TIDMFEVR
RNS Number : 0791M
Fevertree Drinks PLC
12 September 2023
Fevertree Drinks plc
FY23 Interim Results to 30 June 2023
This announcement contains inside information
FY23 Interim Highlights
-- Revenue growth of 9% year-on-year, with a standout
performance in the US of +40% growth (+32% constant currency) which
is now the Group's largest region by revenue contribution.
-- Strong market share performance globally, achieving our
highest ever market share by value in the UK.
-- 670 bps reduction in gross margin is in-line with our
expectations, driven by product cost headwinds, partially offset by
efficiency projects.
-- Adjusted EBITDA margin of 5.8% reflects the lower gross
margin and phasing of overheads, maintaining our strategy of
investing for growth. We therefore expect to drive an improvement
in the second half of the year.
-- GBP3.3m exceptional item relating to a production issue in
the US. The issue did not impact customer relationships or our
ability to supply the market.
-- Recommending an interim dividend of 5.74 pence per share, an increase of 2% year-on-year.
GBPm H1 FY23 H1 FY22 Change
---------------------------- -------- -------- ---------
Revenue
UK 53.8 53.5 1%
US 56.1 40.1 40%
Europe Fever-Tree brand
revenue 50.5 46.5 9%
Europe total* 56.1 52.3 7%
ROW 9.6 15.0 (36)%
Total* 175.6 160.9 9%
Gross profit 53.8 60.1 (11)%
Gross margin 30.7% 37.4% (670)bps
Adjusted EBITDA [1] 10.2 22.0 (54)%
Adjusted EBITDA margin 5.8% 13.6% (780)bps
Diluted EPS (pence per
share) 1.20 12.08 (90)%
Dividend (pence per share) 5.74 5.63 2%
Cash 75.8 100.0 (24)%
---------------------------- -------- -------- ---------
*includes GDP's portfolio brands
Strategic highlights
-- Very strong revenue growth in the US across all categories,
extending our leadership position in Tonic Water and Ginger Beer,
with continued positive contribution from our product
innovation.
-- Fever-Tree extended its clear market leadership in the UK
with its highest ever value share and encouraging initial
performance from our range of cocktail mixers and adult soft
drinks.
-- Many of the Group's European markets performed well against
strong comparators, growing our leadership position to two thirds
of the premium mixer category across the region.
-- First half revenue for ROW region reflects a one-off
inventory buy-back as part of the transition to our new subsidiary
set-up in Australia, positioning us to further drive the
opportunity ahead in that market.
-- Good progress on key operational initiatives and softening
inflationary headwinds underpins our confidence in significant
year-on-year margin recovery in 2024.
Outlook and guidance
Whilst we expect to deliver continued good growth in FY23, most
notably in the US, our sales performance since period-end has been
impacted by the unseasonably poor weather in the UK which has
subdued the wider category over the key summer trading period.
Therefore, alongside the impact of the inventory buyback in
Australia, we now expect to deliver FY23 revenue of between GBP380m
to GBP390m.
We are making good progress with the mitigation of inflationary
cost challenges and are reiterating our gross margin guidance of
31% to 33% for FY23. We remain committed to investing in the
substantial future opportunity for the brand across our regions and
expect overheads to be in the range GBP88m to GBP92m resulting in
FY23 EBITDA guidance range of c.GBP30m to GBP36m.
Looking ahead to 2024, due to a combination of softening
inflationary headwinds and the benefit of the actions we are taking
this year, we are confident of delivering significant margin
improvement, setting up the Group for strong, profitable growth
going forward. Reflecting the momentum in our key growth regions,
we are comfortable with current market revenue growth rate
expectations for 2024 and expect to deliver an improved FY24 EBITDA
margin of c.15%, which is ahead of current market expectations.
Tim Warrillow, CEO of Fever-Tree, commented:
"Fever-Tree delivered good revenue growth in the first half of
2023. We had a standout performance in the US where the brand
continues to go from strength to strength, extending our leadership
position in the Tonic and Ginger Beer categories. This reflects how
well established the brand is becoming in the world's largest
premium spirit market.
In the UK, despite the challenging macro-economic conditions, we
ended the first half with our highest ever value share of 45%,
which is over 50% higher than our nearest competitor. I have been
hugely encouraged by the response to our new innovation,
specifically our range of cocktail mixers and adult soft drinks, as
shown by the significant and growing listings across both channels.
Our European business is growing in depth and breadth and the
recent step changes we have made in our route to market across
Australia, Canada and Japan reflect the growing potential we see in
our Rest of World region.
Whilst the vagaries of the British summer weather have impacted
sales since period end, contributing to our revised guidance for
the full year, the Group still expects to deliver good growth in
the reminder of 2023. Looking ahead to 2024, with a stronger global
market position than ever before, a broader product portfolio and
our confidence in delivering significant margin improvement, the
Group is well set up for strong, profitable growth going
forward."
