Fever Tree profit margins impacted by maritime and inflationary pressures

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Tuesday, September 13, 2022 8:17 a.m.

Fever Tree said price increases for its soft drinks only partially helped offset cost pressures caused by increased shipping costs.

The tonic water seller said its gross margins were hit by “inflationary cost pressures and continued exposure to high transatlantic freight costs,” in interim results released Tuesday.

A gross margin of 37.4% was lower than the gross margin of 44.1% reported in the first half of 2021.

It posted an adjusted EBITDA of £22m, compared to £29.2m in the first half of 2021. This is a decline of 24.7%.

However, sales reached £160.9m, a 14 per cent increase, after pubs and bars showed ‘promising signs of recovery and demand remains strong’ after Covid restrictions lifted been relaxed in different markets.

The beverage maker also warned that glass availability would be limited at its suppliers in the second half of the year.

This will limit its “opportunity to generate upside revenue despite the strong demand we are seeing in our markets,” the company said.

More soon…

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