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Fever-Tree expects 39% revenue growth in 2018

Tonic water producer Fever-Tree has released its 2018 forecasts and now expects full-year revenue to increase by 39% to £236 million (US$309m).

Fever-Tree “remains optimistic about the long-term global opportunity ahead”

The carbonated mixer producer witnessed “very strong” revenue growth of approximately 53% in the UK with a “robust rate of sales growth” in the on- and off-trade. The growth was attributed to an “outstanding” summer trading period and a “strong performance” during Christmas.

In the US, the firm reports “significant operational progress” in the first period of direct management of the region. Full-year revenue in the US grew by about 21% year-on-year, with growth “accelerating” in the second half.

Fever-Tree also said its partnership with US distributor Southern Glazer’s Wine & Spirits “continues to develop well” with “positive progress” in the off-trade.

In continental Europe, full-year revenue is estimated to grow by 24% with “positive momentum” across key territories.

Revenue for the rest of the world region is expected to increase by 48% following an “encouraging performance”.

Year-end net cash position is projected to be in line with the board’s expectations. Outcome for the full-year is predicted to be “comfortably ahead” of the board’s expectations.

The trading update was released ahead of the company’s preliminary results on 26 March 2019.

Tim Warrillow, co-founder and CEO of Fever-Tree said: “We have seen very strong momentum across the business during 2018.

“The UK delivered an exceptional performance while Europe has seen positive performance resulting in growth accelerating in the second half. We are particularly encouraged by the progress to date in the USA and the strong platform for further growth this provides.

“The progress we have seen during the last 12 months means we enter 2019 very well positioned and remain optimistic about the long-term global opportunity ahead.

“Drinking habits are changing. The rise of premium spirits and the advent of premium mixers has reinvigorated and re-established the quality and enjoyment of the long-mixed drink, be it a gin and tonic, vodka and ginger beer or whiskey and ginger ale to name but a few.

“Fever-Tree is at the forefront of this trend, broadening the appeal of the spirits category, drawing in new consumers and with it providing a genuine alternative to the beer and wine occasion.”

Last year, Fever-Tree confirmed its full-year revenue for 2017 grew 66% compared to the previous year and said it intends to “reinvigorate” dark spirits with its range of mixers.

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