Share Name Share Symbol Market Type Share ISIN Share Description
Fevertree Drinks Plc LSE:FEVR London Ordinary Share GB00BRJ9BJ26 ORD 0.25P
  Price Change % Change Share Price Shares Traded Last Trade
  25.00 1.15% 2,195.00 64,519 09:56:14
Bid Price Offer Price High Price Low Price Open Price
2,194.00 2,199.00 2,221.00 2,175.00 2,213.00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Beverages 237.45 75.58 53.38 41.1 2,549
Last Trade Time Trade Type Trade Size Trade Price Currency
09:56:14 AT 25 2,195.00 GBX

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Fevertree Drinks Daily Update: Fevertree Drinks Plc is listed in the Beverages sector of the London Stock Exchange with ticker FEVR. The last closing price for Fevertree Drinks was 2,170p.
Fevertree Drinks Plc has a 4 week average price of 2,078p and a 12 week average price of 1,985p.
The 1 year high share price is 3,290p while the 1 year low share price is currently 1,985p.
There are currently 116,127,158 shares in issue and the average daily traded volume is 539,715 shares. The market capitalisation of Fevertree Drinks Plc is £2,548,991,118.10.
trying2getrichquick: Fevertree Drinks Market Cap - UK£2.8b Last Updated - 2019/09/29 22:01 UTC Executive Summary Fevertree Drinks Plc, together with its subsidiaries, develops and supplies premium mixer drinks in the United Kingdom, the United States, Europe, and internationally. Snowflake Fundamentals Flawless balance sheet with solid track record. Share Price & News How has Fevertree Drinks's share price performed over time and what events caused price changes? Latest Share Price and Events Market Performance 7 Day Return 0.6% FEVR 2.1% GB Beverage 0.2% GB Market 1 Year Return -32.9% FEVR 15.7% GB Beverage -1.8% GB Market Return vs Industry: FEVR underperformed the UK Beverage industry which returned 15.7% over the past year. Return vs Market: FEVR underperformed the UK Market which returned -1.8% over the past year. Share holder returns FEVR Industry Market 7 Day 0.6% 2.1% 0.2% 30 Day 7.1% -4.7% 3.3% 90 Day 4.8% -3.0% -0.4% 1 Year -32.5%-32.9% 18.9%15.7% 2.8%-1.8% 3 Year 153.1%149.6% 62.1%50.3% 21.3%6.8% 5 Year n/a 112.2%85.4% 36.2%7.3% Price Volatility Vs. Market Valuation Is Fevertree Drinks undervalued based on future cash flows and its price relative to the stock market? Analysis Checks 0/6 44.15x Price to Earnings (PE) ratio Intrinsic Value Based on Future Cash Flows 25.8%Overvalued Current PriceUK£24.21Fair ValueUK£19.2520% UndervaluedAbout Right20% Overvalued Undervalued: FEVR (£24.21) is trading above our estimate of fair value (£19.25) Significantly Undervalued: FEVR is trading above our estimate of fair value. Price Based on Earnings }}}0x10x20x30x40x50x60x PE Ratio company 44.1x industry 25.2x market 16x PE vs Industry: FEVR is poor value based on its PE Ratio (44.1x) compared to the Beverage industry average (25.2x). PE vs Market: FEVR is poor value based on its PE Ratio (44.1x) compared to the UK market (16x). Price Based on Expected Growth }0x1x2x3x4x PEG Ratio company 4.2x Low PEG Ratio: FEVR is poor value based on its PEG Ratio (4.2x) Price Based on Value of Assets }}}0x5x10x15x20x PB Ratio company 14x industry 3.6x market 1.5x PB vs Industry: FEVR is overvalued based on its PB Ratio (14x) compared to the GB Beverage industry average (3.6x). Next Steps Explore potentially undervalued companies in the Food, Beverage & Tobacco industry. Future Growth How is Fevertree Drinks expected to perform in the next 1 to 3 years based on estimates from 11 analysts? Analysis Checks 3/6 10.5% Forecasted annual earnings growth Earnings and Revenue Growth Estimates GBPRevenueCash FlowEarnings Growth Rates20172018201920202021202220232024£0£500MActualEstimated Future Annual Growth Analysis company10.5%industry6.9% market12.5% forecast annual earnings growth company12.3%industry5.6% market4.1% forecast annual revenue growth Earnings vs Savings Rate: FEVR's forecast earnings growth (10.5% per year) is above the savings rate (1.2%). Earnings vs Market: FEVR's earnings (10.5% per year) are forecast to grow slower than the UK market (12.5% per year). High Growth Earnings: FEVR's earnings are forecast to grow, but not significantly. Revenue vs Market: FEVR's revenue (12.3% per year) is forecast to grow faster than the UK market (4.1% per year). High Growth Revenue: FEVR's revenue (12.3% per year) is forecast to