Interim Results

RNS Number : 0894U

Fevertree Drinks PLC

27 July 2015

 



27^th July 2015

Fevertree Drinks plc ("Fever-Tree")

Interim Results

Fever-Tree, the world's leading supplier of premium carbonated mixers for alcoholic spirits by retail sales value, today announces its Interim Results for the period ended 30 June 2015.

Financial Highlights:

·      Revenue up 62% to £24.1m (H1 2014: £14.9m)

·      Gross margin of 50.5% (H1 2014: 51.1%)

·      Adjusted EBITDA¹ up 68% to £7.2m (H1 2014: £4.3m)

·      Strong balance sheet with net cash at period end of £7.9m

·      Diluted EPS of 4.44 pence

·      Interim dividend of 0.78 pence per share

Operational Highlights:

·      New UK Off-Trade listing in Morrisons

·      Continued strong growth in Ginger Beer sales in USA

·      Launch of the new 150ml can format

Tim Warrillow, CEO of Fever-Tree said:

"We are delighted to report that the Group's strong performance throughout 2014 has continued into the first half of 2015. We achieved a 62% increase in revenue with all four of our territories continuing to perform strongly and the results were underpinned by solidly maintained margins and a strong balance sheet.

The Group remains ideally positioned to benefit from the ongoing global trend to greater premiumisation and look to the future with confidence as we continue to deepen our penetration in our existing markets whilst exploring new market opportunities."  

¹ Adjusted EBITDA is earnings before interest, tax, depreciation, amortisation, exceptional items and finance costs

For further information:

Fevertree Drinks plc	c/o FTI [phone]
Tim Warrillow, Co-founder and CEO
Charles Rolls, Co-founder and Executive Deputy Chairman
Andy Branchflower, Finance Director
FTI Consulting - Financial PR	[phone]
Jonathon Brill	[e-mail]
Oliver Winters
Tom Hufton
Investec Bank plc - Nominated Adviser and Broker	[phone]
Garry Levin
Duncan Williamson
Matt Lewis
David Anderson

Notes to Editors:

Fever-Tree is the world's leading supplier of premium carbonated mixers for alcoholic spirits by retail sales value, with distribution to approximately 50 countries worldwide. Based in the UK, the brand was launched in 2005 to provide high quality mixers which could cater to the growing demand for premium spirits, in particular gin, but also increasingly for vodka, rum and whisky. The Company now sells a range of carbonated mixers to hotels, restaurants, bars and cafes ("On Trade") as well as selected retail outlets ("Off Trade"). Approximately 70 per cent of the Group's sales were derived from outside of the UK in financial year 2014, with key overseas markets in the US and Europe.

Chief Executive's report

I am delighted to report that the Group's strong performance in 2014 has continued in the first half of 2015. During the period we achieved revenue of £24.1m, representing growth of 62% on the first half of 2014.

Despite some net forex headwinds, our gross profit margin has been maintained at 50.5% (2014: 51.1%) and the Group achieved an adjusted EBITDA of £7.2m in the first half of the year, generating diluted earnings per share of 4.44p. We begin the second half of 2015 with a strong balance sheet and net cash of £7.9m.

Results

	Half year ended 30 June 2015	Half year ended 30 June 2014	Movement
	£m	£m	%
Revenue	24.1	14.9	62%
Gross Profit	12.1	7.6	60%
Gross Profit %	50.5%	51.1%
Adjusted EBITDA	7.2	4.3	68%
Adjusted EBITDA %	29.9%	28.9%
Diluted EPS	4.44	16.792
Interim Dividend	0.78p	n/a

² Calculation based on pre-IPO structure, see notes to the financials

Territory review

Revenue by territory

	Half year ended 30 June 2015	Half year ended 30 June 2014	Movement	Share of revenue
	£m	£m	%	%
UK	7.6	4.7	62%	32%
USA	5.8	3.5	69%	24%
Europe	9.4	5.8	61%	39%
RoW	1.3	0.9	42%	5%
Total	24.1	14.9	62%	100%

UK

In our largest market, the Group achieved sales growth of 62%, with strong performance in both the On-Trade and Off-Trade, although this result was accentuated by certain customers building inventory in June in advance of the summer season. In the first half of 2015 we increased investment in the On-Trade sales team and achieved some notable new listings. In the Off-Trade we also gained a listing with Morrisons. Our new tonic and naturally light tonic in 150ml can format was launched in Sainsbury's at the very end of June, in Waitrose in July and was soon followed by an exclusive listing in British Airways First Class and Club World cabins as well as lounges throughout the UK.

USA

The strong momentum from 2014 has continued, with revenue growth of 69% in the period, which represented growth of 54% when adjusted for the strengthening US dollar. The "Moscow Mule" trend continued to drive growth in Ginger Beer sales in the first half of the year although growth across the Tonic flavours is also notable reflecting the rise in popularity of a premium gin and tonic in the region. 

