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Mixer Maker Fevertree Tumbles on Muted Full-Year Results

Mixer Maker Fevertree Tumbles on Muted Full-Year Results

(Bloomberg) -- Fevertree Drinks Plc shares fell as the U.K. maker of upscale tonic water said its sales are running “in line with board expectations,” a change from the upbeat statements that had stoked the company’s valuation.

  • Revenue was 237.4 million pounds ($313.5 million) last year, broadly matching analysts’ estimates. Adjusted earnings beat estimates.

Key Insights

  • Fevertree has in the past consistently delivered results “materially ahead” of expectations, which has earned it an unusually high multiple compared with peers. It trades at about 46 times analysts’ forecast profit for the next 12 months.
  • Growth in the U.K., the company’s largest market, was “exceptional” as warm weather and events such as the soccer World Cup and the royal wedding helped buoy sales.
  • In the U.S., sales are growing at less than half the U.K. pace despite rising from a smaller base, as drinkers favor sipping neat spirits such as bourbon and tequila over mixing gin.

Market Action

  • Fevertree shares fell as much as 8.6 percent to 2,323 pence in London trading. They had gained 16 percent this year through Monday but were still down by about a third from a record high reached in September.

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  • Read the statement.

To contact the reporter on this story: Thomas Buckley in London at tbuckley25@bloomberg.net

To contact the editors responsible for this story: Eric Pfanner at epfanner1@bloomberg.net, John J. Edwards III, John Lauerman

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