Fever-Tree ups dividend despite profits drop as CEO says tonic-maker to continue global mixer expansion

High-end British tonic maker Fever-Tree is to push ahead with global growth plans after reporting soaring US and Australian revenues despite the pandemic.

The company, which pre-pandemic saw so-called 'on-trade sales' - sales across hospitality and leisure - account for around 45% of group revenue, said total revenues for the year to December 31 were down 3% on 2019 to around £252 million after a “resilient” performance. Gross profits were down 12% on 2019 to £116.3 million.

Bosses highlighted the mixer-maker's "asset light business model" and cash on hand - and announced the firm would up its full year dividend by 4% to 15.68p per share "reflecting our financial strength... and confidence in the business".

UK sales were down 22% at £103.3 million, but overall revenues in its newer US market were up 23% at £58.5 million.

Co-founder and chief executive, Tim Warrillow, said he is expecting a "gradual" return to on-trade revenues, and that his teams are "working closely with our on-trade customers as they prepare for re-opening across our regions".

As pubs and bars reopen, the company said it believes on-trade sales will help group revenues increase by between 12% and 16% in 2021.

Fever Tree noted that it has "expanded our team across all our regions, as well as acquiring our sales agent in Germany, and began local production in the US for the first time" in the period.

The firm will this summer embark on a new campaign with Smirnoff in the UK, as it attempts to grow in the tequila and vodka categories - which both have larger consumer bases globally than gin. There are plans to roll out the brand's pink sparkling grapefruit, used for making home-crafted Palomas with tequila, further across the US.

Warrillow told the Standard: "We are now the market leader by value in the mixer category by 40.1%, with Schweppes around 33%. We are now in more households than any other mixer brand for the first time ever - and that is pretty unique as a premium product.

"What excites me about these results is that there isn't just a US growth opportunity - it's all around the world. We grew 108% in Australia.

"This business to date has been largely built on gin and tonic, but we have been developing our range proactively over the last few years and to deliberately target different spirits categories."

Diageo recently revealed that sales of the firm’s tequilas were up 80% in the second half of 2020, with its Casamigos brand -bought for a reported $700 million from George Clooney in 2017 - seeing a 139% sales bump in the period.