grow slower than 20% per year. Earnings per Share Growth Estimates GBP 20172018201920202021202220232024£0.2£1 Historical Range of past estimates Analyst's estimate Range of estimates Future Return on Equity }}0%10%20%30%40% Future ROE (3yrs) company 26.4% industry 18.1% High Future ROE: FEVR's Return on Equity is forecast to be high in 3 years time (26.4%) Past Performance How has Fevertree Drinks performed over the past 5 years? Analysis Checks 5/6 48.6% Historical annual earnings growth Earnings and Revenue History GBPRevenueCash FlowEarningsOperating Expenses Growth Rate20132014201520162017201820192020£-50M£300M Past Earnings Growth Analysis company48.6%industry8.6% market13.4% past 5 years annual earnings growth company21.1%industry4.6% market6.8% last 1 year earnings growth Earnings Trend: FEVR's earnings have grown significantly by 48.6% per year over the past 5 years. Accelerating Growth: FEVR's earnings growth over the past year (21.1%) is below its 5-year average (48.6% per year). Earnings vs Industry: FEVR earnings growth over the past year (21.1%) exceeded the United Kingdom of Great Britain and Northern Ireland industry 4.6%. Return on Equity }}0%10%20%30%40% ROE company 31.7% industry 18.1% High ROE: FEVR's Return on Equity (31.7%) is considered high. Return on Assets }}0%2%4%6%8%10% ROA company 26.5% industry 8.5% ROA vs Industry: FEVR has a higher Return on Assets than the Beverage industry average last year. Return on Capital Employed }}0%10%20%30% ROCE last year 38.4% 3 years ago 27.6% ROCE Improving: FEVR has significantly improved its Return on Capital Employed over the past 3 years. Financial Health How is Fevertree Drinks's financial position? Analysis Checks 5/6 Financial Position Analysis GBP 20132014201520162017201820192020£0£250MNet worth GBPShort termLong termNet worth LiabilitiesAssets Short Term Liabilities: FEVR's short term assets (£189.9M) exceeds its short term liabilities (£36.7M) Long Term Liabilities: FEVR's short term assets (£189.9M) exceeds its long term liabilities (£1.5M) Debt to Equity History and Analysis GBPDebtNet worth (Equity)Cash 20132014201520162017201820192020£-50M£250M Debt Level: FEVR is debt free. Reducing Debt: FEVR currently has no debt however we can't compare to 5 years ago as we have no data for that period. Debt Coverage: FEVR has no debt, therefore it does not need to be covered by operating cash flow. Interest Coverage: FEVR has no debt, therefore coverage of interest payments is not a concern. Balance Sheet Assets Cash + Short termInvestmentsReceivablesInventoryPh230;Long term +Other Assets Liabilities + Equity EquityDebtAccountsPayableOtherLiabilities Inventory Level: FEVR has a low level of unsold assets or inventory. Debt Coverage by Assets: Insufficient data to determine if FEVR's debt is covered by short term assets. Dividend What is Fevertree Drinks's current dividend yield, its reliability and sustainability? Analysis Checks 0/6 0.80% Expected Dividend Yield Dividend Yield and Payments Analysis DPSFEVR DPSFEVR YieldBeverageMarket 201620172018201920202021202220232024£0£0.3 2.1% 1.4% 0.1% 0.6% Notable Dividend: FEVR's dividend (0.6%%) isn’t notable compared to the bottom 25% of dividend payers in the UK market (1.97%%). High Dividend: FEVR's dividend (0.6%) is low compared to the top 25% of dividend payers in the UK market (5.47%). Stable Dividend: FEVR is not paying a notable dividend for the UK market, therefore no need to check if payments are stable. Growing Dividend: FEVR is not paying a notable dividend for the UK market, therefore no need to check if payments are increasing. Current Payout to Shareholders 28%Now Retained byFevertree Drin…Paid to you Dividend Coverage: FEVR is not paying a notable dividend for . Future Payout to Shareholders 30%+3 yrs Retained byFevertree Drin…Paid to you Future Dividend Coverage: No need to calculate the sustainability of FEVR's dividend in 3 years as they are not forecast to pay a notable one for the UK market. Management What is the CEO of Fevertree Drinks's salary, the management and board of directors tenure and is there insider trading? 