There will be live audio webcast on Tuesday 12(th) September
2023 at 10:00am BST. The webcast can be accessed via:
Fever-Tree FY23 Interim Results webcast
For more information please contact:
Investor queries
Ann Hyams, Director of Investor Relations I
ann.hyams@fever-tree.com I +44 (0)7435 828 138
Media queries
Oliver Winters, Director of Communications I
oliver.winters@fever-tree.com I +44 (0)770 332 9024
Nominated Advisor and Broker - Investec Bank plc
David Flin I Alex Wright I +44 (0)20 7597 5970
Corporate Broker - Morgan Stanley & Co, International
plc
Andrew Foster I Jessica Pauley I +44 (0)20 7425 8000
Financial PR advisers - FGS Global
Faeth Birch +44 (0)7768 943 171; Anjali Unnikrishnan +44 (0)
7826 534 233
This announcement contains inside information. The person
responsible for arranging the release of this announcement on
behalf of the Company is Andy Branchflower, CFO
Strategic update
GBPm H1 FY23 H1 FY22 change constant currency
change
-------- --------
Revenue
UK 53.8 53.5 1%
US 56.1 40.1 40% 32%
Europe Fever-Tree
brand revenue 50.5 46.5 9% 5%
Europe total* 56.1 52.3 7% 4%
ROW 9.6 15.0 (36)% (35)%
Total* 175.6 160.9 9% 6%
-------------------- -------- -------- ------- ------------------
Fever-Tree delivered revenue of GBP175.6m, an increase of 9%
year-on-year, with particularly strong growth in the US driven by
continued distribution gains and innovation. Whilst our UK sales
have been impacted since period end by the effects of the
unseasonably poor weather on the wider category, the first half saw
the brand continue to grow its market share and deliver very
encouraging early signs from the launch of our range of cocktail
mixers as well as increasing distribution of our adult soft drinks.
Good momentum continues in Europe, and whilst the Rest of World
revenue was impacted by the one-off inventory buyback as part of
the change in distribution model in Australia, this is not
reflective of underlying performance or the confidence we have in
the region moving forward.
As well as our focus on topline growth, we are continuing to
take proactive steps to mitigate cost headwinds and drive
efficiencies. As previously announced, whilst we are experiencing
significant margin dilution in the current year, most notably due
to materially elevated glass costs, we are confident that we will
see margin improvement in the second half and are reiterating our
gross margin guidance for the full year. Furthermore, the steps we
are taking this year, alongside softening inflationary headwinds,
will ensure that we drive material margin improvement in 2024.
We have recognised a GBP3.3 million exceptional cost in the
first half results which relates to issues during US production
which arose towards the end of the first half. This was ring-fenced
to specific production batches and has not impacted customer
relationships or our ability to supply the market. Going forward,
we are confident that our US supply chain strategy is robust with
appropriate flexibility and contingencies in place.
We are very pleased with our underlying strategic performance.
Innovation remains the cornerstone of the brand and is driving
growth across all our regions. Adult soft drinks are gaining
distribution and starting to contribute to total growth in the UK,
cocktail mixers are showing positive signs following their launch
in the UK and US earlier this year, and Blood Orange Ginger Beer
has been our fastest growing new product since its US launch in
Autumn 2022, extending the category into exciting new flavours. We
continue to evolve our route to market to capture current and
future growth markets. Over the past twelve months we have
announced the set-up of our own subsidiary operation in Australia
and new distribution partnerships in Japan and Canada.
The Group has continued to make good progress across its
sustainability initiatives in the first six months of 2023. We have
finalised our UK product carbon footprint for 2022 which has shown
a reduction in both absolute and per litre emissions, reflecting
our on-going focus on reducing the impact our products have on the
environment throughout our supply chain.
2023 also marks the tenth year of our partnership with Malaria
No More UK. The fight against malaria remains at the very heart of
the Fever-Tree brand given the role quinine plays in anti-malaria
medication and the fact many of the communities where Fever-Tree
sources its ingredients also experience the devastating effects of
malaria. We are proud to have supported the incredible work
undertaken by Malaria No More UK for a decade and are focused on
sponsoring initiatives that are making a difference to those
communities most impacted by the disease.
UK I Broadening the portfolio and extending our leadership of
the mixer category
Fever-Tree delivered UK revenue of GBP53.8m in the first half of
the year, an increase of 1% year-on-year, driven by a slight
increase in On-Trade revenue and flat Off-Trade revenue. Despite
the challenging macro-economic environment, crucially, we have
extended our clear leadership position of the UK mixer category,
with c.45% value share across the On- and Off-Trade combined, over
twenty times the nearest premium mixer brand, and over 50% higher
than Schweppes [2] .
