The premium beverage company Fevertree was hit in the first half of the year by bottlenecks and shipping costs in the supply chain, which slashed its earnings even as business in Europe and the US returned from the depths of the pandemic.
The company’s earnings, especially known for producing top-shelf tonic water and cocktail blends, are being held back by higher U.S. freight and transatlantic freight costs, Fevertree said in its half-year earnings statement on Wednesday.
“We expect disruption and increased logistics costs to affect the rest of this financial year and into 2022,” the company said.
Shares in the group rose 3 percent on Wednesday in early trading in London, reducing their decline to 13 percent this year.
Fevertree’s gross margins fell by 2.7 percentage points in the six months to June 30, while adjusted earnings before interest, tax, depreciation and amortization increased by 23% to £ 29.2 million from a year earlier.
Businesses worldwide have struggled with record shipping costs and supply chain disruption as leading economies are open to pandemics again.
The group is repeating its guidelines from July, predicting annual sales of £ 295 million to £ 304 million, and recommends an interim dividend of 5.52 pa, 2 per cent more than a year ago.
Sales rose in all its key markets, raising the total by 36% to £ 141.8 million, led by a recovering Europe where revenue doubled.
Off-trade sales, aided by locks and people drinking at home rather than in pubs, exceed its expectations and remain above pre-pandemic levels. Sales in trade, which refers to business with hotels, pubs and restaurants rather than supermarkets, performed well, while outlets began to reopen and recover in the second quarter.
“While there is still a significant impact of the pandemic, the business is increasingly well placed to meet our long-term growth plans,” said CEO Tim Warrillow.