Fever-Tree saw its sales recover in the second half of last year as it sought to regain momentum after a soggy first half.
Total revenue rose 4% to £364m on a constant currency basis, following a strong second half in which sales were up 7%.
Its earnings before interest, taxes, depreciation, and amortisation grew 66% to £50.7m, broadly in line with analysts’ expectations. Fever-Tree said this was due to operational improvements such as the localisation of production.
A poor performance in the first six months of the year had seen Fever-Tree’s share price fall 10% after it downgraded its revenue growth expectation from 10% to between 4% and 5% for the year.
In January, Fever-Tree entered a long-term tie-up with Molson Coors that will see the latter produce, distribute, and sell the carbonated drinks brand across the US. Co-founder and CEO Tim Warrilow said it was Fever-Tree’s “most significant strategic step to date”.
Fever-Tree shares jumped 20% the day the deal was announced.
Fever-Tree followed on the good news for investors this week by announcing a further £29m in share buybacks that reflects the reduced cash needs and improved cash generation since the deal.
Anubhav Malhotra, an analyst at Panmure Liberum, said the group could return up to £175m of excess cash – 34% of its market cap – over the next five years.
Fever-Tree is expecting 2025 to be a “transition year” for the US business and therefore said it was “comfortable” with consensus expectations of low single-digit group revenue growth and around 12% adjusted EBITDA margin for the year.
Its US sales were the already the main driving force behind the group’s growth in the second half of last year, as sales in the country rose 9% to £128m. This was due to an expanded presence in the off-trade that offset a more subdued spirit environment in the country.
However, it is still struggling in the UK, where sales fell by 3% to £111.1m. Fever-Tree attributed this to low consumer sentiment and a declining gin category. European sales were also down by 2% to £92.7m.
It has looked to diversify its portfolio by launching several non-tonic products and these now made up around 45% of its global sales, the company said.
Warrillow said the brand performed well in 2024 despite the subdued consumer environment. “Across every key region, we are gaining market share, with more consumers discovering, enjoying, and becoming loyal to Fever-Tree each year across a growing variety of drinking occasions.”
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