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
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
React to global volatility
Market volatility continues as coronavirus dominates the global agenda. Trade with us to 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 you’ll only pay a small fee if they’re triggered
- Round-the-clock assistance – our highly-skilled team are on hand to support you
Live prices on most popular markets
You might be interested in…
Find out what charges your trades could incur with our transparent fee structure.
Discover why so many clients choose us, and what makes us a world-leading provider of spread betting and CFDs.
Stay on top of upcoming market-moving events with our customisable economic calendar.