Soft drink giant Fever Tree highlights short term cost ‘uncertainty’ amid war in Ukraine
Beverage maker Fever Tree has said Russia’s invasion of Ukraine has caused “significant uncertainty” for short term costs.
Tim Warrillow, co-founder and CEO of Fever-Tree, said the war in Ukraine had “resulted in significant uncertainty in relation to our input costs in the short term.”
UK revenue leaped 15 per cent in full year results to 31 December, the company revealed on Wednesday Revenue rose from £103.3m in the 2020 financial year to £118.3m.
Shares dipped more than two per cent in early trading on Wednesday morning.
Fever Tree said it now expects to deliver EBITDA range of between £63m and £66m for the 2022 financial year, reduced from a range of £69m to £72m.
The firm’s CEO added that “the long-term global opportunity for Fever-Tree remains substantial and we are as confident as ever in the brand’s ability to capitalise on this.”
“We are excited by the growing interest in the long-mixed drink category from retailers, spirits brands and consumers, especially given the increasing focus on premium segments, which places Fever-Tree, as the largest global premium mixer brand, at the centre of these trends.”
Patrick Higgins, equity analyst at Goodbody, said the update had “provided some encouragement for the sector” with recovering sales.
Nevertheless, the company was “facing significant inflationary pressures,” he added. “Global supply chain disruptions have also been further compounded by the spike in commodity prices due to the Russian invasion of Ukraine.”
Higgins said: “Overall, although Fever-Tree will likely continue to deliver robust growth over the medium term given the structural growth opportunity in the premium long-mixed drinks category, [the] results demonstrate how the group is clearly facing significant near-term challenges on margins due to the backdrop of rising inflation.”
What’s more, the group could be hit by “the falling disposable incomes and confidence of consumers, particularly as a premium brand.”