Fever-Tree is outperforming the mixer market in the On-Trade,
growing value share by more than 5% since 2019 to over 53% [3] of
the total On-Trade mixer value, our highest ever share. As the
number one mixer brand in the UK, Fever-Tree is best placed to
capitalise on continued spirit category growth and premiumisation,
and we are increasingly engaging with spirits companies through
co-promotions across a greater number of spirit and mixer
occasions, with our broad, diversifying portfolio.
In the Off-Trade, Fever-Tree's sales were flat year-on-year as
we lapped tough comparators during the first quarter. The brand has
maintained its number one value share position, c.1% ahead of
Schweppes and significantly ahead of the next largest premium brand
[4] . In fact, Fever-Tree now accounts for over 90% of total
premium mixer sales in the Off-Trade(5) , highlighting our strong
position in this category.
Over the last year we have extended into two exciting adjacent
categories. Firstly, adult soft drinks, where we have established
over 9,000 points of distribution at UK retail, delivering value
growth of 55% in the first half of the year [5] as we outperform
established brands to grow our share within the category.
The first half of the year also saw the launch of our range of
cocktail mixers. The initial response has been highly encouraging
and we have already secured over 3,000 points of distribution
across Tesco, Sainsbury's, Waitrose, as well as a good presence on
Ocado, and a significant number of listings with some of our
largest On-Trade customers, including Mitchells & Butlers and
Young's.
US I Innovation and distribution gains driving growth
Fever-Tree's revenue for the first half of the year increased by
40% to GBP56.1m (+32% at constant currency). The brand's strong
growth has been driven by gains across all categories and we have
extended our number one position in the Tonic Water and Ginger Beer
categories in the first half of the year.
Fever-Tree is seeing strong growth in the On-Trade, which is now
back, post-COVID, to almost 20% of total US sales. The brand
continues to win new mandates and distribution across hotels,
dining, sports and nightlife venues, contributing to a 21% increase
in our number of On-Trade accounts as we extend our position as the
premium mixer of choice in this channel.
Fever-Tree also performed well in the Off-Trade during the first
half of the year. Our retail sales increased by 23% year-on-year
and by 200% over the last four years, compared to 2019 [6] . Value
growth is being driven by Tonic and Ginger Beer in absolute terms,
as we outpace these two categories, as well as being the fastest
growing Grapefruit and Club Soda brand. Consequently, we continue
to gain share of the total mixer category, extending our position
as the clear premium market leader and driving category growth.
Our multiple drinks strategy has driven our innovation agenda
and this remains a critical part of our US growth as we leverage
our consumer insights to ensure we are creating mixers to elevate
everyday drinking experiences with fast-growing, premiumising
spirits. The launches of both our Sparkling Sicilian Lemonade,
aimed at Bourbon and Vodka occasions, as well as our Blood Orange
Ginger Beer to extend this popular mixer category, have
demonstrated the power of our unique approach to innovation.
To further expand our drinks strategy, we have also extended our
range into the non-carbonated mixer category, launching Fever-Tree
Margarita and Bloody Mary in the first quarter of the year. We have
already seen the positive impacts of this, with very positive
sell-in of Margarita and Bloody Mary, leading to promising
conversations with retailers about further distribution
opportunities. The non-carbonated mixer category is a significant
long-term opportunity for the brand due to its size, level of
premiumisation, brand fragmentation, and similar consumer profile
to carbonated mixers.
Alongside innovation and distribution gains, the business is
focused on expanding our consumer brand awareness. In the On-Trade,
we have focused on making the brand more visible on menus, and
creating our own perfect serve menus, in addition to sponsoring
five Fever-Tree bars across the country. At retail, we have become
Category Captain at multiple national retail chains, enabling
enhanced displays, better activations and thus supporting our many
spirit partnerships.
Europe I Growing value share and diversifying the portfolio
The Fever-Tree brand delivered 9% revenue growth across our
European markets, slightly ahead of our total European growth of
7%, which includes GDP portfolio brands (4% at constant currency).
Italy and France continue to outperform, with good growth also
coming from the Nordics during the first half of the year as we
extend our distribution and increase our brand awareness.
Fever-Tree continues to drive premiumisation across Europe. In
the Off-Trade, Fever-Tree now has over two-thirds value share of
premium mixers and continues to gain share from other premium
brands [7] . We are also increasing our share of the total mixer
category, with a good performance in France, Norway and Italy,
where we have delivered absolute growth of over 20% and gained
between one and four percentage points of value share in these
markets(7) .
The On-Trade started the year well as the market annualised the
first quarter of 2022, which had some restrictions still in place.
Both channels have seen good growth compared to pre-Covid levels,
contributing to a total sales growth of over 50% since 2019.
