Fevertree uncertain about impact of Covid-19 ahead of full-year results
The producer of premium drink mixers will unveil its full-year results this month, but the company remains unsure of the impact the coronavirus pandemic has had on its performance.
Fevertree Drinks is set to unveil its full-year results this month, but the company is unable to quantify the impact the coronavirus pandemic will have on its overall performance in 2020.
In March, the producer of premium drink mixers told investors that it is unable to give guidance for 2020 as a result of the ongoing Covid-19 outbreak, with the company opting to postpone the unveiling of its full-year results to April.
Fevertree said that trading in the first two month of 2020 was in line with the board’s expectations, with strong sales recorded across all its regions, particularly in the US market.
‘However, given the current high level of uncertainty it is too early to quantify the impact the Covid-19 crisis will have on the outturn for the remainder of the 2020 financial year and therefore the board is not able to provide financial guidance at this stage,’ Fevertree said in a statement.
Balance sheet remains ‘extremely secure’
Despite uncertainty ahead of its full-year results, the drinks maker reassured investors that the company remains ‘extremely secure’ from a financial perspective.
‘We are debt free, with a year-end cash position of £128 million is underpinned by strong cash flows,’ Fevertree said.
‘The group's unique asset light, outsourced business model means we have a low fixed cost base, a small, dedicated team and the flexibility to manage the significant challenges ahead.’
Fevertree shares under pressure in 2020
It has been a challenging first quarter for the drinks maker, a fact reflected in its share price, with the stock falling 56% to hit a low of 900p a share on 23 March – down from £20.91 at the start of the year.
Since then, the stock has clawed back some of its early losses, with Fevertree trading at £14 a share as of 15:00 (GMT) on Monday.
However, analysts at RBC Capital Markets and Deutsche Bank both downgraded their price target for the stock in April to £11 and £12.50, respectively.
Based on Fevertree currently trading at £14 levels, the two investment banks believe the stock could slide between 10% - 21% lower over the course of the year.
How to trade stocks with IG
Create an IG Trading Account or log in to your existing account
Enter ‘Fevertree Drinks’ in the search bar and select it
Choose your position size
Click on ‘buy’ or ‘sell’ in the deal ticket
Confirm the trade
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
Please see important Research Disclaimer.
React to global volatility
Market volatility continues as coronavirus concerns amplify. Trade with IG and take advantage of:
- Tight spreads – from just 1 point on major indices, and 2.8 on US crude
- Guaranteed stops – they’re free to use, and only incur a fee when triggered
- Round-the-clock assistance – our highly skilled team are available when you need support
Live prices on most popular markets
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.