3.3yrs Average board tenure CEO Tim Warrillow (44yo) 0yrs Tenure UK£3,981,000 Compensation Mr. Timothy Daniel Gray Warrillow, also known as Tim, is a Co-Founder, Chief Executive Officer and Executive Director at Fevertree Drinks Plc. Mr. Warrillow joined a London-based advertising and branding a ... CEO Compensation Analysis GBPTotal CompensationSalaryFevertree Drinks EPS 2014201520162017201820192020£0UK£5m Compensation vs. Market: Tim's total compensation ($USD4.90M) is about average for companies of similar size in the UK market ($USD2.26M). Compensation vs Earnings: Tim's compensation has increased by more than 20% in the past year. Board Age and Tenure 3.3yrs Average Tenure 55yo Average Age Experienced Board: FEVR's board of directors are considered experienced (3.3 years average tenure). Insider Trading SOLDBOUGHTSold by companiesSold by individualsBought by companiesBought by individuals0-3 months3-6 months6-9 months9-12 months Insider Buying: FEVR insiders have bought more shares than they have sold in the past 3 months. Recent Insider Transactions AIM:FEVR Recent Insider Transactions by Companies or IndividualsDate Value Name Entity Role Shares Max Price 16 Aug 19 BuyUK£43,320 Jeff Popkin Individual 2,000 UK£21.66 25 Jul 19 BuyUK£289,561 Kevin Havelock Individual 13,298 UK£21.99 07 Dec 18 BuyUK£67,843 Jeff Popkin Individual 2,933 UK£23.17 11 Oct 18 BuyUK£167,946 Kevin Havelock Individual 5,727 UK£29.55 Ownership Breakdown General PublicIndividual InsidersPrivate CompaniesInstitutions Institutions Private Companies Individual Insiders General Public Management Team Charles Rolls (62yo) Co-Founder & Non-Executive Deputy Chairman Tenure: 0yrs Tim Warrillow (44yo) Co-Founder Tenure: 0yrs Compensation: UK£3.98m Andy Branchflower (40yo) Finance Director Tenure: 4.9yrs Compensation: UK£1.92m Saskia Stoop (35yo) Head of Marketing Tenure: 0yrs Claire Huntingford (38yo) Head of Supply Chain Tenure: 0yrs Charles Gibb Global Strategy Director & CEO of North American Tenure: 1.8yrs Oliver Winters Communications & IR Director Tenure: 0yrs Board Members Bill Ronald (63yo) Non-Executive Chairman Tenure: 6.3yrs Compensation: UK£125.00k Coline McConville (55yo) Independent Non-Executive Director Tenure: 4.8yrs Compensation: UK£58.00k Jeff Popkin (54yo) Independent Non Executive Director Tenure: 1.7yrs Compensation: UK£46.00k Kevin Havelock (61yo) Independent Non-executive Director Tenure: 1.7yrs Compensation: UK£46.00k Domenic De Lorenzo (55yo) Independent Non-Executive Director Tenure: 1.3yrs Compensation: UK£30.00k Charles Rolls (62yo) Co-Founder & Non-Executive Deputy Chairman Tenure: 0yrs Tim Warrillow (44yo) Co-Founder Tenure: 0yrs Compensation: UK£3.98m Andy Branchflower (40yo) Finance Director Tenure: 4.9yrs Compensation: UK£1.92m Company Information Fevertree Drinks Plc's company bio, employee growth, exchange listings and data sources Key Information Fevertree Drinks Plc logo Name: Fevertree Drinks Plc Ticker: FEVR Exchange: AIM Founded: 2013 Industry: Soft Drinks Sector: Food, Beverage & Tobacco Market Cap: UK£2.811b Shares outstanding: 116.13m Website: hxxps:// Fevertree Drinks Plc 186 -188 Shepherds Bush Road London Greater London W6 7NL United Kingdom Listings Ticker Exchange Primary Security Security Type Country Currency Listed on FEVR AIM (London Stock Exchange AIM Market) Yes Ordinary Shares GB GBP Nov 2014 FQVT.F OTCPK (Pink Sheets LLC) Yes Ordinary Shares US USD Nov 2014 FV8 DB (Deutsche Boerse AG) Yes Ordinary Shares DE EUR Nov 2014 Biography Fevertree Drinks Plc, together with its subsidiaries, develops and supplies premium mixer drinks in the United Kingdom, the United States, Europe, and internationally. The company’s products include Indian ... Company Analysis and Financial Data Status All financial data provided by Standard & Poor's Capital IQ.Data Last Updated (UTC time) Company Analysis 2019/09/29 22:01 End of Day Share Price 2019/09/27 00:00 Earnings 2019/06/30 Annual Earnings 2018/12/31 Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Credit: Simply Wall Street
christh: The summer was very good for fevertree as demand for drinks was high Despite the negativity in the share price the company is thriving and achieving its targets. It will make a similar announcement like previously that the results will be ahead its expectations. The management never dissapointed the market and the results always double or treble previous years. The US market share in mixers has been increasing and if the reach 40% or higher then it will establish itself and boost the share price in the £50 or higher. Growth is the key to this company and has always been delivered.
