Fevertree’s half-yearly profit fell 30% to £17. 6 million from £25. 3 million in the six months to June 30. Still, shares of the tonic maker rose 12% on Tuesday as the beverage maker maintained its full-year profit forecast and bullish control in ongoing trading.
The premium non-alcoholic producer’s first-half profit rose 14% to £160. 9 million, up from £141. 8 million in the same era in 2021, driven by higher demand in its European and US markets.
However, profits fell by almost a third and gross margins fell by 670 basic problems due to logistics prices and inflation. The shortage of glass at its East Coast branch of the U. S. increase. The company was forced to increase its prices, but this only partially mitigated the charge.
Fever-Tree increased the interim dividend by 2% to 5. 63p as a sign of confidence. The company expects annual revenue of £355 million to £365 million and EBITDA (earnings before interest, taxes, depreciation and amortization) of £37. 5 million to £365 million. £45 million. It remains funded with £100 million in the bank, following the payment of a special dividend of £50 million to shareholders.
“Fever-Tree delivered strong earnings functionality in the first part of 2022, with strong functionality in Europe as retail recovered,” Chief Executive Tim Warrillow told investors. “Demand is strong in the U. S. , allowing us to deliver a record August.
“In addition to driving earnings growth, the company remains too focused on mitigating the effects of charges across the industry and while we are still well aware of the excessive volatility affecting energy and logistics charges, we expect to see a slow reduction in our exposure over the middle ground. “
However, Warrillow claims that the “strength of the Fever-Tree brand” provides “exciting opportunities” to attract new consumers and expand into “important adjacent categories” and that the prospect of non-carbonated cocktail mixers in the U. S. will be “not very helpful. “Soft drinks in the US, the UK is “extremely convincing”.
Management claims to be the market leader in the UK, providing 33% of its profits and posting a 6% sales expansion over the period. -year, but underlying demand would be “significantly higher”, with sales held back by the logistics issue. Warrillow states that Fever-Tree’s 3-year CAGR in the US retail category. “
Analysts at broker Liberum said the prospect of the company’s expansion in the markets “remains a source of optimism for stocks. “Meanwhile, analysts at JP Morgan Chase have a stock value target of 1,100 pence.
Fever-Tree shares have fallen 54% over the past year, having lost most of their profits to the Covid lockdown. However, at 981. 5p, it may only be worth buying them in the long run, given the prospect of overseas sales growth. However, inflation Pressures are expected to continue in the near term.
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