Growth in demand for gin tops up Fever-tree’s sparkle

THE rapid growth of premium drinks brand Fever-tree shows no sign of slowing as the tonic maker upgraded its profits forecasts following a 77pc spike in revenues.

Fever-tree’s share price is 15 times higher than when the company floated in late 2014, with shares spiking a further 17.9pc to £20.58 following the publication of its first-half results yesterday.

It was last year’s best-performing stock on London’s junior Aim market and has consistently smashed expectations as it capitalises on the remarkable growth in demand for gin.

Tim Warrillow, the firm’s chief executive, said he was “delighted”, particularly with the company’s performance in the UK, where it enjoyed growth of 113pc in the first half of the year.

Overall, revenue climbed 77pc to £71.9m, compared to £40.6m in the first half of 2016. “The really encouraging thing is that we are seeing growth across all regions,” said Mr Warrillow. “In the UK, [the mixer category] is now the fastest-growing soft drink category, growing at 17pc in the first half of the year. And the statistic we are proudest of is that Fever-tree contributed to 99pc of that growth, so it is very encouraging.” Fever-tree’s Ebitda (earnings before interest, taxes, depreciation and amortisation) rose more than 100pc, from £12.4m to £25.2m.

In continental Europe, revenues rose from £13.4m last year to £22m, while US revenues climbed from £9.2m to £13.2m.

“We have always felt very strongly that gin and tonic as a movement will never be a fad,” said Mr Warrillow. “It is fundamentally a great drink that is well loved, and all this is an improvement on the gin and tonics that were available before.

“We have a whole world of fantastic different gins out there and now really good mixers to go with it.”

Earlier this year, Charles Rolls, one of the company’s founders, sold a stake of around 4pc in the group for more than £70m.

The company has been suggested as a potential takeover target for drinks giants, but Mr Warrillow says it is just focused on further growth at the moment.

“We have had this mooted from the start of our life on the public market, that they think there will be interest from spirit companies, beer companies and soft drink companies,” he said.

“I am sure there is interest, but that is not something we are focused on.

“We are really focused on this growing opportunity that we see ahead of us.”