ii view: Fevertree shares bounce back as sales accelerate

Full-year results to 31 December

• Adjusted revenues up 4% to £373 million
• Adjusted profit (EBITDA) down 16% to £42.4 million
• Final dividend of 11.34p per share
• Total 2025 dividend payment up 2% to 17.31p per share 
• Cash held down 5% to £91 million

Chief executive Tim Warrillow said:

"2025 was a pivotal year for Fever-Tree. The strategic partnership with Molson Coors in the US creates a significant opportunity to take Fever-Tree to the next level in our largest growth market. The transition has progressed well, and it has been particularly encouraging to see that underlying brand momentum has remained strong throughout.

“As we enter 2026, Fever-Tree does so from a position of strength. We have a premium brand with unmatched credentials, an ever-growing market leadership position, upweighted marketing plans, a broader and more relevant portfolio, and scalable platforms in place across our priority markets.”

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ii round-up:

Premium soft drinks maker Fevertree Drinks (LSE:FEVR) today detailed accelerating sales growth, with profits for 2026 currently in line with City forecasts. 

Adjusted full year 2025 revenue rose 4% to £373 million, though sales grew 5% in the second half, aided by further market share gains. Adjusted profit (EBITDA) fell 16% to £42.4 million, hindered by a £2.8 million provision taken in relation to a possible UK government bottle recycling levy currently being disputed in the courts. 

Shares in the AIM-listed company gained 6% in UK trading having come into these latest results down 8% so far in 2026. That’s similar to the fall in the AIM All-Share index year-to-date. Spirits and Guinness maker Diageo (LSE:DGE) is down 14% so far this year. 

Fevertree’s business now includes a distribution agreement with beer maker Molson Coors across the US, Fevertree's biggest market, with costs to establish the arrangement proving a drag on annual profits. US sales adjusted for currency moves rose 6% to £132 million over the full year. 

UK sales dipped 2% to £108 million, hit by challenged pub and bar sales, particularly during the first half, although countered by 5% growth in off-trade, or store sales over the second half. 

Elsewhere, European sales improved 2% to £95 million, aided by French and Benelux demand, with the rest of the world climbing 22% to £38 million, driven by sales across Canada and Australasia. 

A final dividend of 11.34p per share, payable to eligible shareholders on 26 June, takes the total payment for 2025 up 2% to 17.31p per share. A previously announced share buyback of £30 million for 2026 is underway.  

The drink maker's AGM and accompanying trading update are likely to be held early to mid-June.   

ii view:

Coming to the UK stock market in 2014, Fevertree today produces tonic waters, sodas, gingers and colas, as well as cocktail mixers for drinks like Margaritas, Passion Fruit Martinis and Mojitos.   

For investors, uncertainty in relation to the UK government’s Extended Producer Responsibility (EPR) levy regarding its pub (on trade) bottle disposal during 2025 is an overhang given a pending court decision. Exports to the US remain subject to trade tariffs until partner Molson Corrs can begin production in the country itself over the medium term. Sales in its UK home market remain hindered by broader headwinds for the hospitality sector itself, while rising energy costs given the war in the Middle East could now feed into production costs for items such as bottles. 

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On the upside, the group’s partnership with Molson is extending distribution across the US, which has become its biggest market. Product innovation is fuelling sales away from tonics, with total non-tonic revenues of 45% in 2025, up from 25% in 2019.  A broad consumer trend to reduce alcohol intake and potentially aided by increased soft beverage mixers, warrants consideration, while scope for further geographical expansion remains.

In all, increased headwinds such as those relating to consumers and production costs given soaring energy prices offer room for caution. That said, growth potential and a consensus analyst fair value estimate above 950p per share will likely keep investors interested.   

Positives: 

• Diversified geographical sales
• Gaining market share

Negatives:

• Battling US trade tariffs
• Potential currency headwinds

The average rating of stock market analysts:

Hold