By Laura McGuire
Up market tonic maker Fever-Tree has revealed plans to hike its prices, as it continues to navigate a surge in production costs and a drop off in demand due to inflation.
The company said made a loss in earnings for the year with revenues down 0.2 per cent to £116.2m from £118.3m the prior year.
The London-listed adult drinks company said it felt the financial strain of soaring costs in glass production and trans-Atlantic freight costs – which were fuelled by hikes in inflation and challenging political outlook.
Nonetheless, the group said it remained confident about the outlook for the year, as it delivered total revenues of £344.3m, representing an increase of 11 per cent year-on-year.
“We have seen an encouraging start to 2023 in our key growth markets and are confident of maintaining the group’s momentum in the months ahead,” Tim Warrillow, co-founder and chief executive of Fever-Tree, said.
As a result, Fever-Tree said it expects to deliver EBITDA in line with previous guidance of between £36m – £42m.
Despite Fever-Tree noting “significant inflationary headwinds,” for the year ahead and and plans to introduce cost saving initiatives investor confidence in the group remains strong with its share price reaching 5.98 per cent this morning.
“The current economic environment has presented a mixed picture for Fever-Tree drinks going forward as high energy prices are causing glass production costs to spike, which the majority of the company’s products use, Dan Smith, head of the UK food and beverage sector at Gowling WLG, said.
He added: “The business is committed to innovation, having recently added an adult soft drinks range as well as mixers to add to spirits to create cocktails.
“Shareholders will be pleased with the growth experienced in the US and hoping this can offset the drinks producer’s narrowing margins as a result of rising inflation.”
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