Fevertree Drinks PLC expects gradual on-trade sales growth but invests in
The on-trade channel, consisting in restaurants and pubs, has been hit by closures
PLC () said it expects on-trade sales to gradually resume depending on how lockdowns are lifted in different countries.
The soft drinks producer, which had £128mln in the bank at the end of December, is continuing to invest in its growth, especially in marketing.
READ: Fevertree to pay dividend despite on-trade sales slump as coronavirus pandemic bites
The off-trade channel, consisting of supermarkets and shops, rose 24% in the UK in the first month of lockdown and nearly doubled in the US during April and May.
However, both were hit by a slump in the on-trade channel, such as pubs and restaurants, which accounts for 50% of UK revenue and 70% of US revenue.
The AIM-listed firm has been looking to expand internationally, especially in the US, where analysts previously said there is a gap in the market.
“There’s certainly a substitution effect in play here, but Fevertree’s strong balance sheet and strengthening brand should allow it to pick up broadly where it left off once all this is over,” said William Ryder, analyst at Hargreaves Lansdown.
“However, as we’ve said before – cracking America is the key to future growth, and that will be no easy feat.”
Shares rose 2% to 2,125p on Thursday morning.
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