sogoesit: This week's Shares Magazine sees FT as a "bargain share"... buy now for good value in a few years: "WHY HAS THE SHARE PRICE BEEN WEAK? Shares in upmarket mixer brand Fevertree Drinks (FEVR:AIM) have been on something of a rollercoaster. Having started the year at roughly £22, they raced up to £32 by the end of May only to give back all their gains in the past two months. Investors have gone through a whole range of emo ons, from op mism and euphoria to disappointment and despondency. When the long-awaited rst-half results were released last week, revealing that sales growth had slowed to 13% and earnings growth had slowed to just 7%, many holders capitulated and sold out. The shares lost almost 10% on the day of the announcement, the second me this year that they have been heavily punished for not mee ng expecta ons. In common with other drinks companies Fevertree had a blow-out start to the summer last year thanks to a combina on of hot weather and big spor ng events which boosted UK sales. This year the summer has got o to a soggy start, and with no major events to celebrate. Sales have been steady but growth is well below last year’s levels. Ironically the rst-half results came out as much of the UK was experiencing its ho est July ever so it is quite possible that the third quarter will see a strong rebound in consump on but we won’t know for some me. The UK s ll represents roughly half of group sales so a slowdown to 5% growth in the rst-half has acted as a major drag on the numbers. WHAT COULD SPARK A RE-RATING? The major growth driver for Fevertree going forward is the US market, where it had shown reasonable growth for 10 years via its agent but decided 18 months ago to take a much more hands-on approach and manage it directly. The step-change occurred last summer when the group signed an exclusive on-trade distribu on deal with SGWS, the largest North American wine and spirits distributor. Given the size of the US market (es mated to be 16 mes the size of the UK mixer market) and the increasing trend towards premium drinks and mixers, even a small increase in its current 11% market share would mean a signi cant increase in sales and earnings over me. According to S&P Global Intelligence, pre-tax pro t is forecast to rise from roughly £75m last year to £106m in three years, bringing the price-to-earnings (PE) ra o down from 41- mes to 28- mes. Yes, the shares command a premium ra ng but we believe the company con nues to have a very strong outlook with scope to deliver large earnings growth for years to come. Current share price weakness may even spur takeover interest from trade players such as Diageo (DGE) and Unilever (ULVR), or private equity." I have no position any more. Last sales at around £22 although chart support at around £21.50.
fuji99: Stories on stocks change all the time as is the share price. So I won't be surprised if the trend is reversed next week with another story from another "analyst". For daytraders, the share price behaviour may appear illogical as they expected the drop to continue. For the long term holders, they ignore the share price daily fluctuations as these will appear as blips in a few years.
christh: Fevertree Drinks PLC 31.8% Potential Upside Indicated by Shore Capital Posted by: Amilia Stone 12th July 2019 Fevertree Drinks PLC with EPIC/TICKER (LON:FEVR) has had its stock rating noted as ‘Initiates/Starts’ with the recommendation being set at ‘BUY’ this morning by analysts at Shore Capital. Fevertree Drinks PLC are listed in the Consumer Goods sector within AIM. Shore Capital have set a target price of 2900 GBX on its stock. This now indicates the analyst believes there is a possible upside of 31.8% from today’s opening price of 2200 GBX. Over the last 30 and 90 trading days the company share price has decreased 368 points and decreased 875 points respectively. The 52 week high for the stock is 4120 GBX while the year low stock price is currently 2021 GBX. Fevertree Drinks PLC has a 50 day moving average of 2,655.27 GBX and a 200 day moving average of 2,739.27. There are currently 776,953,589 shares in issue with the average daily volume traded being 734,869. Market capitalisation for LON:FEVR is £2,542,023,488 GBP. hTtps://
fuji99: I am very interested to know what analysts or anyone else come with, if say one extrapolates just 5 - 10% capture of the US market by FeverTree. How this will boost its sales ? Extra £80, £100 million per year ? This will be the most exciting part of FEVR business - 10 times more than the UK and more than 3/4 times the whole of Europe. This is also what will kick start the share price to over £50+ within a year as soon as it flags up the distribution process in the US. The market usually anticipates well in advance any positive or negative for any company. So IMO I am expecting the share price to rise sharply as soon as positive noises start to come from the US. To me this will add at least 30% to the share price.
