MARKET REPORT: Fever-Tree loses its fizz with growth slowing to 5% and shares falling 9.6%

Having listed at 134p in 2014, Fever Tree shares peaked at 3956p last year. But the AIM stock has been in decline and fell another 9.6 per cent, or 221p, to 2079p

There’s a lot of pressure that comes with being a stock market darling.

Since Fever-Tree launched in 2005 it has taken the drinks market by storm amid booming demand for premium tonic and other mixers. Having listed at 134p in 2014, the shares peaked at 3956p last year.

But the AIM stock has been in decline and fell another 9.6 per cent, or 221p, to 2079p, after half-year figures that disappointed investors despite a 7 per cent rise in profit to £35million. 

Having listed at 134p in 2014, Fever Tree shares peaked at 3956p last year. But the AIM stock has been in decline and fell another 9.6 per cent, or 221p, to 2079p

Total revenues rose 13 per cent to £117million between January and June – well below the 45 per cent growth rate in the same period last year.

In the UK, sales growth slowed from 73 per cent in the first half last year to just 5 per cent. Bosses admitted that a wet spring dampened UK sales.

In Britain, Fever-Tree growth is due to plateau because it already has links with many pubs and bars, leaving it with few pockets of the market to conquer.

Analysts will also be keeping a close eye on its profit margins, which fell 1.3 percentage points as it ramped up overseas investments and counted the costs of the UK sugar tax.

Shares in Cardiff-based IQE rocketed 25.6 per cent, or 13.2p, to 64.8p, after it struck an optimistic note about the fallout from the US-China trade spat. 

Stock Watch – Get Busy 

Losses narrowed at Get Busy on the back of roaring revenues in the six months to June. 

The firm, which makes software that helps small businesses manage computer documents and communications, lost £571,000, down from £666,000 in the same period last year.

This was helped by an 18 per cent jump in revenues, to £6.2million, and a 12 per cent rise in customers at the firm, which was spun out of Australia’s Reckon in 2017.

Stock jumped 34.5 per cent, or 10p, to 39p.

Supply chains are being reworked and IQE has the all-clear to supply a customer in Asia without getting caught up in Chinese trade restrictions.

Meanwhile, profits slumped at trading firm IG Group after a crackdown on risky bets.

IG made a £194.3million profit in the year to May, down 31 per cent on a year earlier, after regulators in Britain and Europe took action against so-called contracts for difference. 

These allow customers to bet on sharp moves in the market, but while it can lead to huge gains if they guess right, it exposes them to massive losses if they do not.

New limits on how much can be won or lost by punters have taken their toll on IG. But it seems traders were prepared, as shares were flat at 580p.

Profits were almost wiped out at convenience store chain McColl’s, falling to £200,000 in the six months to May 26 compared with £2.3million in the same period of last year. 

Sales grew 0.1 per cent, mostly due to store closures, while it said the collapse of supplier Palmer & Harvey last year is still hitting margins. Shares fell 5.4 per cent, or 3.8p, to 66.2p.

Profits dived 38 per cent to £37million at soap maker PZ Cussons in the year to the end of May, as it wrote off £24.8million against brands in Nigeria and Australia. Revenues fell 6.8 per cent to £689.4million. 

It closed down 1.1 per cent, or 2.5p, at 224.5p.

Whitbread shares suffered after Bernstein Research and Merrill Lynch downgraded its stock and gave it a 4200p target price. 

It ended down 3 per cent, or 142p, at 4543p. The FTSE 100 index had a cheerier day as it hit its highest level in more than two weeks, rising 0.6 per cent, or 41.93 points, to 7556.86, while the FTSE 250 lifted 0.5 per cent, or 104.33 points, to 19,752.34.

City buyout firm Melrose Industries was the top riser after better-than-expected results at French car parts maker Faurecia.

Shares in Melrose, which bought automotive engineer GKN in an £8billion takeover last year, climbed 5.1 per cent, or 9.3p, to 192.9p.

Southend Airport-owner Stobart Group rose 1 per cent, or 1.2p, to 117.6p, after an attempt by former chief executive Andrew Tinkler to unseat new boss Warwick Brady and another director, fell flat at the annual general meeting.

Profits at marine insurer Beazley almost tripled to £134million as the revenue from insurance policies rose 12 per cent. 

Boss Andrew Horton says marine insurance prices will rise after the capture of British-flagged ship, the Stena Impero, by Iranian forces last Friday. Shares rose 5.2 per cent, or 28p, to 564.5p.

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