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Drinks mixer supplier Fever-Tree (FEVR) has announced yet another jump in sales, but a fall in its gross profit margin in its preliminary results up to the end of last year.
Revenue jumped up year-on-year by 66% to reach £170.2m from £102.2m that was posted at the end of 2016.
However, gross profit margin fell to 53.5% at the end of last year from 55.2% the previous year.
Adjusted EBITDA was more positive, with a rise of £22.9m, leaping to a total of £58.7m, while the robust balance sheet with net cash at a year-end of £50.9m, a considerable increase from £26.9m in 2016.
Continuing growth was measured across all regions, channels flavours and formats, but the UK market in particular delivered an exceptional performance where it became the number one mixer brand by value in the UK off-trade channel.
In the UK, which represented 52% of sales in 2017, with 48%, it achieved “exceptional” sales growth of 96%.
Fever-Tree remains confident on its UK outlook, having appointed a new innovation director, and successful launch of the Clementine Tonic in UK over the Christmas period, which was a limited edition.
Distribution was strengthened on a global scale, due to distribution wins across on and off trade channels, new listings, and increased stores and product ranging within existing customers.
In North America a new CEO was appointed, in addition to the establishment of a wholly owned North American establishment.
Sales were up 39% in North American (36% on a constant currency basis), while sales growth of 44% was achieved across Continental Europe in 2017 (37% on a constant currency basis).
Tim Warrillow, co-founder and CEO of Fever-Tree said: “It has been a year of significant progress for Fever-Tree. We have continued to see strong growth across all our regions with the UK once again delivering an exceptional performance culminating in Fever-Tree ending the year as the leading mixer brand at UK retail.
“Whilst this is a notable achievement, there remains a significant opportunity in front of us across all our regions as Fever-Tree continues to drive the evolution of the mixer category.”
“We have had an encouraging start to the year. Our first mover advantage, pioneering approach, brand strength, penetration and relationships means we are ideally positioned to be able to take advantage of the opportunities ahead.”
Fever-Tree shares are down 4.1% so far this morning to 2,582p.
Morning update
Greencore (GNC) has announced a major restructure of its US operations and downgraded earnings expectations for the year.
Patrick Coveney, group CEO, will take a direct role in the strategic, organisational and commercial leadership of Greencore US, spending approximately half his time in the US.
Chuck Metzger, COO of Greencore US, has assumed day-to-day responsibility for the US business and will report to Patrick. Chris Kirke, outgoing CEO of Greencore US, is leaving the Group to return to the UK and will continue to work with the leadership team to ensure a smooth transition.
Since January, the Group has made important additions to the US senior team, with four senior hires in the areas of commercial, finance, strategy and HR..
Additionally, it will cease production at its Rhode Island facility from 25 March 2018, though the facility will be retained for potential repurposing. This decision will address the operating losses of the site that have continued into 2018.
It is also looking to increase capacity utilisation at its Jacksonville facility and Minneapolis.
The one off cash costs of resetting the US network and the management restructure are anticipated to be approximately £3m.
This means it has cut its forecast earnings, with adjusted earnings per share down to a range of 14.7p-15.7p in 2018, compared to current market expectations of 15.7p-16.6p.
Petrol forecourt retailer Applegreen (APGN) is toasting increases in profits, revenue and growth, in its end of year financial statement for 2017.
Gross profit year on year grew by 25%, while like-for-like growth reached 7.4% in non-fuel gross profit.
Revenue increased by a notable 21% to reach €1.4bn, and its net debt position also improved, as it fell to €10.2m from €19.4m.
Looking to the future, the group are seeking to expand further to generate more growth, as capital expenditure is set to reach €113m.
The group’s estate numbers grew rapidly throughout last year, increasing from 99 sites to 342 sites, with a total of 77 food outlets that were opened in 2017.
Bob Etchingham, Applergreen’s CEO said: “We are very pleased to report another strong set of results for the business as we continue to deliver on our growth strategy. This performance was underpinned by positive like for like growth, particularly in the Republic of Ireland, ongoing expansion of our estate and an enhanced fuel margin resulting from our acquisition of a 50% stake in the Joint Fuels Terminal in Dublin Port.”
“The business saw significant expansion during the year as we increased our estate by 99 sites to a total of 342 locations. We opened 22 new sites in the Republic of Ireland, 20 in the UK and 57 in the US in 2017.”
“We are confident in the prospects for the company in 2018 as our underlying business continues to perform well and we further evolve our growth strategy. The significant acquisitions completed in 2017 are performing as expected and we are well placed to progress both our organic and acquisition led development plans in the coming year.”
Magners producer C&C Group (CCR), has revealed that its group operating profit is anticipated to be €86m, in line with management expectations, with Admiral Taverns contributing an additional €1.1m to Group earnings.
While its cash conversion is also expected to be within its own forecasts at 60% of EBITDA.
The group’s strongest performers were Tennent’s where strong growth in Scotland was recorded, and its cider sales were boosted by Magners which returned to volume growth.
This was achieved through its first year of its cider distribution partnership with AB InBev.
The group also pointed to an encouraging outlook in Scotland, due to its growing super-premium portfolio for this year, which is well positioned to deliver growth next year.
The FTSE 100 has started the morning by falling a further 0.1%% to 7,210.
This is ahead of today’s spring budget which will be delivered this afternoon, the chancellor Phillip Hammond is expected to announce a modest statement, where he is expected to resist calls to loosen the purse strings after more positive public spending indicators.
Greencore has plunged 21.9% to 142.7 after its profits warning this morning.
Fever-Tree has fallen a further 4.1% to 2,582p despite its stellar sales growth as the market reacts to tightening margins.
Other fallers include Conviviality (CVR), down 8.2% to 105.4p, McBride (MCB), down 2.2% to 154.3p and Britvic (BVIC), down 1.7% to 706.5p.
Applegreen is also down 0.7% to 491p, while CCR is up 0.8% to €2.81.
Yesterday in the City
The FTSE 100 closed down 0.1% to 0.13% to 7,214pts as early gains slipped away in the afternoon.
Investors were wary of what Fevertree’s full-year results held this morning, with the mixer manufacturer down 4.5% yesterday back to 2,692p.
Just Eat dropped as low as 746.6p yesterday after a downgrade to sell by Deutsche Bank, but recovered in the afternoon to end trading down just 0.9% at 781.6p.
Other fallers include PayPoint (PAY), down 2.1% to 811p, Reckitt Benckiser (RB), down 1.9% to 5,697p, PZ Cussons (PZC), down 1.6% to 284.2p and Imperial Brands (IMB), down 1.5% to 2,553p.
Those companies on the rise yesterday included McColl’s (MCLS), up 4.6% to 250p, McBride (MCB), up 4.4% to 157.8p and AG Barr (BAG), up 3.8% to 664p.
Other risers included SSP Group (SSP), up 1.4% to 635p, Coca-Cola HBC (CCH), up 1% to 2,543p and Cranswick (CWK), up 1% to 2,988p.
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