Fevertree Drinks shares rise despite revenue warning

Company faces slowdown in UK growth but prepares to expand in the United States

                                

Insurgent British tonic-water brand Fevertree Drinks has given warning that its annual revenue will be affected by the current slowdown in UK consumer spending.

It would appear that the intensity of Fevertree’s insurgency is lessening. The company revised its revenue expectations to well below the consensus previously reached by analysts, from £275m ($355m, €321) to between £266m ($244m, €310) and £268m ($246, €312).

Fevertree shares dropped as much as 8 per cent on the news to a low of 1717 pence. However, they soon recovered to trade up at 2007 pence in mid-afternoon trading, an 8 per cent gain the other way.

Although investors may have been initially spooked by Fevertree’s revenue revision, the rebound in share price can be attributed to the fact that even the revised revenue expectations will exhibit healthy growth on the previous year. Furthermore, the firm has good fundamentals and is expanding quickly into the United States and around the world.

Founded in 2004 by current CEO Tim Warrillow and Charles Rolls, a former managing director of Plymouth Gin, Fevertree has ridden Britain’s gin craze perfectly. It is now sold in 45 per cent of pubs and bars and 39 per cent of shops and has emerged as a major competitor to Schweppes which dominated the market for almost a century.

Warrilow stated: “Fevertree's progress in the US is particularly encouraging and the signing of a US bottling partner is a further step in building our operations in this exciting market.”

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