Fever-Tree is growing its leadership of the Ginger Beer
category, which is popular as a mixer for the Mule serve, pairing
well with Vodka, as well as dark spirits. The brand now has more
than a third of the value share of Ginger Beer across European
retail, almost 10% more than the next largest brand(7) and we see
more opportunity to grow this in the coming years.
We also continue to invest across a range of marketing
activities, from traditional above-the-line campaigns to On-Trade
activations, social media campaigns, and television adverts, as
well as through partnerships and co-promotions at retail to drive
incremental distribution, visibility and sales. We have now
produced television campaigns in Italy, Spain, The Netherlands and
Switzerland and launched a prominent out-of-home campaign in Paris
which included promotions of our Ginger Beer and Mediterranean
Tonic across four thousand billboards around the city.
RoW I Upgrading our route-to-market
Despite making good progress in our Rest of the World Region,
revenue of GBP9.6m is a 36% decrease year-on-year (35% at constant
currency). Our reported sales were impacted by a one-off inventory
buy-back in Australia, as we established our own subsidiary and
transitioned to a new distribution partner in that market, a move
which sets us up strongly for the future.
In terms of the brand's trading performance, in Australia
Fever-Tree remains the number one premium mixer in this market by a
significant margin, with more than 80% value share of the premium
mixer category at Australian retail [8] . We continue to win new
shelf space, with four new products launched in Woolworths,
including 500ml Sparkling Pink Grapefruit, and four new SKUs
planned to go on-shelf in Coles following our double-digit growth
in the second quarter of the year, along with consistent share
gains.
Our new subsidiary set-up in Australia will allow us to take
greater control of our sales, marketing and distribution, working
alongside a new distribution partner with complimentary ambitions
and skillsets. We have already secured a local warehouse and aim to
start production with a local bottler during 2024, giving us even
more confidence in where we can take the brand in this market.
In Canada, we also made a significant step-change in our
route-to-market, transitioning to a new, larger, more experienced
distributor last year. Their sales team have already started to
support our significant growth ambitions and we look forward to
seeing how our partnership will drive further growth for the brand
in this market.
In Japan, we started to work with Asahi Breweries as our new
distributor and see real potential to expand in this large market
over the next few years in both the premium mixer and adult soft
drink category. Beyond Japan, we continue to grow our presence
across a number of Asian markets, supported by On-Trade
activations, prominent retail displays and new product
launches.
Operational review
Towards the end of the first half, the Group were made aware
that issues during production had potentially impacted certain US
inventory batches. Following completion of a programme of testing
we subsequently made the decision to permanently quarantine the
affected inventory, resulting in a GBP3.3m stock provision
recognised in the first half results. The issue was ring-fenced to
specific production batches and did not impact customer
relationships or our ability to supply the market.
The Group has made good progress with regards to 2024 glass
supply and is at the contracting phase of a UK/European glass
tender. Alongside this, we are well advanced in discussions with a
local Australian production partner and are also progressing well
with the implementation of our wide-ranging programme to embed
technology across our global operations.
All of these actions further improve supply chain resilience and
efficiency, and we look forward to combining continued revenue
growth with material margin improvement in 2024 and beyond.
Financial review
Revenue of GBP175.6m (H1 2022: GBP160.9m), with growth of 9% (6%
at constant currency) included particularly strong growth in the
US, where we grew by 40% year-on-year (32% on a constant currency
basis).
The Group generated an adjusted EBITDA of GBP10.2m (H1 2022:
GBP22.0m), a 53.5% decrease year-on-year. As anticipated, gross
margins have been impacted by inflationary cost pressures most
notably the effect of materially elevated glass pricing in 2023.
These headwinds were partially offset by mitigating actions,
including pricing actions across regions.
Continued investment behind the brand, our team and our
operations, alongside some phasing effects have increased operating
expenditure to 24.9% of Group revenue (H1 2022: 23.7%) and as a
result, the impacts on gross margin have translated to a reduction
in adjusted EBITDA margin to 5.8% (H1 2022: 13.6%).
We expect improving gross margin and overhead phasing to drive
an improvement in adjusted EBITDA margin in the second half of the
year and are confident of further recovery in 2024 due to a
combination of softening inflationary headwinds and the benefit of
the actions we are taking this year, setting up the Group for
strong, profitable growth going forward.
Working capital remains elevated due to inventory holdings,
which alongside the reduction in adjusted EBITDA margin drove
negative operating cash flow conversion in the first half and a
reduction in cash to GBP75.8m. We expect improving working capital
and adjusted EBITDA margins to combine to drive a return to
positive operating cash flow conversion as the year progresses. The
balance sheet remains strong and the Board is recommending an
interim of dividend of 5.74 pence per share, an increase of 2%
year-on-year.
