Fever-Tree issues costs warning linked to war in Ukraine
Drinks mixer firm Fever-Tree has warned Russia’s invasion of Ukraine has caused “significant uncertainty” for short term costs.
Tim Warrillow, its co-founder and and CEO said the war had “resulted in significant uncertainty in relation to our input costs in the short term” with commodity costs up sharply in recent weeks.
The company now expects underlying earnings of between £63 million and £66 million this year as the cost pressures add to already steep rises in inflation.
Fever-Tree had already warned in January that inflation would impact its earnings this year, before Russia’s invasion of Ukraine.
With hospitality returning to normal after the lifting of Covid restrictions, the company forecast revenues of up to £365 million and growth of between 14% to 17%.
The earnings warning came as it reported pre-tax profits of £55.6 million in 2021, up from £51.6 million in 2020 as revenues jumped 23% to £311.1 million.
Tim Warrillow said: Whilst he tragic situation in Ukraine has resulted in significant uncertainty in relation to our input costs in the short term, 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.
The company added: “Commodity prices have increased dramatically in recent weeks because of the terrible events unfolding in Ukraine, and this has created significant uncertainty in relation to input costs.”
The 2021 results showed that revenues rose 15% in the UK, jumped a third higher in the US and were up 35% in the European business.
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.”up 35% in the European business.
