Fever-Tree’s chief executive and co-founder, Tim Warrillow, has toasted the drinks company’s shares reaching a record high by cashing in nearly £29m of his stake.
Warrillow sold 1.5m shares on Tuesday at £19.25 each, shortly after the upmarket tonic water maker reported a 77% surge in half-year revenues and said full year results would be “materially ahead of expectations”. The news resulted in its shares soaring 23% to £21.56 before slipping back to £20.58, its best day since November. They were up 4% at £21.40 in early trading on Wednesday.
This latest sale leaves Warrillow with a 5.4% stake, and a spokesman said the move was made to satisfy demand from institutional investors.
He said: “There remains considerable demand from institutions both in UK and US for sizeable blocks of Fever-Tree shares and therefore Tim took the decision to provide some further liquidity in the register in response to this.”
The company is benefiting from the continuing popularity of gin and tonic, which helped boost sales in continental Europe by 64%. The UK remains its key market, with revenues up 113%.
Warrillow, a former advertising executive, raised £7.6m by selling shares when Fever-Tree floated at 134p a share in November 2014, valuing the company at just £154m. Less than three years later it is now worth £2.4bn.
So far Warrillow has raised around £42m since the flotation, having also sold £5.4m worth of shares in March 2016.
Co-founder Charles Rolls sold about a quarter of his shares in May, netting about £73m after selling a 3.9% stake in the company. In all he has cashed in to the tune of around £100m, since he sold a £12m tranche of shares last year and around £17m in the flotation.
Non-executive chairman Bill Ronald also sold shares on Tuesday, raising £1m and leaving him with 0.3%.
Neil Wilson, a senior market analyst at ETX Capital, said the shares were not cheap at the current price, and the company could see tougher times ahead in the UK: “Fever-Tree will have to continue to grow at this clip to justify the valuations [and] maintaining this level of growth in the UK will be tough as this market could deteriorate over the next couple of years if there is a hit to consumer spending from inflation and any Brexit-related slowdown.”
But he added that sales in Europe, the US and the rest of the world continued to improve.
Analysts at RBC raised their price target after the results from £19.50 to £24 with an outperform rating.
Warrillow and Rolls – a former management consultant who helped revive the Plymouth Gin brand – set up the business in 2005 to challenge the dominance of Schweppes. They travelled the world searching for the best ingredients, and named the company after the fever trees in the Congo which produce the quinine used in tonic water.