GBPm H1 FY23 H1 FY22 Change
-------- --------
Revenue 175.6 160.9 9.1%
------------------- -------- -------- ---------
Gross profit 53.8 60.1 (11)%
------------------- -------- -------- ---------
Gross margin 30.7% 37.4% (670)bps
------------------- -------- -------- ---------
Adjusted EBITDA 10.2 22.0 (54%)
------------------- -------- -------- ---------
Adjusted EBITDA
margin 5.8% 13.6% (780)bps
------------------- -------- -------- ---------
Operating profit 0.6 17.4 (96%
------------------- -------- -------- ---------
Profit before tax 1.4 17.9 (92)%
------------------- -------- -------- ---------
Cash 75.8 100.0 (24)%
------------------- -------- -------- ---------
Gross margin
Gross margin of 30.7% represents a reduction from the 37.4%
gross margin reported in the first half of 2022. This was in line
with expectations, with s ignificant inflationary cost increases
across categories, most notably glass costs, impacting underlying
product costs across regions. The Group has taken mitigating
actions, including increased pricing across regions, delivering
logistics efficiencies and increased US local production, however,
this was not sufficient to offset the impact of the inflationary
headwinds in the first half.
We expect an improvement in gross margin in the second half of
the year, reflecting the full benefit of pricing actions across the
period and reducing Trans-Atlantic freight rates.
As outlined in the operational review, we are taking significant
steps in 2023 to underpin gross margin improvements in 2024 and
beyond, including:
-- Concluding a tender for UK and Europe glass requirements,
which, subject to contracting, will realise significant
year-on-year improvements in glass costs in 2024, greater
co-operation and transparency on energy cost hedging and will
underpin security of glass supply.
-- Trans-Atlantic freight rates have materially recalibrated
towards historic levels following several years of significantly
elevated rates. This will provide the flexibility to supply the US
from our UK production network as required, whilst still driving
margin improvement.
-- We are in the implementation phase of our wide-ranging
programme to embed technology across our global operations, setting
us up for 2024 with best-in-class ways of working, data and
insights to improve supply chain efficiency and underpin our future
growth.
Operating expenditure
Underlying operating expenses increased by 14.3% in the first
half of the year to GBP43.6m (H1 2022: GBP38.2m) increasing to
24.9% of Group revenue (H1 2022: 23.7%).
Our marketing spend in the first half of the year was 9.9% of
Fever-Tree brand revenue (H1 2022: 10.2%) as we continue to invest
behind the brand. Activities in the first half included a national
UK radio campaign, television advertising in European markets
including Italy, Switzerland and The Netherlands, alongside
continued execution of retail displays, On-Trade activations and
co-promotions with spirits brands across markets globally. Staff
costs and other overheads increased by 20.1%, largely driven by the
staff cost line as 2022 hires annualised alongside inflationary
wage increases, whilst we built head count in Australia ahead of
the transition to a subsidiary set-up in that market. As a result
of the investments we have made in our team and technology, we do
not anticipate having to increase headcount notably in 2024.
The dilution in gross margin, due to inflationary cost
pressures, coupled with increased levels of underlying operating
expenditure as a proportion of revenue, has resulted in a
retraction in adjusted EBITDA margin to 5.8% (H1 2022: 13.6%). As a
result, the Group generated an adjusted EBITDA of GBP10.2m, a 53.5%
decrease on the first half of 2022 (H1 2022: GBP22.0m).
Depreciation increased to GBP3.3m (H1 2021: GBP1.6m) due to the
impact of right-of-use assets capitalised under IFRS 16 in relation
to US warehousing. Amortisation remained flat at GBP0.8m (H1 2022:
GBP0.8m) alongside share-based payments of GBP2.2m (H1 2022:
GBP2.2m).
Exceptional items include a GBP3.3m provision made against
quarantined US inventory as set out in the Operational Review. The
Group considers this issue to be a one-off, non-recurring item and
is considering all recourse available relating to this issue.
As a result of these movements, adjusted EBITDA of GBP10.2m
translates to operating profit of GBP0.6m (H1 2022: GBP17.4m).
Tax
The effective tax rate in the first half of 2023 was 22.0% (H1
2022: 19.8%) and was in line with expectations.
Earnings per share
The basic earnings per share for the period are 1.20 pence (H1
2022: 12.10 pence) and the diluted earnings per share for the
period are 1.20 pence (H1 2022: 12.08 pence), a decrease of
90.1%.
In order to compare earnings per share period on period,
earnings have been adjusted to exclude amortisation, exceptional
items and the UK statutory tax rates have been applied
(disregarding other tax adjusting items). On this basis, normalised
basic earnings per share for the first half of 2023 are 3.52 pence
(H1 2022: 12.85 pence), a decrease of 74.2%.
