Premium drinks company Fevertree has been hit by global supply-chain bottlenecks and shipping costs in the first half of the year, squeezing its earnings even as business in Europe and the US has rebounded from the depths of the pandemic.
Earnings at the company, best known for making top-shelf tonic waters and cocktail mixers, were held back by higher costs for goods storage in the US and transatlantic freight, Fevertree said in its half-year earnings statement on Wednesday.
“We expect disruption and elevated logistics costs to continue to impact through the remainder of this financial year and into 2022,” the company said.
Shares in the group rose 3 per cent in early London trading on Wednesday, trimming their decline this year to 13 per cent.
Fevertree’s gross margins fell 2.7 percentage points in the six months to June 30 while adjusted earnings before interest, tax, depreciation and amortisation increased 23 per cent to £29.2m from a year earlier.
Businesses worldwide have struggled with record shipping costs and supply-chain disruption as leading economies reopened from pandemic lockdowns.
The group reiterated its guidance from July, forecasting full-year sales of £295m to £304m, and recommends an interim dividend of 5.52p a share, up 2 per cent from a year ago.
Sales rose in all its key markets, pushing the total up 36 per cent to £141.8m, led by a recovering Europe where revenues doubled.
Off-trade sales, helped by lockdowns and people drinking at home rather than in bars, exceeded its expectations and remained above pre-pandemic levels. On-trade sales, which refer to business with hotels, bars and restaurants rather than supermarkets, performed well as outlets began to reopen and recover over the second quarter.
“While some material impacts of the pandemic remain, the business is increasingly well placed to deliver our plans for long-term growth,” chief executive Tim Warrillow said.