Interactive Investor

ii view: confident Fevertree shrugs off profit slump

Driving sales in the USA and with product innovation ongoing. We assess prospects for this AIM listed drinks maker.

26th March 2024 11:47

Keith Bowman from interactive investor

Full-year results to 31 December

  • Revenue up 6% to £364 million
  • Adjusted profit (EBITDA) down 23% to £30.5 million
  • Total 2023 dividend up 2% to 16.64p per share
  • Cash held of £60 million, down from £95 million


  • Expects adjusted profit (EBITDA) for full year 2024 to double

Chief executive Tim Warrillow said: 

"2023 was a year when the Fever-Tree brand once again grew in breadth and depth, with market share gains across the globe.

“Taken alongside softening inflationary pressures, the operational efficiencies we are delivering means I am confident that we are entering 2024 in a very strong position from an operational perspective and have an excellent platform for strong profitable growth going forward."

ii round-up:

Premium soft drinks maker Fevertree Drinks (LSE:FEVR) today pointed to market share gains across all its markets as it detailed 2023 full-year results in line with City forecasts. 

Growing US sales saw it overtake the UK as the company's biggest market, although elevated costs such as those for energy used to produce glass bottles causing a 23% drop in annual adjusted profit (EBITDA) to £30.5 million. 

Shares in the AIM listed company rose 7% in UK trading having come into this latest news down around a tenth over the last year. That’s similar to rival Britvic (LSE:BVIC) and the AIM 50 index over that time. Alcoholic drinks maker Diageo (LSE:DGE) has fallen by close to a fifth. 

Fevertree reiterated its hopes for an improved profit margin during 2024 given factors such as new energy hedged glass contracts and lower Trans-Atlantic freight rates, with adjusted profits expected to about double in 2024.

US sales climbed by close to quarter last year to £117 million, with sales for the year ahead expected to grow at a double-digit pace. UK sales fell 1% to £115 million in 2023, hindered by wet summer weather, but are forecast to resume growth this year.

The total 2023 dividend payment rose 2% to 16.64p per share. Although having fallen in 2023 to £60 million from £95 million, group cash held is expected to rise in the year ahead. 

A trading update is likely to accompany Fevertree's AGM, usually held at the end of May.  

ii view:

Founded in 2004, Fevertree products today include tonics, ginger ales, ginger beer, cola, sodas, and lemonades. Present in more than 85 countries, group customers include hotels, restaurants, bars and cafes (on-trade outlets), as well as supermarkets and off-licenses (off-trade retailers). 

For investors, costs and the importance of energy prices cannot be overlooked. Factors outside of management’s control like the weather and its impact on demand warrant consideration. Overseas sales regularly bring currency headwinds, while a forecast dividend yield of around 1.6% compares to nearly 4% at rival Britvic.

More favourably, management has implemented initiatives to reduce costs, and product innovation is ongoing with non-tonic sales now at around 40% compared to 25% in 2019. Room to expand overseas sales persists, including markets such as Australia, while net cash held gives scope for bolt-on acquisitions should the right opportunity arise.   

For now, and while some caution remains sensible, management expects a big improvement this year which is already being reflected in the share price. A consensus analyst fair value estimate in excess of £12 per share also implies potential for further upside.


  • Diversified geographical sales
  • Strong brand 


  • Pressured consumer spending
  • Potential currency headwinds

The average rating of stock market analysts:


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