Balance sheet and working capital
Working capital increased to GBP89.4m (H1 2022: GBP76.3m),
rising to 24.9% of last twelve months' revenue (H1 2022: 23.1%).
Whilst period end receivables reduced marginally year-on-year,
reflecting continued strong recoverability, the increase in working
capital was driven by a 41% uplift in inventory levels. This
reflects the higher levels of US inventory held at period end to
ensure we are well positioned to service the strong momentum in
that market, whilst lapping inventory pinch points in the US market
in June 2022. We expect inventory levels to recalibrate over the
remainder of the year, which will drive improvements in working
capital profile.
The increase in working capital, combined with the reduction in
adjusted EBITDA generated in the first half of the year has
temporarily resulted in negative cash generated from operations of
GBP5.6m, -54% of adjusted EBITDA (H1 2022: GBP1.5m, +6% of adjusted
EBITDA). An improving working capital profile, alongside an
improving adjusted EBITDA margin will drive a return to positive
operating cash flow conversion in the second half of the year.
Cash and Dividend
The Group's cash position reduced in the first half of the year
as a result of the retraction in operating cash flow conversion,
alongside the payment of the 2022 final dividend. The Group
continues to retain a strong cash position of GBP75.8m and this
allows us to continue to focus on making the correct strategic
choices for the long-term health of the Fever-Tree brand and
success of the business.
As a reflection of our continued confidence in the financial
strength of the Group the Directors are pleased to declare an
interim dividend of 5.74 pence per share, 2% ahead of the 2022
interim dividend. The dividend will be paid on 20 October 2023, to
shareholders on the register on 29 September 2023.
Consolidated statement of comprehensive income
For the six months ended 30 June 2023
Notes Unaudited 6 Unaudited 6 Audited
months to 30 months to 30 year to
June 2023 June 2022 31 December
GBPm GBPm 2022
GBPm
Revenue 2 175.6 160.9 344.3
Cost of sales (121.8) (100.8) (225.5)
============== ============== =============
Gross profit 53.8 60.1 118.8
Administrative expenses (49.9) (42.7) (88.2)
Adjusted EBITDA 1 10.2 22.0 39.7
Depreciation (3.3) (1.6) (4.3)
Amortisation (0.8) (0.8) (1.5)
Share based payment charges (2.2) (2.2) (3.3)
================================ ====== ============== ============== =============
Operating profit before
exceptional items 3.9 17.4 30.6
Exceptional
items 4 (3.3) - -
============== ============== =============
Operating profit after 0.6 - -
exceptional items
Finance costs
Finance income 1.1 0.3 0.8
Finance expense (0.3) (0.1) (0.4)
Profit before tax 1.4 17.6 31.0
Tax expense (0.3) (3.5) (6.1)
============== ============== =============
Profit for the period
/ year 1.1 14.1 24.9
Items that may be reclassified
to profit or loss
Foreign currency translation
difference of foreign
operations (1.2) (0.1) (0.1)
Effective portion of cash
flow hedges 1.1 (1.6) (0.3)
Related Tax - 0.3 -
============== ============== =============
(0.1) (1.4) (0.4)
Comprehensive income
attributable to equity
holders of the parent
company 1.0 12.7 24.5
Consolidated statement of comprehensive income (continued)
For the six months ended 30 June 2023
Earnings per share for
profit attributable to
the owners of the parent
during the year
Basic (pence) 5 1.20 12.10 21.36
Diluted (pence) 5 1.20 12.08 21.32
Consolidated statement of financial position
As at 30 June 2023
Unaudited Unaudited Audited
30 30 31
June June December
2023 2022 2022
GBPm GBPm GBPm
Non-current assets
Property, plant & equipment 24.0 9.2 25.6
Intangible assets 54.1 48.4 53.2
Deferred tax asset 1.6 3.0 1.9
Other financial assets - - 1.8
=========== =========== ==========
Total non-current assets 79.7 60.6 82.5
=========== =========== ==========
Current assets
Inventories 75.6 53.3 60.1
Trade and other receivables 75.7 77.5 72.4
Derivative financial instruments 1.4 - -
Corporation tax asset 0.8 3.1 1.3
Cash and cash equivalents 75.8 100.0 95.3
=========== =========== ==========
Total current assets 229.3 233.9 229.1
=========== =========== ==========
Total assets 309.0 294.5 311.6
=========== =========== ==========
Current liabilities
Trade and other payables (61.8) (54.4) (51.3)
Loans and other borrowing - (0.1) (1.8)
Derivative financial instruments - (1.1) -
Corporation tax liability - - (0.8)
Lease liabilities (3.4) (0.7) (3.4)
=========== =========== ==========
Total current liabilities (65.2) (56.3) (57.3)
=========== =========== ==========
Non-current liabilities
Deferred tax liability (1.5) (1.6) (1.6)
Lease liabilities (12.7) (1.9) (13.5)
=========== =========== ==========
Total non-current liabilities (14.2) (3.5) (15.1)
=========== =========== ==========
Total liabilities (79.4) (59.8) (72.4)
=========== =========== ==========
Net assets 229.6 234.7 239.2
=========== =========== ==========
Equity attributable to
