Proactive Investors - ‘It was the best of times, it was the worst of times,’ is what a Dickensian investor of drinks companies Fevertree and Britvic (LON:BVIC) may have been heard uttering on Thursday.
Worst of times?
Fevertree Drinks (LON:FEVR), the tonic company, missed revenue expectations by more than expected on Thursday, but modern-day buyer Liberum claimed it isn’t quite the worst of times.
Revenues for the group came in at £364 million in 2023, an increase of 6% year on year, but down on consensus estimates by between 7% and 8%, Liberum analysts said.
A weak performance in Europe, led by subdued consumer sentiment in several countries, most specifically in Germany, was the key driving force for the revenue miss.
However, as a buyer, the boutique broker pointed out how the tonic manufacturer achieved margin guidance despite missing revenue forecasts by £20 million.
“[This] gives us confidence that the company has secured significant cost decline and is likely to deliver and beat margin expectations for next year,” Liberum said.
Looking forward, Fevertree hopes sales will grow by 8%, with adjusted EBITDA margins at 15%.
Liberum targets a 1,300p share price for the stock, which was trading at around 1,000p on Thursday.
Best of times?
Britvic PLC, which owns brands like Robinsons, J2O and Tango, lifted around 1.5% to 868p after it reported both revenue and volume growth during the festive period.
It's believed the group is past the worst of both raw material inflation and weakened consumer spending, analysts at research company Third Bridge argued.
However, the London-listed company was still required to lift prices and adjust recipes, albeit with little public backlash.
Sales across the group lifted over 12%, while volumes jumped by 6.4%, a result of what the company claims is a “clear growth strategy”.
“We remain confident of achieving growth this year within the range of market expectations, as well as continuing our track record of delivering superior returns longer term," Simon Litherland, Britvic’s boss, said in a statement.
A wider painting of the Britvic picture will be available in May when the group updates on its interim results.