Europe

Revenue growth of 61% was achieved in the period, which represented growth of 77% when adjusted for the weakening Euro.  Whilst this strong result was aided by certain importers taking large orders in June in advance of the summer season, growth continues to be underpinned by the strong performance seen in 2014 across many western European countries which has continued into the first half of 2015.

RoW

Sales to countries within the RoW region have grown by 42% and the Group has added dedicated resource to take advantage of opportunities in Asia Pacific and Latin America.

Financial

Gross margin and operating expenses

Gross margin of 50.5% in the period represents a decrease from the 51.1% achieved in the first half of 2014. The main driver of this decrease was the weakening Euro, although this has been partially offset by the impact of the strengthening Dollar, as well as product cost and logistics efficiencies.

Underlying operating expenses¹ decreased as a proportion of revenue to 20.4% during the period (2014: 22.3%), which has improved the EBITDA margin to 29.9% (2014: 28.9%).  For the current period underlying operating expenses include an incremental £0.4m unrealised gain made on outstanding forward exchange contracts at June 2015.  Disregarding this £0.4m unrealised gain, the level of other underlying operating expenses is comparable to the prior period at 22.2% of revenue (2014: 22.3%).

Cash position and working capital

The Group had net cash of £7.9m at period end, with £14.0m of cash at the bank offset by £6.1m of bank loans. Adjusted operating cash flow in the period is strong at 83% of adjusted EBITDA, albeit this conversion rate is influenced by seasonality and is expected to return to levels seen historically as we progress through 2015.

Dividend

Reflecting the Board's continued confidence in the outlook, the Directors are pleased to declare an interim dividend of 0.78 pence per share. The dividend will be paid on 4 September 2015, to shareholders on the register on 14 August 2015.

Outlook

We are encouraged by our performance in the first half of the year and the Board remains positive about the outlook for 2015. 

__________________

¹Underlying operating expenses are defined as administrative expenses less LTIP charges, depreciation, amortisation and exceptional items

Tim Warrillow

Chief Executive

Consolidated statement of comprehensive income

For the six months ended 30 June 2015

		Six months ended	Six months ended	Year ended
		30 June	30 June	31 December
		2015	2014	2014
	Note	£	£	£
Revenue	2	24,069,646	14,868,371	34,691,034
Cost of sales		(11,921,618)	(7,264,829)	(17,028,408)
Gross profit		12,148,028	7,603,542	17,662,626
Administrative expenses		(5,366,114)	(3,862,770)	(9,574,793)
Adjusted EBITDA*		7,196,899	4,291,027	10,005,110
Depreciation		(54,985)	(35,481)	(84,263)
Amortisation		(360,000)	(357,041)	(717,041)
Exceptional items		-	(157,733)	(1,115,973)
Operating profit		6,781,914	3,740,772	8,087,833
Finance costs
Finance income		5,023	5,167	9,222
Finance expense		(193,767)	(2,619,209)	(5,575,813)
Profit before tax		6,593,170	1,126,730	2,521,242
Tax expense		(1,435,758)	(471,615)	(1,224,831)
Profit for the year/period and comprehensive income attributable to equity holders of the parent company		5,157,412	655,115	1,296,411
Earnings per share for profit attributable to the owners of the parent during the year
Basic (pence)	4	4.48	16.79	1.54
Diluted (pence)	4	4.44	16.79	1.54

* Adjusted EBITDA is earnings before interest, tax, depreciation, amortisation, exceptional items and finance costs

Consolidated statement of financial position

30 June 2015

		30 June	30 June	31 December
		2015	2014	2014
		£	£	£
Non-current assets
Property, plant and equipment		411,164	330,369	351,699
Intangible assets		44,210,655	44,930,655	44,570,655
Total non-current assets		44,621,819	45,261,024	44,922,354
Current assets
Inventories		5,391,968	3,310,848	4,346,168
Trade and other receivables		10,764,817	7,586,737	8,390,202
Derivative financial instruments		458,054	42,124	11,051
Cash and cash equivalents		13,975,803	3,936,707	9,583,313
Total current assets		30,590,642	14,876,416	22,330,734
Total assets		75,212,461	60,137,440	67,253,088
Current liabilities
Trade and other payables		6,983,416	3,932,790	4,387,498
Derivatives		-	495	-
Loans and borrowings		634,784	291,033	364,445
Corporation tax liability		1,413,894	782,128	658,604
Total current liabilities		9,032,094	5,006,446	5,410,547
Non-current liabilities
Loans and borrowings		5,461,339	53,365,413	5,895,828
Deferred tax liability		2,607,661	2,584,218	2,679,661
Total non-current liabilities		8,069,000	55,949,631	8,575,489
Total liabilities		17,101,094	60,956,077	13,986,036
Net assets / (liabilities)		58,111,367	(818,637)	53,267,052
Equity attributable to equity holders of the company
Share capital		288,102	281,321	288,102
Share premium		53,521,386	186,796	53,521,386
Capital Redemption Reserve		93,189	-	93,189
Retained earnings		4,208,690	(1,286,754)	(635,625)
Total equity		58,111,367	(818,637)	53,267,052