equity holders of the
company
Share capital 0.3 0.3 0.3
Share premium 54.8 54.8 54.8
Capital Redemption Reserve 0.1 0.1 0.1
Cash Flow Hedge Reserve - (1.1) (0.5)
Translation Reserve (1.5) (0.3) (0.3)
Retained earnings 175.9 180.9 184.8
Total equity 229.6 234.7 239.2
=========== =========== ==========
Consolidated statement of cash flows
For the six months ended 30 June 2023
Unaudited 6 Unaudited Audited year
months to 30 6 months to to 31 December
June 2023 30 June 2022 2022
GBPm GBPm GBPm
Operating activities
Profit before tax 1.4 17.6 31.0
Finance expense 0.3 0.1 0.4
Finance income (1.1) (0.3) (0.8)
Depreciation of property,
plant & equipment 3.3 1.6 4.3
Amortisation of intangible
assets 0.8 0.8 1.5
Share
based
payments 2.2 2.2 3.3
Non-cash movements on working
capital 3.5 0.1 (3.1)
Gain - - -
on
disposal
of
fixed
asset
3.3 - -
Exceptional
items
============== ============== ================
13.7 22.1 36.6
(Increase)/
Decrease
in
trade
and
other
receivables (2.4) (10.2) (1.6)
(Increase)/ Decrease in inventories (25.9) (19.6) (23.5)
Increase/ (Decrease) in trade
and other payables 11.7 6.0 0.5
(Decrease)/ Increase in derivative
asset/liability (2.7) 3.2 2.4
(19.3) (20.6) (22.2)
Cash generated from operations (5.6) 1.5 14.4
============== ============== ================
Income tax paid (0.6) (5.5) (5.9)
Net cash flows from operating
activities (6.2) (4.0) 8.5
============== ============== ================
Investing activities
Purchase of property, plant
and equipment (1.1) (1.1) (4.6)
Interest received 1.1 0.3 0.8
Investment in intangible assets (1.8) (1.2) (2.5)
Acquisition of subsidiary,
net of cash acquired - - (3.7)
============== ============== ================
Net cash used in investing
activities (1.8) (2.0) (10.0)
============== ============== ================
Financing activities
Interest paid (0.1) (0.1) (0.1)
Dividends paid (12.4) (62.2) (68.8)
Repayment - - -
of
loan
Payment
of
lease
liabilities (1.7) (0.4) (1.8)
Net cash used in financing
activities (14.2) (62.7) (70.7)
============== ============== ================
Net increase/ (decrease) in
cash and cash equivalents (22.2) (68.7) (72.2)
Cash and cash equivalents
at beginning of period 95.3 166.2 166.2
Effect of movement in exchange
rates on cash held 2.7 2.5 1.3
============== ============== ================
Cash and cash equivalents
at end of period 75.8 100.0 95.3
============== ============== ================
Notes to the consolidated financial information
For the six months ended 30 June 2023
1. Basis of preparation and accounting policies
The principal accounting policies adopted in the preparation of
the interim financial information are unchanged from those applied
in the Group's financial statements for the year ended 31 December
2022 which had been prepared in accordance with International
Accounting Standards in conformity with the requirements of the
Companies Act 2006. The accounting policies applied herein are
consistent with those expected to be applied in the financial
statements for the year ended 31 December 2023.
This report is not prepared in accordance with IAS 34. The
financial information does not constitute statutory accounts within
the meaning of section 435 of the Companies Act 2006. Statutory
accounts for Fevertree Drinks plc for the year ended 31 December
2022 have been delivered to the Registrar of Companies. The
auditor's report on those accounts was unqualified, did not draw
attention to any matters by way of emphasis and did not contain a
statement under Section 498 (2) or (3) of the Companies Act
2006.
Adjusted EBITDA has been used throughout the interim financial
information. The Group believes adjusted EBITDA to be a key
indicator of underlying operational performance, adjusting
operating profit for several non-cash items. As a consequence of
these adjustments, the Group believes that adjusted EBITDA
represents normalised corporate profits. Adjusted EBITDA for the
period is operating profit before exceptional items of GBP3.9m
before depreciation of GBP3.3m, amortisation of GBP0.8m and share
based payment charges of GBP2.2m. Adjusted EBITDA is an appropriate
measure since it represents to users a normalised, comparable
operating profit, excluding the effects of the accounting estimates
and non-cash items mentioned above. The definition for adjusted
EBITDA as defined above is consistent with the definition applied
in previous years. This measure is not defined in the International
Financial Reporting Standards. Since this is an indicator specific
to the Group's operational structure, it may not be comparable to
adjusted metrics used by other companies. The determination of
exceptional items is also not defined in the International
Financial Reporting Standards, and has been used throughout this
financial information as it provides users with specific
information on a once-off event which will not recur in future
periods. As such it allows for improved comparability of results
across financial periods.
