Investors showed a thirst for Fevertree Drinks (LON:FEVR) after the premium mixers supplier flagged a ‘solid start’ to FY26. The company also said it remains ‘confident’ of meeting full-year forecasts.
As predicted by Sharesify in our recent preview piece, the tonic water-to-ginger beer supplier also announced a further £30 million extension to its ongoing share buyback programme.
More to come from Molson Coors?
In today’s AGM update, the soft drinks group served up positive news relating to its transformational partnership with Molson Coors (NYSE:TAP) in the US. This is Fevertree’s biggest growth market.
Fevertree’s distribution partnership with Molson Coors has moved beyond the initial transition phase, supported by the launch of a first national US marketing campaign. Encouragingly, the tie-up has already started to deliver new account wins and ‘increasing distribution and momentum’, according to Fevertree.
Investors have been fretting over the impact of soaring energy costs on Fevertree’s margins. So there was relief as the company stressed its glass costs are fully hedged for 2026.
Guided by CEO Tim Warrillow, Fevertree added that it has ‘significantly extended coverage’ through 2027 and into 2028 for energy. Furthermore, the company has increased its hedging position ‘across all other significant cost components into 2027’.
Investing for growth
Warrillow insisted his charge is ‘well placed to drive long-term growth across our markets as both a premium mixer and soft drink brand and this year we are significantly increasing marketing investment and innovating to support our growth ambitions.
‘Notwithstanding the current uncertainty in the geopolitical backdrop, we are well hedged from a cost perspective and remain confident in achieving market expectations for both adjusted revenue and EBITDA.’
FY26 consensus calls for a rise in sales from £375.3 million to £402.1 million and a pre-tax profits jump from £29.9 million to £40.4 million.
Fevertree shares have drifted lower in recent months. Investors have been weighing the impact of a weak spirits market on its recovery prospects.
The colas-to-cocktail mixers seller also faces competition from Schweppes. Another threat comes from Fentimans, the soft drinks-to-mixers business recently bought by AG Barr (LON:BAG).
Today’s update went down well with investors for a number of reasons. Firstly, Fevertree highlighted further share gains across key markets including the UK, Europe and the US. Secondly, the company called out positive progress with its strategy to diversify beyond tonic water. There is clear evidence the brand’s relevance as both a mixer and premium soft drink is increasing.
And thirdly, the £30 million extension to the share buyback shows confidence in the group’s cash generation and growth prospects. This builds on the £100 million buyback completed in FY25 and the ongoing £30 million tranche, of which £18.9 million had been returned as of 5 June.
Read the press release here: https://investors.fever-tree.com/
