Fever-Tree profits lose fizz over surging costs and staff shortages
Shares in the tonic manufacturer plunged by as much as 30% to its lowest in around six years on Friday morning.
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Your support makes all the difference.Mixer maker Fever-Tree has slashed its profit forecast for the year as it was hit hard by soaring costs and labour shortages.
Shares in the tonic manufacturer plunged by as much as 30% to its lowest in around six years on Friday morning.
Tim Warrillow, chief executive officer of Fever-Tree, said: “Whilst we are seeing positive top line performance and expect to deliver good revenue growth for the full year, the challenging logistical and cost headwinds we highlighted previously have significantly worsened in recent months and we now expect them to notably impact our full-year margins.”
Fever-Tree told shareholders that port congestion and a dearth of staff in the US had also weighed on production.
It also highlighted that industry-wide issues regarding the supply of glass and wider cost rises meant its profits would be below previous targets.
The drinks firm expects full-year operating profits of between £37.5 million and £45 million, having previously predicted it would between £63 million and £66 million.
It came as the group revealed that total sales rose by 14% to £160.9 million over the six months to the end of June.
Mr Warrillow added: “The business is working on a large number of initiatives, and more closely than ever with suppliers throughout our supply chain, to mitigate the transitory headwinds and at the same time ensure we can satisfy the strong demand we are seeing in our growth regions.
“Despite the current challenges of the volatile logistical and cost environment, we continue to make good progress across our regions.
“The strong and growing consumer demand for the brand, our exciting pipeline of innovation, and the growing interest in long-mixed drinks, gives us more confidence than ever in the long-term opportunity.”