The impact of the ongoing conflict in Ukraine and the
inflationary macro-economic environment has been reflected in the
Directors' assessment of the going concern basis of preparation.
This has been considered by modelling the impact on the Group's
cashflow for the period to the end of June 2024. In completing this
exercise, the Directors established there were no plausible
scenarios that would result in the Group no longer continuing as a
going concern.
The Directors have therefore concluded that the Group has
adequate resources to continue in operational existence for at
least the 12 months following the publication of the interim
financial statements, that it is appropriate to continue to adopt
the going concern basis of preparation in the financial statements,
that there is not a material uncertainty in relation to going
concern and that there is no significant judgement involved in
making that assessment. This strong financial position has
underpinned the Directors' decision to pay an interim dividend of
5.74 pence per share.
Notes to the consolidated financial information (continued)
For the six months ended 30 June 2023
2. Revenue by region
Unaudited Unaudited Audited
6 months to 6 months to year to 31
30 June 2023 30 June 2022 December
GBPm GBPm 2022
GBPm
United Kingdom 53.7 53.5 116.2
United States of America 56.1 40.1 95.6
Europe 56.2 52.3 101.0
Rest of the World 9.6 15.0 31.5
============== ============== ============
Group 175.6 160.9 344.4
============== ============== ============
3. Dividend
The interim dividend of 5.74 pence per share will be paid on
20(th) October 2023 to shareholders on the register on 29(th)
September 2023.
4. Exceptional items
A provision of GBP3.3m has been recognised relating to a
quantity of stock on hand in the US at period end. This relates to
issues during production which arose towards the end of this
interim period. The issue has been investigated and linked to
specific production batches and subsequently the decision has been
made to not sell the affected inventory, therefore a full provision
has been made against this inventory. This cost has been recognised
as an exceptional item on account of its material quantum and
one-off nature.
5. Earnings per share
Unaudited 6 Unaudited 6 months Audited year
months to 30 to 30 June 2022 to 31 December
June 2023 GBPm 2022
GBPm GBPm
Profit
Profit used to calculate
basic and diluted EPS 1.4 14.1 24.9
============== =================== ================
Number of shares
Weighted average number
of shares for the purpose
of basic earnings per
share 116,605,028 116,551,449 116,556,818
Weighted average number
of employee share options
outstanding 192,288 214,120 222,486
Weighted average number
of shares for the purpose
of diluted earnings
per share 116,797,316 116,765,569 116,779,304
Basic earnings per
share (pence) 1.20 12.10 21.36
============== =================== ================
Diluted earnings per
share (pence) 1.20 12.08 21.32
============== =================== ================
Notes to the consolidated financial information
For the six months ended 30 June 2023
4. Earnings per share (continued)
Normalised EPS Unaudited Unaudited 6 Audited year
6 months to months to 30 to 31 December
30 June 2023 June 2022 2022
GBPm GBPm GBPm
Profit
Reported profit before tax 1.4 17.6 31.0
============== ============== ================
Add back:
Amortisation 0.8 0.8 1.5
3.3 - -
Exceptional
items
Adjusted profit before tax 5.5 18.4 32.5
Tax - assume standard rate
(25% (2022: 19%)) (1.4) (3.5) (6.2)
============== ============== ================
Normalised earnings 4.1 15.0 26.3
============== ============== ================
Number of shares 116,605,028 116,551,449 116,556,818
Normalised earnings per share
(pence) 3.52 12.87 22.59
============== ============== ================
Normalised EPS is an Alternative Performance Measure in which
earnings have been adjusted to exclude amortisation, exceptional
items and the UK statutory tax rates have been applied to these
adjusting items (disregarding other tax adjusting items).
[1] Adjusted EBITDA is earnings before interest, tax,
depreciation, amortisation, share based payment charges,
exceptional items and finance costs
[2] IRI 52 Wks to 09/07/2023; CGA MAT to 17/06/2023
[3] CGA
[4] IRI 13 weeks to 09/07/2023
[5] IRI YTD to 09/07/2023
[6] Nielsen 26 weeks to 17 June 2023
[7] Nielsen H1 2023 top 12 European markets
[8] Woolworth & Coles scan data
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END
IR UAAWROUUKAAR
(END) Dow Jones Newswires
September 12, 2023 02:00 ET (06:00 GMT)
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