Fevertree drinks, Hammerson and Britvic

“Miners, transport companies and banks do their best at lifting the FTSE 100 on Tuesday, with the index rising 0.1% to 7,663,” says Russ Mould, Investment Director at AJ Bell.

Fevertree drinks

“Fevertree is a true British success story, showing how it is possible to take a seemingly commoditised product, introduce a higher quality version and shake up a market where the previous leader Schweppes had its eye off the ball and didn’t have sufficient barriers to block new competition.

“It has clearly built up a powerful brand, saying there is now evidence of consumers being attracted to the world of premium mixers for the first time.

“And the management of Fevertree have perfected the art of under-promising and over-delivering, given it once again says earnings will beat expectations.

“It is very refreshing to see management not get carried away by their success and declare they are going to smash sales records around the world, such as you might expect from someone in its strong situation.

“Ever since it joined the stock market in 2014, Fevertree has managed to restrain from over-hyping its sales outlook and just focus on the facts in hand. This is the sign of a great company – focus on executing the business strategy and the rest (i.e. the share price) will take care of itself.

“Shareholders will certainly be pleased. Fevertree’s stock has appreciated by more than 2,680% in value in a little less than four years.”

Hammerson

“There is a growing trend for companies to shrink in order to become leaner, fitter businesses. Hammerson certainly falls in this category with a plan to sell £1.1bn of assets by the end of 2019.

“The optimisation strategy will see it try to reduce exposure to the department store sector by 25% and high street fashion outlets by 20%. Some may see that as alarming given it is meant to be a retail property expert.

“It provides a clear illustration of how Hammerson views the retail sector, namely that you’ve got to focus on parts of the industry which have the best long term future. For Hammerson, that is its flagship retail destinations and premium outlets.”

Britvic

“This year’s hot summer weather should have created one of the best ever sales drivers for Britvic. Sadly it hasn’t been able to make the most of the sun due to the industry-wide shortage of carbon dioxide.

“There are many different levers in action with Britvic at present and the end result is that trading should still hit market expectations, which is quite impressive given several negative factors at play.

“On one hand, it has had to contend with the sugar tax with a shift to low or no sugar products. In normal market conditions, this year would have been a period of monitoring how some product recipe changes have gone down with the public.

“However, the warm sun making the public very thirsty has distorted the situation which meant Britvic still hasn’t been able to get a handle on how the sugar tax has changed consumer buying habits. Add in the CO2 shortage and you’ve got a whirlwind of push and pull levers.

“The task for Britvic is to therefore try and milk the sunshine while it lasts, particular as the carbon dioxide issue now seems to be going away. The assessment of the sugar tax will have to be done at a later date.”

These articles are for information purposes only and are not a personal recommendation or advice.