Fever-Tree loses its fizz as growth slows to 5pc
THERE’S a lot of pressure that comes with being a stock market darling.
Since Fever-Tree launched in 2005 it has taken the drinks market by storm amid booming demand for premium tonic and other mixers.
Having listed at 134p in 2014, the shares peaked at 3956p last year.
But the AIM stock has been in decline and fell another 9.6pc, or 221p, to 2079p, after half-year figures that disappointed investors despite a 7pc rise in profit to £35m. Total revenues rose 13pc to £117m between January and June – well below the 45pc growth rate in the same period last year.
In the UK, sales growth slowed from 73pc in the first half last year to just 5pc. Bosses admitted that a wet spring dampened UK sales.
In Britain, Fever-Tree growth is due to plateau because it already has links with many pubs and bars, leaving it with few pockets of the market to conquer.
Analysts will also be keeping a close eye on its profit margins, which fell 1.3 percentage points as it ramped up overseas investments and counted the costs of the UK sugar tax.
Shares in Cardiff-based IQE rocketed 25.6pc, or 13.2p, to 64.8p, after it struck an optimistic note about the fallout from the USChina trade spat. Supply chains are being reworked and IQE has the all-clear to supply a customer in Asia without getting caught up in Chinese trade restrictions.
Meanwhile, profits slumped at trading firm IG Group after a crackdown on risky bets.
IG made a £194.3m profit in the year to May, down 31pc on a year earlier, after regulators in Britain and Europe took action against so-called contracts for difference. These allow customers to bet on sharp moves in the market, but while it can lead to huge gains if they guess right, it exposes them to massive losses if they do not.
New limits on how much can be won or lost by punters have taken their toll on IG. But it seems traders were prepared, as shares were flat at 580p.
Profits were almost wiped out at convenience store chain McColl’s, falling to £200,000 in the six months to May 26 compared with £2.3m in the same period of last year. Sales grew 0.1pc, mostly due to store closures, while it said the collapse of supplier Palmer & Harvey last year is still hitting margins. Shares fell 5.4pc, or 3.8p, to 66.2p.
Profits dived 38pc to £37m at soap maker PZ Cussons in the year to the end of May, as it wrote off £ 24.8m against brands in Nigeria and Australia. Revenues fell 6.8pc to £689.4m. It closed down 1.1pc, or 2.5p, at 224.5p.
Whitbread shares suffered after Bernstein Research and Merrill Lynch downgraded its stock and gave it a 4200p target price. It ended down 3pc, or 142p, at 4543p. The FTSE 100 index had a cheerier day as it hit its highest level in more than two weeks, rising 0.6pc, or 41.93 points, to 7556.86, while the FTSE 250 lifted 0.5pc, or 104.33 points, to 19,752.34. City buyout firm Melrose Industries was the top riser after betterthan-expected results at French car parts maker Faurecia.
Shares in Melrose, which bought automotive engineer GKN in an £8bn takeover last year, climbed 5.1pc, or 9.3p, to 192.9p. Southend Airport- owner Stobart Group rose 1pc, or 1.2p, to 117.6p, after an attempt by former chief executive Andrew Tinkler to unseat new boss Warwick Brady and another director, fell flat at the annual general meeting. Profits at marine insurer Beazley almost tripled to £134m as the revenue from insurance policies rose 12pc. Boss Andrew Horton says marine insurance prices will rise after the capture of Britishflagged ship, the Stena Impero, by Iranian forces last Friday. Shares rose 5.2pc, or 28p, to 564.5p.