Consolidated statement of cash flows

For the six months ended 30 June 2015

	Period ended	Period ended	Year ended
	30 June	30 June	31 December
	2015	2014	2014
	£		£
Operating activities
Profit before tax	6,593,170	1,126,730	2,521,242
Finance expense	193,767	2,619,209	5,575,813
Finance income	(5,023)	(5,167)	(9,222)
Depreciation of property, plant and equipment	54,985	35,481	84,263
Amortisation of intangible assets	360,000	357,041	717,041
Share based payments	32,626	-	9,833
	7,229,525	4,133,294	8,898,970
(Increase)/Decrease in trade and other receivables	(2,829,534)	(1,590,352)	(2,401,730)
(Increase)/Decrease in inventories	(1,045,800)	(769,075)	(1,804,395)
Increase/(Decrease) in trade and other payables	2,595,918	1,031,312	1,482,143
	(1,279,416)	(1,328,115)	(2,723,982)
Cash generated from operations before exceptional items	5,950,109	2,962,912	7,290,961
Exceptional items	-	(157,733)	(1,115,973)
Cash generated from operations	5,950,109	2,805,179	6,174,988
Income taxes paid	(752,469)	(538,825)	(1,320,121)
Net cash flows from operating activities	5,197,640	2,266,354	4,854,867
Investing activities
Purchase of property, plant and equipment	(114,450)	(197,610)	(267,723)
Net cash used in investing activities	(114,450)	(197,610)	(267,723)
Financing activities
Interest (paid)	(152,893)	(1,315,223)	(1,459,545)
Interest received	7,916	5,168	9,222
Loans repaid	(200,000)	(175,000)	(350,000)
Loan note repaid	-	-	(49,991,087)
Shares issued (net of fees allocated against equity)	-	-	53,434,561
Dividends paid	(345,723)	-	-
Net cash used in financing activities	(690,700)	(1,485,055)	1,643,151
Net increase in cash and cash equivalents	4,392,490	583,689	6,230,295
Cash and cash equivalents at beginning of period	9,583,313	3,353,018	3,353,018
Cash and cash equivalents at end of period	13,975,803	3,936,707	9,583,313

Notes to the consolidated financial statements

For the six months ended 30 June 2015

1.  Basis for preparation

The interim financial statements have been prepared in accordance with the recognition and measurement requirements of International Financial Reporting Standards (IFRS) and IFRIC interpretations issued by the International Accounting Standards Board (IASB) adopted by the European Union.

The accounts have been prepared in accordance with accounting policies that are consistent with the December 2014 Report and Accounts and that are expected to be applied in the Report and Accounts of the year ended 31 December 2015. There are new or revised standards or interpretations that apply to the period beginning 1 January 2015 but they do not have a material effect on the financial statements for the period ended 30 June 2015.

This report is not prepared in accordance with IAS 34, which is not mandatory.  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 2014 have been delivered to the Registrar of Companies.  The auditors' 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.

2.  Revenue

An analysis of turnover by geographical market is given below:

	Six months ended	Six months ended	Year ended
	30 June	30 June	31 December
	2015	2014	2014
	£	£	£
United Kingdom	7,590,177	4,691,241	11,138,177
United States of America	5,809,368	3,446,272	8,286,535
Europe	9,408,768	5,844,416	13,438,075
Rest of the World	1,261,333	886,442	1,828,247
	24,069,646	14,868,371	34,691,034

3.  Dividends

The interim dividend of 0.78p will be paid on 4 September 2015 to shareholders on the register on 14 August 2015.

4.  Earnings Per Share

	Six months ended	Six months ended	Year ended
	30 June	30 June	31 December
	2015	2014	2014
	£	£	£
Profit
Profit used in calculating basic and diluted EPS	5,157,412	655,115	1,296,411
Number of shares
Weighted average number of shares for the purpose of basic earnings per share	115,240,896	3,900,979	83,934,200
Weighted average number of employee share options outstanding	842,531	-	133,882
Weighted average number of shares for the purpose of diluted earnings per share	116,083,427	3,900,979	84,068,082
Basic earnings/(loss) per share (pence)	4.48	16.79	1.54
Diluted earnings/(loss) per share (pence)	4.44	16.79	1.54

 

END

 

 

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