The Fevertree Drinks PLC (LON: FEVR) share price fell 7.27% after releasing the interim results for the first half of its 2023 financial year, which ended on 30 June 2023. The company registered 9% year-on-year revenue growth to £175.6 million from £160.9 million in H1 2022.
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The premium drinks mixers company revealed that its adjusted pretax profit margins shrunk to 5.8% in H1 2023 from 13.6% in H1 2022, resulting in a 6.70% decline. The company attributed its lower profit margins to product cost headwinds, partially offset by efficiency projects.
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The company also noted that its upbeat revenue growth was driven by robust performance in the United States, where its sales surged by a whopping 40% to £56.1 million from £40.1 million. The company also incurred a £3.3m exceptional item relating to a production issue in the US, which did not impact its operations.
Fever-Tree extended its clear market leadership in the UK with its highest-ever value share, encouraging initial performance from its range of cocktail mixers and adult soft drinks. Many of the Group's European markets performed well against solid comparisons, growing its leadership position to two-thirds of the premium mixer category across the region.
The company expects to generate revenues worth from £380 million to £390 million, with its pre-tax profits coming in at £30m to £36m.
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 macroeconomic conditions, we ended the first half with our highest-ever value share of 45%, 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.”
Fevertree share price.
The Fevertree share price fell 7.27% to trade at 1208.3p, from Monday’s closing price of 1303.0p, but had recouped most of its losses at writing.
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