sogoesit: Sorry about that. Here's all of it, bamboo (The EPV bit is the last but one paragraph): "There can be no disputing that Fevertree Drinks' (FEVR) products and its share price are a phenomenon. Over the last few years its drinks – particularly its variety of premium tonics – have become deeply entrenched among Britain’s increasing number of gin and tonic drinkers. Its success is not only down to the taste and provenance of its products but is also a triumph of marketing and branding. If you walk into supermarkets you can quickly see that Fevertree totally dominates the shelf space allocated to tonic water. Many bars I have visited over the last year no longer stock Schweppes, only Fevertree. Not so long ago Schweppes was the go-to tonic of choice – in a very short space of time Fevertree has taken its place. The company has also proved itself to be a smart operator. It has no drinks manufacturing factories or bottling plants – these have been outsourced to third parties – and so hasn’t needed to tie up a lot of money in assets. When combined with the premium prices it can command for its drinks, the result has been one of the most outstandingly profitable businesses listed on the London Stock Exchange. Last year its profit margin was 33 per cent and its profits as a percentage of the money it had invested a whopping 48 per cent. Throw in rapid levels of sales growth and it’s not surprising that its share price has gone through the roof over the last few years. 2018 has been another very good year for the business as evidenced by this week’s trading update. Shareholders will have been delighted to have been told that profits “will be comfortably ahead of the board’s expectations”. We can only assume that these expectations are similar to those of City analysts who were expecting Fevertree to make pre-tax profits of £70.8m and earnings per share (EPS) of 49.8p. FEVR sales (£m) TABLE OMITTED Source: Company reports/my calculations Sales growth for the year was 39 per cent, which is an excellent result following growth of 66 per cent in 2017. The UK market continues to lead the way with impressive growth of 52 per cent. Based on the information the company has given in its trading statement, it is possible to look at the trend rates of growth in the second half of 2018 compared with the first half of the year. These are shown in the table above. UK sales growth has slowed – it had to – but is still pretty good, whereas growth in Europe and the US has accelerated, which is encouraging, because arguably they need to. If you were to constructively look for areas of potential weakness in Fevertree it is that its sales growth looks as though it is coming from too narrow a base – namely the UK and from tonic. For the company to meet the high expectations that continue to be reflected in the value of its shares, it needs to start growing significantly in the US, Europe and across different mixer drinks categories such as ginger ale and cola. The company still has a lot to prove here. The US market is key to achieving this goal as it is the biggest spirits market in the world. Here, as with other major markets, the shift to premium spirits is a strong and growing trend. The company has signed an exclusive distribution agreement with Southern Glazer’s Wines & Spirits in an attempt to get more of its mixers into US bars. It’s worth noting that Fevertree currently has sales of just £35m in the US compared with £55m in Europe and £134m in the UK. The potential to build a very big and profitable business clearly exists on paper, but the challenge is a tough one. Will American drinkers of premium bourbon mix it with Fevertree cola or stick with the iconic Coca-Cola and Pepsi brands? If they switch then the upside potential in Fevertree’s profits – and possibly its share price – is immense. In some ways, Fevertree has had some luck on its side in the UK. It is difficult not to see the response of Schweppes – still the market leader in terms of volumes sold – as anything other than slow and complacent. Its 1783 premium tonic is actually a very nice drink – possibly better than Fevertree’s – but it is virtually invisible in the shops and bars. Will Coca-Cola and Pepsi be as complacent in the US? Fevertree’s share price has unsurprisingly reacted well to its trading update. The shares peaked at over £40 in September last year, but fell back in the general market decline which saw highly valued shares suffer more than most. Despite the pullback, the shares are still richly valued. Let’s say that analysts upgrade 2018 and 2019 profit forecasts by 15 per cent. That would give EPS of 56.6p for 2018 and 65.9p for 2019. At 2,980p at the time of writing, that would put the shares on a trailing PE ratio of 52.6 times, falling to 45.2 times in 2019. I always try to get a feeling of how much of a company’s share price is explained by its current profits and how much is reliant on future profits growth. Ideally, you don’t want to pay too much for future growth – if you are a long-term rather than a momentum investor – and if more than half of the share price is dependent on it, I generally tread carefully. Taking my revised estimate of Fevertree’s 2018 operating profits of £81.2m, taxing them at 19 per cent, dividing that by my required return of 8 per cent and adding an estimate of cash balances gives an earnings power value – the value of a share if its current profits stayed unchanged forever – of 780p per share. This explains just over a quarter of the current share price with three-quarters of it explained on future profits growth. This leaves me with a view of the business and its shares that I have held for a while. Fevertree is an outstanding business but its share price requires it to keep on over delivering for many years to come. It has been very good at doing this, but it now faces a tougher challenge.
llama1978: I think it’s a great time to launch non-alcoholic spirits with more people seeming to be tee-total than ever before but I’d never pay £20 a bottle for a non-alcoholic spirit! May as well buy a bottle of elderflower cordial for about £18 less for about 4 times the volume... Good to see as all rally in the FEVR share price over the last few days. No idea why. Maybe people are realising that it’s the best time to snap up a bargain in various shares like these.
