Fevertree Drinks PLC (LON:FEVR) announced it has started to work with a new bottling partner on the West Coast of the US to ramp up production while also upgrading earnings expectations.
The posh mixers producer said it will cut transport and logistic costs, but it will also significantly reduce lead times, providing greater agility to respond to the growing demand in the US market.
The AIM-listed firm also posted a small dip in full-year revenue thanks to growth across all its markets except the UK, as it managed to grow the off-trade and e-commerce channels to mitigate the damage of hospitality closures.
As restrictions are gradually lifted around the world, Fevertree reckons some of the off-trade demand to switch to the on-trade although at-home consumption will remain well-established.
The underlying earnings (EBITDA) is in line with expectations so, coupled with a rise in revenue, it means earnings will come in ahead of forecasts.
Revenue for the year to December 31 shed 3% to £252mln, with UK dropping 22% to £103, US jumping 23% to £58mln, Europe up only 1% to £65mln and ‘rest of the world’ surging 58% to £25mln.
Cash at year-end was £143mln.
“This is a strong result by Fevertree in a tough year, and reflects the strength of the brand,” analysts at Liberum commented.
“The increased consumer trial and awareness in the US should bode well for the future, and the beginning of local production in the US in December 2020 should provide gross margin tailwinds going forward. The success in the rest of the world is also indicative of the global opportunity ahead of the company.”
Shares jumped 4% to 2,392p early on Thursday.