2019-08-01_Shares_Magazine

01 August 2019 | SHARES | 23

WHY HAS THE SHARE PRICE BEEN WEAK?

^ŚĂƌĞƐŝŶƵƉŵĂƌŬĞƚŵŝdžĞƌďƌĂŶĚ Fevertree

Drinks (FEVR:AIM) ŚĂǀĞďĞĞŶŽŶƐŽŵĞƚŚŝŶŐŽĨĂ

ƌŽůůĞƌĐŽĂƐƚĞƌ͘,ĂǀŝŶŐƐƚĂƌƚĞĚƚŚĞLJĞĂƌĂƚƌŽƵŐŚůLJ

άϮϮ͕ƚŚĞLJƌĂĐĞĚƵƉƚŽάϯϮďLJƚŚĞĞŶĚŽĨDĂLJ

ŽŶůLJƚŽŐŝǀĞďĂĐŬĂůůƚŚĞŝƌŐĂŝŶƐŝŶƚŚĞƉĂƐƚƚǁŽ

ŵŽŶƚŚƐ͘

/ŶǀĞƐƚŽƌƐŚĂǀĞŐŽŶĞƚŚƌŽƵŐŚĂǁŚŽůĞƌĂŶŐĞ

ŽĨĞŵŽƟŽŶƐ͕ĨƌŽŵŽƉƟŵŝƐŵĂŶĚĞƵƉŚŽƌŝĂƚŽ

ĚŝƐĂƉƉŽŝŶƚŵĞŶƚĂŶĚĚĞƐƉŽŶĚĞŶĐLJ͘

tŚĞŶƚŚĞůŽŶŐͲĂǁĂŝƚĞĚĮƌƐƚͲŚĂůĨƌĞƐƵůƚƐǁĞƌĞ

ƌĞůĞĂƐĞĚůĂƐƚǁĞĞŬ͕ƌĞǀĞĂůŝŶŐƚŚĂƚƐĂůĞƐŐƌŽǁƚŚ

ŚĂĚƐůŽǁĞĚƚŽϭϯйĂŶĚĞĂƌŶŝŶŐƐŐƌŽǁƚŚŚĂĚ

ƐůŽǁĞĚƚŽũƵƐƚϳй͕ŵĂŶLJŚŽůĚĞƌƐĐĂƉŝƚƵůĂƚĞĚĂŶĚ

ƐŽůĚŽƵƚ͘

The shares lost almost 10% on the day of the

ĂŶŶŽƵŶĐĞŵĞŶƚ͕ƚŚĞƐĞĐŽŶĚƟŵĞƚŚŝƐLJĞĂƌƚŚĂƚ

ƚŚĞLJŚĂǀĞďĞĞŶŚĞĂǀŝůLJƉƵŶŝƐŚĞĚĨŽƌŶŽƚŵĞĞƟŶŐ

ĞdžƉĞĐƚĂƟŽŶƐ͘

/ŶĐŽŵŵŽŶǁŝƚŚŽƚŚĞƌĚƌŝŶŬƐĐŽŵƉĂŶŝĞƐ

&ĞǀĞƌƚƌĞĞŚĂĚĂďůŽǁͲŽƵƚƐƚĂƌƚƚŽƚŚĞƐƵŵŵĞƌ

ůĂƐƚLJĞĂƌƚŚĂŶŬƐƚŽĂĐŽŵďŝŶĂƟŽŶŽĨŚŽƚǁĞĂƚŚĞƌ

ĂŶĚďŝŐƐƉŽƌƟŶŐĞǀĞŶƚƐǁŚŝĐŚƐƚĞĚh<ƐĂůĞƐ͘

dŚŝƐLJĞĂƌƚŚĞƐƵŵŵĞƌŚĂƐŐŽƚŽīƚŽĂƐŽŐŐLJ

ƐƚĂƌƚ͕ĂŶĚǁŝƚŚŶŽŵĂũŽƌĞǀĞŶƚƐƚŽĐĞůĞďƌĂƚĞ͘

^ĂůĞƐŚĂǀĞďĞĞŶƐƚĞĂĚLJďƵƚŐƌŽǁƚŚŝƐǁĞůůďĞůŽǁ

ůĂƐƚLJĞĂƌ͛ƐůĞǀĞůƐ͘

/ƌŽŶŝĐĂůůLJƚŚĞĮƌƐƚͲŚĂůĨƌĞƐƵůƚƐĐĂŵĞŽƵƚĂƐ

ŵƵĐŚŽĨƚŚĞh<ǁĂƐĞdžƉĞƌŝĞŶĐŝŶŐŝƚƐŚŽƩĞƐƚ:ƵůLJ

ĞǀĞƌƐŽŝƚŝƐƋƵŝƚĞƉŽƐƐŝďůĞƚŚĂƚƚŚĞƚŚŝƌĚƋƵĂƌƚĞƌ

ǁŝůůƐĞĞĂƐƚƌŽŶŐƌĞďŽƵŶĚŝŶĐŽŶƐƵŵƉƟŽŶďƵƚǁĞ

ǁŽŶ͛ƚŬŶŽǁĨŽƌƐŽŵĞƟŵĞ͘

dŚĞh<ƐƟůůƌĞƉƌĞƐĞŶƚƐƌŽƵŐŚůLJŚĂůĨŽĨŐƌŽƵƉ

ƐĂůĞƐƐŽĂƐůŽǁĚŽǁŶƚŽρйŐƌŽǁƚŚŝŶƚŚĞĮƌƐƚͲŚĂůĨ

ŚĂƐĂĐƚĞĚĂƐĂŵĂũŽƌĚƌĂŐŽŶƚŚĞŶƵŵďĞƌƐ͘

WHAT COULD SPARK A RE-RATING?

