SMALL CAP MOVERS: Fevertree loses its fizz over American roll-out; Musical instrument seller Gear4music hits the right notes
Fevertree lost its fizz this week after the after the premium tonic producer had to revise down full-year guidance following a costly roll-out in the US.
Earnings for the year to 31 December will now come in 5 per cent lower than 2018, while sales did not meet expectations, rising 9.7 per cent to £260.5million as opposed to a 12-13 per cent growth.
Investors are wondering whether it is doomed to follow the likes of Tesco, Marks & Spencer and, more recently, online estate agent Purplebricks that have all failed spectacularly Stateside.
Fevertree lost its fizz this week after the after they had to revise down full-year guidance following a costly roll-out in the US
‘Fevertree has an excellent business model with a very strong brand,’ said Nicholas Hyett, analyst at Hargreaves Lansdown.
‘The question is whether its premium mixers can continue to justify a premium rating.’
It seemed the punishment meted out was disproportionate as Fevertree’s stock lost almost a quarter of its value in the bloody aftermath of the alert.
That said, the drink-maker’s shares were priced for stellar success, leaving little margin for error.
Tiny rival Skinny Tonic revealed there was a still some thirst for mixers after closing a crowdfunding campaign 15 days early and oversubscribed. It raised £1.5million when it was only looking for £500,000.
The private company, which is set to launch the UK’s first zero-calorie, zero sugar and 100 per cent natural mixer, is considering a stock market listing but has not yet set a date.
Spirits group Distil, meanwhile, rose 14 per cent to 0.8p after posting higher sales driven by its spiced Caribbean drink.
Shares in Joules surged 21 per cent to 204p after management reassured investors that a Christmas stocking mishap was just a one-off and the root cause is being addressed
Turning to the wider market, the AIM All-Share dipped 0.7 per cent to 967, while the FTSE 100 was down 0.8 per cent to 7,611.
Shares in the posh wellie maker Joules surged 21 per cent to 204p after management reassured investors that a Christmas stocking mishap was just a one-off and the root cause is being addressed.
Fellow fashion retailer ASOS rose 4 per cent to 3,309p after a ‘better than expected’ sales performance, although full-year guidance remained unchanged.
Musical instruments seller Gear4music also hit the right notes, jumping 13 per cent to 273p on the back of a ‘successful’ festive period.
Professional services firm Norman Broadbent went up 9 per cent to 8.5p after proving it returned to profit in 2019 with a better second half.
A £38million funding deal that saw German engineer Robert Bosch increase its stake in fuel cell maker Ceres Power boosted the shares 16 per cent to 392p.
Miner Goldplat more than doubled in value to 5.8p after the benefits of the higher gold price boosted full-year expectations.
Fellow gold digger Ariana Resources rose 8 per cent to 2.8p following ‘exceptional’ results from a resources sampling programme at the Tavsan project in Turkey.
Turning to the fallers, podcast producer Audioboom tumbled 13 per cent to 210p amid disappointment over a 91 per cent riser in full year revenues, which fell short of the 171 per cent jump recorded in the first half.
Europa Oil & Gas tanked 27 per cent to 2.1p after an unnamed oil major walked away from farm-out talks in a development offshore Ireland.
Engineer Van Elle shed 7 per cent to 50p after interim profits crashed 63 per cent due to uncertainty in the UK, although it is expecting a ‘modest’ improvement in the second half.
Publisher Dods was also hit, falling 10 per cent to 4.2p after it flagged slow trading in the quarter to March, the last in its financial year.
Similarly, Coral Products plunged 14 per cent to 7p after the plastic maker warned on profits due to softer demand.
Finally, geosciences firm Getech Group dropped 18 per cent to 20p over failed contract negotiations, and now expects full-year revenue to be cut by a third.