Fever-Tree warns of flatter UK store sales as drinkers rein in spending

Upmarket tonics maker Fever-Tree, which has had a remarkable run of UK growth, on Wednesday cautioned that a slowdown of consumer spending here will hit revenues.

The premium mixers maker warned that the performance in its UK off-trade business, which supplies supermarkets, has been behind expectations in the second half.

The AIM-listed firm pointed to slower consumer spending and last year’s sales getting a boost from the football World Cup and a royal wedding.

Fever-Tree expects full-year sales to December 31 to be between £266 million and £268 million. The City had been expecting £275 million.

Shares in the firm dropped before recovering to jump 214.5p, or more than 11%, to 2073p.

Fever-Tree floated at 134p a share in November 2014 and has benefited from a surge in customers seeking more premium mixers for gins and whiskies.

Investors today looked to be impressed by Fever-Tree outlining how other parts of the business are doing well. It said US growth has improved on the back of new distribution deals.

Meanwhile UK pub sales have performed well, and the company said the retail store sale woes are “short-term headwinds”.

Fever-Tree remains on track to deliver growth across all its regions with the US performing ahead of forecasts.

Boss Tim Warrillow said: “We continue to see growth across all four regions. Indeed, sales accelerated in our key growth markets of the US and Europe.”

Jefferies’ Edward Mundy said: “Shares have been weak ahead of speculation of downgrades — the trading statement could help clear the air.”

Stockbroker AJ Bell’s Russ Mould said: “There has been considerable speculation in recent months that Fever-Tree has been finding it harder to do business in the UK. That’s now confirmed in a trading update which is a tale of two countries. The US is doing better expected but the UK isn’t doing so well, specifically with sales in shops and supermarkets.”