MARKET REPORT: Classy toner maker Fever-Tree is buoyant after July profit warning as City breathe a sigh of relief
fever tree stocks regained some of their shine as its latest results left nervous investors breathing a sigh of relief.
After an earnings warning in July, the toner maker said it continued to face a “challenging” global environment.
Shortage of staff at one of his bottlers in the United States forced his UK business to increase production to fill the gap.
Cheers: Toner and blender maker Fever-Tree, which is valued at £1.1billion, has seen its shares fall 62% this year. But they were up 4.2% year-on-year as they saw a 14% increase in revenue
This increased transportation costs as goods are shipped across the Atlantic to the United States.
The company also warned that glass would be in short supply in the second half of the year, although it is working to reduce the impact in 2023.
The company, which is valued at around £1.1bn, has seen its shares fall 62% this year.
But they rose 4.2%, or 39.5p, to 988.5p yesterday, as he reported a 14% rise in revenue to £160.9m for the six months to the end of June .
With rising costs, profits fell 30% to £17.6million. Despite this, Fever-Tree stuck to its full-year guidance to give shareholders a boost.
He expects revenue of £355-365m and profits of £37.5-45m. Liberum said the company’s move into international markets “continues to be a source of optimism for the stock.”
Stock markets around the world tumbled as investors bet another aggressive round of interest rate hikes would come to fight runaway inflation.
Stock Watch – West Tungsten
Tungsten West is continuing with plans to develop the Hemerdon mine near Plymouth which it purchased in 2019.
The Devon-based mining company has completed a royalty sale worth around £26 million with a global mining royalty investment fund.
Tungsten plans to use the money – along with an additional £5-10million he hopes to secure – to fund the project which he expects to complete before the third quarter of next year.
The shares rose 18.8%, or 4.5p, to 28.5p.
Official figures in the United States showed inflation rose from 8.5% in July to 8.3% in August, but the figure was higher than expected and sent shockwaves through financial markets.
After spending much of the day in positive territory, the FTSE 100 fell 1.2%, or 87.17 points, to 7385.86 and the FTSE 250 slipped 1.8%, or 346.66 points, at 19167.21.
Wall Street was also down sharply. US inflation figures overshadowed better news in the UK where unemployment fell to 3.6%, the lowest since 1974.
In London, BT shares fell despite Deutsche Bank’s view that the telecoms giant could benefit from scrapped tax hikes, price hikes due to rising inflation and a stronger pound.
The broker raised the stock’s rating from ‘hold’ to ‘sell’, but BT shares fell 1.2%, or 1.75p, to 142.75p.
Among mid-caps, fund manager JTC benefited from an increase in revenue and earnings as it hailed “huge opportunities for the group going forward”.
The company said it was “confident” to generate revenue and earnings above market expectations. In its half-year results, revenue soared 38.8% to £93m while profit jumped 27.3% to £25.3m.
Analysts expect revenue for the year to reach £183m and profits to reach £62.6m.
With results in line with their expectations, Shore Capital reiterated its “buy” rating as shares of JTC climbed 9.75%, or 75p, to 844p.
Shares of Petra Diamonds shone after the mining company more than doubled its profits to post record annual results.
Petra recorded a 103% increase in profit to £229m ($265m) for the year to the end of June.
This analyst smashed estimates of £206 million ($239 million) and the company’s previous record of £168 million ($195 million) in 2018.
After improving her cash flow by 91%, Petra said she wanted to reduce her debt and announced a £130 million ($150 million) takeover bid which she said would save up to to £13 million ($15 million) a year in interest charges. The shares rose 4.8%, or 5p, to 110p.
There were also reasons to encourage Oxford Nanopore investors after the group’s half-year results.
The gene sequencing company, which supplied Covid test kits, said its revenue soared 107% to £122.3million in the six months to the end of June. The shares rose 4.2%, or 11.5p, to 283.5p.
