ii view: Fevertree shares get fresh boost from half-year results

First-half results to 30 June

• Revenue flat at £172 million
• Adjusted profit (EBITDA) up 1% to £18.4 million
• Interim dividend up 2% to 5.97p per share 
• Cash held up 97% to £130 million

Chief executive Tim Warrillow said:

“The transition of the business to Molson Coors is progressing well and despite the complexity of such a transition, it has been particularly encouraging to see the underlying US momentum has been maintained, a real testament to the hard work of both teams as well as the strength of the Fever-Tree brand.

“Together with the operational progress we are making and the strong performance we have seen over the summer months, we are well placed for both the second half of the year and to capture the long-term opportunities ahead."

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ii round-up:

Premium soft drinks maker Fevertree Drinks (LSE:FEVR) today extended its share buyback programme given increased cash generation following the start of its partnership with drinks giant Molson Coors Beverage Co Shs -B- Non-Voting (NYSE:TAP) in the US. 

Fevertree's £130 million cash pile, up from £66 million a year ago, underpins a £30 million extension of its existing £100 million share buyback programme into 2026. A 6% increase in US sales countered a same size fall in the UK to leave first-half sales to late June flat at £171 million. Adjusted profit improved 1% to £18.4 million.

Shares in the AIM listed company rose 7% in UK trading having come into these latest results up 15% so far in 2025. The AIM All Share index is up 6% year-to-date. Spirits and Guinness maker Diageo (LSE:DGE) is down by a quarter in 2025. 

Fevertree’s carbonated drinks, regularly used as mixers with alcoholic spirits, are supplied to customers including hotels, restaurants, bars and cafes or on-trade outlets, as well as supermarkets and off-licences, so-called off-trade retailers.

US sales of £62.4 million, up from £60.4 million a year go, were aided by an outpacing of retail sales compared to the broader market. Signing its partnership with Molson in January, a move into its national network of distributors began in June and is progressing well.

UK sales of £48.1 million was down from £50.9 million. Performance was hindered by broader headwinds for the hospitality sector, but helped by ongoing growth in non-tonic sales, which now account for 30% of UK sales.  

Elsewhere, European sales fell 1% to £44 million, hit by weakness in Germany, while Rest of the World sales rose to £16.5 million from £14.9 million, pushed by 12% growth in Australia.

An interim dividend of 5.97p per share, payable to eligible shareholders on 17 October, is up 2% from a year ago.  

Full-year results to 31 December are likely to be announced late March.

ii view:

Launched in 2005 and coming to the stock market in 2014, Fevertree is today responsible for tonic waters, sodas, gingers, lemonades and rosé spritz. Employing over 350 people, the beverage maker's products are distributed in over 85 countries. Geographically, the USA generated its biggest slug of sales during 2024 at 35%, followed by the UK at 30%, Europe 26%, and the Rest of the World the balance of 9%. 

For investors, exports to the USA 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 affecting the hospitality sector. Some expenses and sharing of profits with US partner Molson are now being made. The impact of the weather on demand should not be overlooked, while costs such as those for glass bottles and freight charges remain variable. 

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To the upside, the partnership with Molson is boosting cash, with the share buyback extended and the shares on a forecast dividend yield of around 2%. A broad consumer trend to reduce alcohol intake, potentially aided by increased soft beverage mixers, warrants consideration. Product innovation is fuelling non-tonic sales, with total global sales of 45% during this latest period versus 25% in 2019, while scope for further geographical expansion persists.

In all, and despite ongoing risks, early promise from the Molson partnership is likely to see fans of this premium soft drinks maker remain supportive. 

Positives: 

• Diversified geographical sales
• Increased net cash held

Negatives:

• Pressured consumer spending
• Potential currency headwinds

The average rating of stock market analysts:

Hold