sogoesit: Excerpt from the 12 October Phil Oakley article re FEVR that i mentioned in my previous post: "Let’s see how Fevertree measures up against these tests. Fevertree cash conversion: 2013 2014 2015 2016 2017 Adjusted operating profit 5.0 9.2 17.3 34.4 56.4 Adjusted Ebitda 5.6 10.0 18.2 35.8 58.7 Cash generated from operations -0.5 6.2 12.9 25.0 43.4 Exceptional cash items 2.3 1.1 Adjusted cash generated from operations 1.8 7.3 12.9 25.0 43.4 Op cash as % of op profit 36.3% 79.2% 74.6% 72.6% 76.9% Op cash as % of Ebitda 32.4% 72.9% 70.9% 69.7% 73.9% Free cash flow -2.9 3.1 9.7 19.0 32.7 Exceptional cash items 2.3 1.1 0.0 0.0 0.0 Adjusted free cash flow -0.5 4.3 9.7 19.0 32.7 Adjusted profit after tax 7.4 13.9 28.0 46.1 Free cash flow as % of profit after tax 57% 70% 68% 71% Not great seems to be the answer. Its operating and free cash flows are significantly lower than its profits. So what is going on here? Are investors to think that Fevertree’s profits are not as high as it says they are? Fevertree working capital cash flows (£m) 2013 2014 2015 2016 2017 Change in trade and other receivables -3.3 -2.4 -8.4 -13.6 -26.4 Change in inventories -1.0 -1.8 -2.0 -4.1 -2.7 Change in trade and other payables 0.4 1.5 5.1 7.6 13.8 working capital cash flow -3.8 -2.7 -5.3 -10.2 -15.3 2013 2014 2015 2016 2017 Trade & other receivables 6.0 8.4 16.8 30.4 55.6 Revenue 20.6 34.7 59.3 102.2 170.2 % of revenue 29.1% 24.2% 28.3% 29.7% 32.7% Going back and looking at the cash flow statement, the reason for Fevertree’s poor cash conversion is due to significant cash outflows from working capital – mainly an increase in receivables; invoices unpaid at the end of the year. These receivables represent sales – and the profits from them – that have been booked in the income statement but where the cash has not been received from customers. Fevertree is a very fast-growing business where it is quite normal to offer customers credit terms in order to grow sales. The question is whether the company is becoming too reliant on credit in order to grow and meet the expectations of investors. The company is clearly not overtrading – this is when the increases in sales are too fast and put a strain on the company’s finances – but the growth in receivables has been growing faster than sales and now accounts for nearly a third of sales, which is higher than other quoted soft drinks companies (Vimto owner Nichols is the next highest with receivables at 26 per cent of sales). As long as these receivables turn into cash – and bad debts are not a problem for Fevertree – there is no reason to question Fevertree’s profits in my opinion. That said, for me, it is something that needs watching as extending credit can only go so far in driving a company’s sales growth. How much is a company investing? Fevertree capex ratios 2013 2014 2015 2016 2017 Capex 0.2 0.3 0.4 0.8 1.2 Depreciation & Amortisation 0.6 0.8 0.8 1.0 1.1 Operating cash flow -0.5 6.2 12.9 25.0 43.4 Capex/Depreciation 28.5% 33.4% 42.9% 84.9% 110.0% Capex as % of operating cash flow -33.4% 4.3% 2.8% 3.3% 2.9% Most companies need to invest in their assets in order to keep their business running smoothly. There are two checks on how much or how little a company is investing that can be worked out from a cash flow statement. The first one is comparing capex with depreciation. Investing less than depreciation for a period of time can be a sign of underinvestment in a business that will eventually damage its sales and profits. In rarer cases, it can also be a sign of very prudent depreciation policies – and conservatively stated profits. Fevertree’s investment levels are about in line with its depreciation expense. Given its low investment needs, this is nothing to worry about. The other measure of investment rate is looking at capex as a percentage of operating cash flow – how much money is reinvested as a percentage of the cash generated from trading. Fevertree has a very low investment rate. One of the reasons why Fevertree has been such a good investment in recent years is because it hasn’t needed to spend a lot of money on new assets in order to grow. Looking for growing companies with low ongoing investment requirements can be a happy hunting ground for investors. A check on dividend safety The biggest reason for a dividend to be cut is a lack of free cash flow to pay it. A very quick and powerful test of dividend safety is comparing a company’s free cash flow with the cost of its annual dividend – known as free cash flow dividend cover. Cover of less than one for a prolonged period of time could be a sign of a company borrowing to pay its dividend, which can’t go on indefinitely. Fevertree free cash dividend cover (times) 