REG - Fevertree Drinks PLC - Interim Results <Origin Href="QuoteRef">FEVR.L</Origin>

Fevertree DrinksAnnouncement

27/07/2015 07:00

RNS Number : 0894U
Fevertree Drinks PLC
27 July 2015
27th 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 +44 (0)20 3727 1000
Tim Warrillow, Co-founder and CEO

Charles Rolls, Co-founder and Executive Deputy Chairman

Andy Branchflower, Finance Director



FTI Consulting - Financial PR
+44 (0)20 3727 1000
Jonathon Brill
fever-tree@fticonsulting.com
Oliver Winters

Tom Hufton



Investec Bank plc - Nominated Adviser and Broker
+44 (0)20 7597 4000
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

This information is provided by RNS
The company news service from the London Stock Exchange
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