Mixer firm Fever-tree targets fizzing US activity following ‘encouraging’ H1

● Total sales see double-digit growth but UK market hampered by poor weather

Mixer-maker Fever-tree fizzed to sales and earnings growth in the first half of the year, despite being weighed down by gloomy UK weather.

Thecompanysawsalesjump by 13 per cent to £117.3 million in the six months to June, as it was lifted by fast-growing global markets. UK sales, which account for more than half of its total business, rose by only 5 per cent as the brand was affected by “unseasonably poor weather”.

A damp spring and wet start to summer has hit other soft drinks business, including Irn-bru maker AG Barr, which warned over profits last week.

However, Fever-tree founder and chief executive Tim Warrillow said the drinks business has strengthened its market position.

The company said it is “very well-positioned” for further growth in the UK as it builds share across the mixer market, so it is not just reliant on the popularity of gin and tonics.

Gross profit for the period rose by a tenth to £60m, while adjusted earnings rose by 8 per cent to £36.7m. It held firm on its profit outlook for the year.

Fever-tree was buoyed by solid growth in the US, where its sales jumped by 31 per cent to £19.8m. It said it has been very pleased with its progress in the US since a restructuring last summer.

Costs also rose in the period, with the price of glass up and storage costs in the UK increasing due to higher levels of inventory ahead of Brexit.

Warrillow said: “It has been an encouraging first half for the group, with growth across all our four regions, most notably in the US, where we have made significant distribution gains and operational progress. While we have not been immune to the impact of the unseasonably poor weather in the UK, we have further strengthened our market leadership position within the UK and have seen positive momentum in Europe and the rest of the world, reflecting our increasingly global footprint.

“Whilst we remain mindful of the tough comparators over the remainder of the summer in the UK, the board anticipates that the outcome for the full year will be in line with its expectations.”

But Sophie Lund-yates, equity analyst at Hargreaves Lansdown, commented: “To satisfy expectations, Fevertree needs to see a taste for tonic take off Stateside, and there’s no guarantee that will happen.”

However, she praised the company’s “stellar” business model, outsourcing the majority of its operations. “With the potential for short-term disruption arising from Brexit, extra agility is no bad thing.”