Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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Google - "Fevertree tackles cost pressures and reduces exposre to logistics risks" for the IC take on results.
ShearClass, the SETS system works in tandem with MM's. Those with direct access to SETS can and do enter orders on the buy and sell side at a price that they are willing to execute, the best price at the top of each side of the book. There is a priority based on time of placing and when matched these are executed using these simple priorities. These are presented in feeds as A trades.
Illiquid companies have input from Market Makers and where an investor or their broker does not have direct access, the SEAQ system is used for bargains to be made. Off book deals are denoted as O and are made directly between a market maker and an investor. You will note that both A and O trades are reported for this equity. I hope this helps.
Comparisons are good on revenue and bad on profits. However, it remains a premium brand, still growing sales and with new products coming to market which are all positive factors. Growth story is quite compelling if you believe it can eventually get better control over its costs. I'm not in a rush to sell but wouldn't add either. My guess is that this will eventually get back to profits growth or failing that will be taken over because its a brand that, with a big market player behind it, could be huge.
@Alas_Smith, the market makers do not drive the price on a SETS order book. It's driven by market participants placing orders on the buy / sell side...
The market appears happy, and SP rising.
All good by me.
Pleased with the figures.
Acker
Recent RNS on trading have highlighted all of the margin and cost challenges. As you can see already it seems to have all been priced in.
It really does not matter what you or I or any private investor thinks of the figures or the comparisons. Market makers are there to make a market in the shares and will price them to best advantage.
Probably the most important thing to note is that the amateur and professional have updated and the same information at the same time.
Horrible YOY comparisons. How much is this was already expected?
Keep going --impressed.
Acker
Nice recovery--as expected.
Acker
Bad,
Thank you for reply. Good comments. I am a holder here and was considering adding. However, more negative following today’s RNS.I will hold (for long term) but only add should the sp drop substantially (£8 or less).
Certainly going to need revenue growth to offset the higher costs.
Considering no stamp duty, FEVR is rather speculative assert. The value here is not in P/E but in liquidity and volatility.
Bad,
Thank you for reply. Good comments. I am a holder here and was considering adding.
Billyboy - I don't think it will fall that much. I think the P/E at 28 was much lower than historically has been the case and already reflected reduced expectations. The top line growth should, at some point result in bottom line growth but there is no current visibility for that. Fevertree remains a premium brand that is still growing at a good rate. I think it will struggle to go higher until there is clear evidence of margin improvement but a fall to £6.18 for such a highly regarded brand seems unlikely to me.
Hi,
Even allowing for today’s drop in sp, I have calculated that P/E Ratio based upon projected Net Profit for 31/12/22 is about 46 and for 31/12/23 is about 45.
So revenue is projected to grow but the significant cost increased will lower EBITDA and Net Profit resulting in a much higher P/E ratio than today’s 28.
To reflect todays P/E of 28, the so would need to fall to approx £6.18 from today’s £10.20.
On that basis, has the so got further to fall before representing good value?
Thoughts?
I found the update disappointing. Yes, significant top line growth achieved and anticipated again for this year but profitability seems to be declining at a time when headwinds should have been starting to ease. I think increasing sales and reducing profits is not a great combination. Growth needs to reach the bottom line and there is no indication in this statement that it is going to at any point in the forseeable future. There are vague hopes expressed for 2024 but that's it. Other companies seem to be making strenuous efforts to address cost issues but as Fevertree outsources everything I guess it is much tougher. I still think this will come good as it is a superb brand but I think that will be over the much longer term now. It's pre-tax profit was over £70m in 2019 and for the current year to December 2023 it is predicting less than half that. It's hard to see that as anything other than highly negative in the absence of a clear strategy for sorting out the low margins.
I assume the rail strikes will have impacted sales in pubs etc - doesn't seem too unreasonable.
no need to apologise JNJONES.. i was only asking as i read yr post. I bought in this am under a tenner...I also have made money in the past with fevr and i thought this price is value for money. Shares will go back up as they are oversold.
GL.
I bought more shares first thing this morning. I have made good money with Fevertree in the past and I am sure I will again.
Apologies sundezena - the repetition was a mistake (I have no idea how that happened!).
I also hold Diageo . They put out a positive half year report earlier today and their SP has followed a similar trajectory to Fevr.
I have added to Diageo but not to Fevr, mainly because of the negativity around future energy and glass costs. I would have expected some sort of assurance that these costs were now subject to a hedging strategy or that there was a high degree of certainty certainty for the remainder of they year?
GLA
I agree with Sundezena. Mr Market very often overreacts at first, whether up or down, but comes back into balance sonner or later.
JNJONES , the ALSO bit was added twice in your post...any difference from the first one?
i think the update was rather positive....the shares might end UP by day's end IMO. DYOR.
Whilst the numbers were fine, there were negative undertones in the text - something that will worried some investors.
For example - “the widespread industrial action undertaken across the UK rail network in the run up to Christmas had a notable impact on sales in what is traditionally a very strong trading period”. Personally, I find this a weak explanation - I haven't read anywhere else about other companies citing this as having a material impact on trading?
Also – “· However, the impact of elevated European energy costs into glass bottle pricing will be material in 2023. Whilst energy pricing has recently reduced, it remains volatile and at least three times higher than 2021 levels, impacting both the cost of raw materials and the direct energy cost in glass manufacture. As a glass-led business, with c.80% of our sales mix in glass bottles, we are particularly exposed to this significant headwind.”
I read this as getting in an early defence for what may be an downbeat update later this year?
I remain optimistic, primarily because of progress in North America. Hopefully, the BOD will engage someone more experienced to pen the words for the next business update!
GLA
Also – “· However, the impact of elevated European energy costs into glass bottle pricing will be material in 2023. Whilst energy pricing has recently reduced, it remains volatile and at least three times higher than 2021 levels, impacting both the cost of raw materials and the direct energy cost in glass manufacture.
· As a glass-led business, with c.80% of our sales mix in glass bottles, we are particularly exposed to this significant headwind.”
Agreed, hard to understand the magnitude of that early drop based on the positive RNS.
It will be positive by end of day..got some today at just under £10..been following it for a while now..GLA