2013 2014 2015 2016 2017 Free cash flow -2.9 3.1 9.7 19.0 32.7 Dividends paid 0.0 0.0 -1.2 -4.4 -8.9 Free cash dividend cover (times) n/a n/a 7.8 4.3 3.7 Fevertree’s current dividend looks very safe and has scope to grow If you come across a share with a very high dividend yield (say more than 6 per cent) it might be a good idea to check out the free cash dividend cover. High yields usually occur because there are lots of doubts as to whether the dividend can be maintained. If there isn’t enough free cash flow to pay it you might be better off investing your money elsewhere. Using cash flow to measure financial performance Fevertree free cash flow margin: 2013 2014 2015 2016 2017 Revenue 20.6 34.7 59.3 102.2 170.2 Free cash flow -2.9 3.1 9.7 19.0 32.7 Free cash flow margin -14.0% 9.0% 16.4% 18.6% 19.2% A free cash flow margin shows the percentage of a company’s revenues that turns into free cash flow. Fevertree is impressive on this measure with a high and growing free cash flow margin. Anything consistently higher than 15 per cent should be seen as a sign of a very good business. Another option of calculating cash returns that doesn’t come entirely from numbers in a cash flow statement is something known as the cash return on cash capital invested (CROCCI). It compares a company’s Ebitda with the cash capital invested in the business. It can be used as an alternative to calculating return on capital employed (ROCE), which uses operating profits and capital employed that have both been reduced by a non-cash depreciation expense. The calculation for Fevertree is shown in the table below. On this basis, its financial performance is very impressive indeed. Fevertree CROCCI 2013 2014 2015 2016 2017 Adj Ebitda 5.6 10.0 18.2 35.8 58.7 Total assets 57.4 67.3 85.3 118.2 171.8 Accumulated depreciation & amortisation 0.6 1.4 2.8 3.2 4.3 Less: Non-interest-bearing current liabilities (NIBCL) -3.7 -5.0 -11.2 -20.9 -35.6 Cash capital invested 54.3 63.6 76.9 100.5 140.5 CROCCI 10.4% 15.7% 23.6% 35.7% 41.8% NIBCL is calculated by taking current liabilities from the balance sheet and taking away any short-term borrowing in that number. The sources and uses of cash This isn’t used much, but is a useful way of understanding where a company gets its cash from and what it does with it. It is just another way of looking at cash flows and involves rejigging the cash flow statement. The difference between cash coming in and going out shows the change in the cash during the year. Fevertree sources & uses of cash (£m) 2013 2014 2015 2016 2017 Sources of cash: Cash from operations -0.5 6.2 12.9 25.7 43.4 Interest received 0.0 0.0 0.0 0.1 0.1 New loans 50.1 0.0 0.0 0.0 0.0 New equity 0.5 53.4 0.0 0.0 0.2 Total cash in 50.0 59.6 12.9 25.8 43.6 Uses of cash: Income taxes paid -0.7 -1.3 -2.5 -5.0 -9.4 Capex -0.2 -0.3 -0.4 -0.8 -1.2 Acquisitions -44.2 0.0 0.0 0.0 0.0 Interest paid -1.5 -1.5 -0.3 -0.1 -0.1 Loans repaid -0.2 -50.3 -0.4 0.0 0.0 Share repurchases Dividends paid -1.2 -4.4 -8.9 Other Total cash out -46.7 -53.4 -4.9 -10.4 -19.6 Change in cash 3.4 6.2 8.1 15.3 24.0 We can see that since 2013 Fevertree has moved from being a company that got most of its cash from loans and spent it on buying a company to one that gets most of its cash from selling products and using it to pay taxes and dividends. Using free cash flow to value shares The free cash flow yield is often used as a way of measuring how cheap or expensive a share is. High yields are seen as a sign of cheapness and vice versa. You can calculate it by comparing the free cash flow with the company’s market capitalisation or by calculating the free cash flow share and dividing that number by the current share price. Fevertree free cash flow yield 2017 2018F 2019F 2020F FCF per share(p) 28.2 37.8 48.3 57 Share price(p) 2954 2954 2954 2954 Free cash flow yield 0.95% 1.28% 1.64% 1.93% Source: SharePad High quality, fast-growing businesses such as Fevertree are rarely available for a cheap price. Yet, even after a significant share price fall over the past few weeks, Fevertree shares look very expensive on the basis of their current and expected free cash flow yield. Free cash flow per share is expected to double between 2017 and 2020, but the shares still only offer a free cash flow yield of less than 2 per cent based on 2020 forecasts. In a world of rising interest rates on bonds, that doesn’t look great value unless free cash flow forecasts increase significantly as they have done in the past. Free cash flow yield is also a popular way of screening for undervalued takeover targets. A free cash flow yield of 10 per cent or more might attract the attention of bargain hunters, providing the free cash flow is sustainable."
