warrillow. In March 2013 the founders sold a 25% stake in the business to Lloyd’s private equity arm, Lloyds Development Capital, and a year ago it launched on the AIM stock market.