thursday, 25 may of 2017

Fever-Tree co-founder makes £73m from selling shares

One of the founders of premium mixer maker Fever-Tree has cashed in on the firm’s success to sell £73m of shares.

Co-founder Charles Rolls has sold a 3.9% stake in the company, taking advantage of the 924% increase in its share price since the flotation in November 2014. The shares were sold at £16.25 each to financial institutions.

Rolls sold 4.5m shares, nearly twice as much as he had originally intended, due to “significant institutional demand”, Fever-Tree said.

The company makes high-quality tonic water and other fizzy mixers, tapping into the rapidly growing market in premium spirits, in particular the renaissance of gin.

Fever-Tree’s share price has soared as the company has consistently beaten market expectations. It announced earlier this month that its 2017 results would be “comfortably” ahead of City forecasts. Last year, pretax profits more than doubled to £34.3m, on sales of £102m.

Fever-Tree was founded in 2005 by Rolls, a former management consultant who had revived the Plymouth Gin brand, and Tim Warrillow, a former ad man, in an attempt to challenge Schweppes’s dominance of the mixers market. Rolls had noticed that the world’s finest gins were all mixed with the same mass-produced tonic.

The pair travelled around the world to source ingredients for their tonic water – bitter orange from Tanzania, lemons from Sicily. Their quinine, the key ingredient in tonic (gained from the bark of the cinchona tree), comes from the eastern Congo, and is reputed to be the world’s best.

Fever-Tree tonic, which comes in glass bottles, first appeared on shelves in 2005 and has played its part in the Spanish “gin-tonic” craze.

The sale leaves Rolls with an 11.2% stake in the company, worth more than £200m at Thursday’s price of £16.68, down 4.5%. The shares floated at £1.34 in 2014. He has agreed not to sell any more shares in the next six months without written consent from Investec Bank.

Earlier this year Rolls ended his day-to-day involvement in the company, moving from his role as executive deputy chairman to a non-executive position.

(Published by The Guardian - May 25, 2017)

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