dŚĞŵĂũŽƌŐƌŽǁƚŚĚƌŝǀĞƌĨŽƌ&ĞǀĞƌƚƌĞĞŐŽŝŶŐ

ĨŽƌǁĂƌĚŝƐƚŚĞh^ŵĂƌŬĞƚ͕ǁŚĞƌĞŝƚŚĂĚƐŚŽǁŶ

ƌĞĂƐŽŶĂďůĞŐƌŽǁƚŚĨŽƌϭϬLJĞĂƌƐǀŝĂŝƚƐĂŐĞŶƚďƵƚ

ĚĞĐŝĚĞĚϭΘŵŽŶƚŚƐĂŐŽƚŽƚĂŬĞĂŵƵĐŚŵŽƌĞ

ŚĂŶĚƐͲŽŶĂƉƉƌŽĂĐŚĂŶĚŵĂŶĂŐĞŝƚĚŝƌĞĐƚůLJ͘

The step-change occurred last summer

ǁŚĞŶƚŚĞŐƌŽƵƉƐŝŐŶĞĚĂŶĞdžĐůƵƐŝǀĞŽŶͲƚƌĂĚĞ

ĚŝƐƚƌŝďƵƟŽŶĚĞĂůǁŝƚŚ^'t^͕ƚŚĞůĂƌŐĞƐƚEŽƌƚŚ

ŵĞƌŝĐĂŶǁŝŶĞĂŶĚƐƉŝƌŝƚƐĚŝƐƚƌŝďƵƚŽƌ͘

'ŝǀĞŶƚŚĞƐŝnjĞŽĨƚŚĞh^ŵĂƌŬĞƚ;ĞƐƟŵĂƚĞĚƚŽ

ďĞϭςƟŵĞƐƚŚĞƐŝnjĞŽĨƚŚĞh<ŵŝdžĞƌŵĂƌŬĞƚͿĂŶĚ

ƚŚĞŝŶĐƌĞĂƐŝŶŐƚƌĞŶĚƚŽǁĂƌĚƐƉƌĞŵŝƵŵĚƌŝŶŬƐ

ĂŶĚŵŝdžĞƌƐ͕ĞǀĞŶĂƐŵĂůůŝŶĐƌĞĂƐĞŝŶŝƚƐĐƵƌƌĞŶƚ

ϭϭйŵĂƌŬĞƚƐŚĂƌĞǁŽƵůĚŵĞĂŶĂƐŝŐŶŝĮĐĂŶƚ

ŝŶĐƌĞĂƐĞŝŶƐĂůĞƐĂŶĚĞĂƌŶŝŶŐƐŽǀĞƌƟŵĞ͘

ĐĐŽƌĚŝŶŐƚŽ^ΘW'ůŽďĂů/ŶƚĞůůŝŐĞŶĐĞ͕ƉƌĞͲƚĂdž

ƉƌŽĮƚŝƐĨŽƌĞĐĂƐƚƚŽƌŝƐĞĨƌŽŵƌŽƵŐŚůLJάϳρŵ

last year to £106m in three years, bringing the

ƉƌŝĐĞͲƚŽͲĞĂƌŶŝŶŐƐ;WͿƌĂƟŽĚŽǁŶĨƌŽŵκϭͲƟŵĞƐ

ƚŽϮΘͲƟŵĞƐ͘

zĞƐ͕ƚŚĞƐŚĂƌĞƐĐŽŵŵĂŶĚĂƉƌĞŵŝƵŵƌĂƟŶŐ

ďƵƚǁĞďĞůŝĞǀĞƚŚĞĐŽŵƉĂŶLJĐŽŶƟŶƵĞƐƚŽŚĂǀĞ

ĂǀĞƌLJƐƚƌŽŶŐŽƵƚůŽŽŬǁŝƚŚƐĐŽƉĞƚŽĚĞůŝǀĞƌůĂƌŐĞ

ĞĂƌŶŝŶŐƐŐƌŽǁƚŚĨŽƌLJĞĂƌƐƚŽĐŽŵĞ͘

ƵƌƌĞŶƚƐŚĂƌĞƉƌŝĐĞǁĞĂŬŶĞƐƐŵĂLJĞǀĞŶ

ƐƉƵƌƚĂŬĞŽǀĞƌŝŶƚĞƌĞƐƚĨƌŽŵƚƌĂĚĞƉůĂLJĞƌƐ

such as Diageo (DGE) and Unilever (ULVR) , o r

ƉƌŝǀĂƚĞĞƋƵŝƚLJ͘

FEVERTREE

DRINKS

(FEVR:AIM) £20.79

BUY

2016 2017 2018 2019

1000

2000

3000

4000

FEVERTREE DRINKS