Shares in high-end tonic water brand Fevertree Drinks soared by 13% today despite the group reporting a drop in profits in the first half of the year which were hit by rising costs.
In the six months to June 30th, pre-tax profit dropped 30% to £17.6m, while adjusted earnings before interest, tax, and depreciation were 25% lower at £22m.
Additionally, revenues rose by 14% to £160.9m but the gross margin declined to 37.4% from 44.1% in the same period last year.
The mixers manufacturer said it struggled to avoid high transatlantic shipping costs as the bottling plant it uses in the US struggled to hire enough staff.
The business also warned that securing enough glass bottles might become a problem in the second half of the year.
This “will limit our opportunity to deliver revenue upside despite the strong demand we’re seeing across our markets”, Fevertree said.
The company also said pressures on glass costs have been driven by the high price of gas, saying: “A sustained elevation in gas price is being passed through by suppliers against a backdrop of limited glass availability across the group’s suppliers in the UK and Europe.”
With demand for Fevertree products increasing, the tonic water brand is committed to expanding their availability on supermarket shelves.
“Fevertree has delivered a robust revenue performance in the first half of 2022, with a particularly strong performance in Europe as the on-trade recovered,” said chief executive and co-founder for Fevertree Tim Warrillow.
“Alongside driving topline growth, the business remains extremely focused on mitigating the industry-wide cost impacts and whilst we are still highly mindful of the extreme volatility impacting energy-related and logistics costs, we do expect to see a gradual decrease in our exposure over the medium term.”