christh: 5 Top AIM Stocks Held by Fund Managers ------------------------------------------------------------------------- Fevertree, ASOS and have been just three AIM success stories in recent years. Here are the companies that top UK smaller company fund managers like right now David Brenchley 7 February, 2018 | 8:52AM Fevertree tonic mixer, gin, top AIM stocks, fund managers While they come with plenty of risk, smaller companies can offer investors better growth opportunities than their larger counterparts. The better performing funds of 2017 had growth mandates, meaning the UK funds that did best were looking for opportunities in indices with smaller constituents than the blue-chip FTSE 100. The Alternative Investment Market (AIM) was launched in 1995, as a place for smaller UK companies to float on. It offers investors willing to take on an extra level of risk in return for the potential of greater returns some cracking companies. The likes of ASOS (ASC), (BOO) and FeverTree (FEVR) all have market capitalisations of over £2 billion – more than some FTSE 250 firms. Despite their high profiles, they are still happily holding onto their AIM listing. They, and many others, have helped the AIM All-Share outpace the FTSE 100 fivefold and the FTSE 250 by two times over the past three years. We screened the five funds in the Investment Association UK Smaller Companies sector that are rated Gold or Silver by Morningstar analysts to check out which stocks they are holding using the Morningstar X-Ray Tool. Fevertree Unsurprisingly, Fevertree is top of the pops among smaller company funds given its stellar success and accounts for a good amount of three of the five portfolios. Old Mutual UK Smaller Companies, the only Gold-rated fund in our list, has a position of more than 4%. Old Mutual is the largest institutional holder of the stock, owning almost 10% and second only to Charles Rolls, who founded the company with Tim Warrillow. It floated on the stock market back in November 2014 and has surged 1,770% since to trade at a shade over £25 today. The firm makes premium carbonated mixers for alcoholic beverages, including tonic water for use with gin – a fast-growing drink for Britons. While the valuation has run away with itself, both revenues and sales have grown consistently by around 70% year-on-year since 2014. Fevertree said in a trading update 12 days ago that results for full-year 2017, due out in March, will be “comfortably ahead of market expectations”, so expect some further juice in the share price in the short term. SLI UK Smaller Companies has 3% of its portfolio in Fevertree, while River & Mercantile UK Equity Smaller Companies has 2.5%. ------------------------------------------------------------------------- Smart Metering Systems (SMS) Another “ten-bagger”, Smart Metering Systems floated in 2011 at 60p per share. It currently trades hands at 740p – growth of 1,133%. The market cap stands at £669 million. This time, Old Mutual is the largest shareholder, having got in at the initial public offering and Dan Nickols’ fund has recently upped its stake. It currently represents 2.88% of his portfolio, 4.23% of the River & Mercantile fund and 2.29% of the Standard Life offering. The Glasgow-based company owns and operates gas and electricity meters on behalf of major energy companies like Centrica, E.ON, Gazprom and SSE. Results for the six months to June 30 2017 saw SMS increase revenue by 14% to £36.8 million with a slight improvement in pre-tax profits but decrease in earnings per share of 10%. ------------------------------------------------------------------------- First Derivatives (FDP) Capitalised at just over £1 billion, First Derivatives is a more seasoned listed company. Its share price has doubled since the start of 2017 and is the largest holding in the Standard Life fund at 5% of assets. The Old Mutual offering has a small position. It’s not widely owned by institutions, with chief executive and founder Brian Conlon still hanging on to around a third of shares. It’s also the second largest holding in the Bronze-rated Slater Growth Fund. First Derivatives provides software products and consulting services to institutions in the finance, technology and energy sectors. It also supplies technology to enable the Red Bull racing team to analyse data during Formula 1 Grand Prix races. Its results for the six months to 31 August 2017 showed revenue up 21% and adjusted pre-tax profits up 13%. Chairman Seamus Keating said full-year performance is expected to be ahead of the board’s expectations. ------------------------------------------------------------------------- GB Group (GBG) Cyber security firm GB Group has been a listed company for more than 25 years, but moved to AIM in August 2010. Then trading at 25p, it’s now up to 429p. GB provides identity verification services to prevent fraud to blue-chip names such as carmaker Ford, apparel seller Nike and global banking giant HSBC. The share price had a wobble late last year, falling 40% in the space five weeks to trade at 210p after the election of Donald Trump as President of the United States in November. It’s bounced back since, though, more than doubling. GB is highly cash generative with an experienced and incentivised management team, according to sellside broker finnCap. It has seen long-term double-digit organic growth and has recurring revenue streams. A forecast yield of 1% for 2018 is decent for a growing company, especially considering the dividend is growing at 10%-plus every year and is well covered by earnings. ------------------------------------------------------------------------- Octopus Investments, a provider of venture capital trusts, is the largest shareholder at over 10% with Standard Life Aberdeen and Canaccord Genuity next. The SLI fund has a 2.5% position in GB and Artemis UK Smaller Companies has 1.3%. ------------------------------------------------------------------------- Blue Prism (PRSM) Blue Prism is another success story for AIM’s tech sector. The company provides robotics software that enables large companies to automate many mundane back-office tasks, freeing their employees to carry out more important activities. The firm debuted on AIM in March 2016 at 78p. In almost two years, its share price has shot up over 1,500% to £13 today. But with that stellar share price growth comes questions over valuations, and some fund managers have recently taken profits on their holdings in Blue Prism. One of those is James Baker, manager of Chelverton UK Growth. Baker told Morningstar recently that he exited his position in mid-2017 at around 800p – “much too early” despite having made eight times his money. His reasoning, though, was that Blue Prism’s “market capitalisation to sales ratio was becoming unsustainable fast”. Although some board members have been taking profits in recent months, management still own significant portions of the stock. Old Mutual owns a fifth of the company and Nickols’ fund has 2.58% of its assets invested. hTtp://
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