MARKET REPORT: Posh tonic maker Fever-Tree regains its fizz following July profit warning as City breathes sigh of relief
Fever-Tree shares regained some of their sparkle as its latest results left nervous investors breathing a sigh of relief.
Following a profit warning in July, the tonic maker said it continued to face a ‘challenging’ global environment.
Staff shortages at one of its bottlers in the US has forced its UK business to ramp up production to plug the gap.
Cheers: Tonic and mixer maker Fever-Tree, which is valued at £1.1bn, has seen its shares fall 62% this year. But they rose 4.2% y as it reported a 14% rise in revenues
This has increased freight costs as goods are shipped from across the Atlantic to the US.
The company also warned that glass would be in short supply in the second half of the year though it is working to reduce the impact in 2023.
The company, which is valued at around £1.1billion, has seen its shares fall 62 per cent this year.
But they rose 4.2 per cent, or 39.5p, to 988.5p yesterday as it reported a 14 per cent rise in revenues to £160.9million for the six months to the end of June.
With costs rising, profits fell 30 per cent to £17.6million. Despite this, Fever-Tree stuck to its guidance for the full year in a boost to shareholders.
It expects revenue of £355million to £365million and profit of £37.5million to £45million. Liberum said the company’s foothold in international markets ‘continues to be a source of optimism for the stock’.
Stock markets around the world slammed into reverse as investors bet another aggressive round of interest rate hikes was coming to combat rampant inflation.
Stock Watch – Tungsten West
Tungsten West is pressing ahead with plans to develop the Hemerdon mine near Plymouth it bought in 2019.
The Devon-based mining company agreed a royalty sale worth around £26m with a global mine royalty investment fund.
Tungsten plans to use this money – along with an additional £5million to £10million it hopes to secure – to finance the project which it expects to complete before the third quarter of next year.
Shares rose 18.8 per cent, or 4.5p, to 28.5p.
Official figures in the United States showed inflation fell from 8.5 per cent in July to 8.3 per cent in August – but this was higher than expected and sent shockwaves through financial markets.
Having spent much of the day in positive territory, the FTSE 100 fell 1.2 per cent, or 87.17 points, to 7385.86 and the FTSE 250 slid 1.8 per cent, or 346.66 points, to 19167.21.
Wall Street was also sharply lower. The inflation figures in the US overshadowed better news in the UK where unemployment fell to 3.6 per cent, the lowest since 1974.
In London, BT shares fell despite Deutsche Bank’s view that the telecoms giant could benefit from scrapped tax rises, price rises on the back of rising inflation and a stronger sterling.
The broker raised the stock’s rating to ‘hold’ from ‘sell’, but shares in BT dropped 1.2 per cent, or 1.75p, to 142.75p.
Among the mid-caps, fund manager JTC enjoyed a rise in revenue and profit as it hailed ‘tremendous opportunities for the group moving forward’.
The company said it is ‘confident’ of delivering revenue and profit ahead of market expectations. In its half-year results, revenue soared 38.8 per cent to £93million while profit surged 27.3 per cent to £25.3million.
Analysts expect revenue for the year to hit £183million and profit to reach £62.6million.
With results falling in line with their expectations, Shore Capital reiterated its ‘buy’ rating as JTC shares climbed 9.75 per cent, or 75p, to 844p.
Shares in Petra Diamonds shimmered after the mining company more than doubled its profit to post record full-year results.
Petra reported a 103 per cent rise in profit to £229million ($265million) for the year to the end of June.
This smashed analyst estimates of £206million ($239million) and the company’s previous record of £168million ($195million) in 2018.
Having improved its cash flow by 91 per cent, Petra said it wants to reduce its debt and announced a tender offer for £130million ($150million) which it expects would help save up to £13million ($15million) a year in interest expenses. Shares rose 4.8 per cent, or 5p, to 110p.
There were also reasons to cheer for investors in Oxford Nanopore following the group’s half-year results.
The gene sequencing firm, which supplied Covid testing kits, said its revenue soared 107 per cent to £122.3million in the six months to the end of June. Shares rose 4.2 per cent, or 11.5p, to 283.5p.
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