Upmarket tonic maker Fever-Tree became the latest business to be battered by Britain’s unpredictable and damp weather, as a wash out summer led the group to cut its annual profit expectations for the year.
Chief of the firm, Tim Warrillow blamed the “vagaries” of the British summer weather for the cut, with the company now expected to post adjusted Ebitda in the range of £30m to £36m down from an earlier range of between £36m and £42m.
In an interim update to June 2023, Fever-Tree saw gross profit fall 11 per cent to £53.8m, as rising glass costs also impacted the business.
But revenues in the group grew nine per cent on a year-on-year basis to £175.6m, driven by strong growth in the US.
Fever-Tree’s share price fell one per cent when markets opened this morning, but has since managed to rebound to trade 1.63 per cent higher.
“Whilst the vagaries of the British summer weather have impacted sales since period end, contributing to our revised guidance for the full year, the group still expects to deliver good growth in the remainder of 2023,” Warrillow said.
Despite delivering strong growth in the US, gaining market share in the UK and seeing progress in other parts of the world, “the business can’t seem to get a break,” Russ Mould, investment director at AJ Bell said.
“Fever-Tree still seems to have as many critics as it does fans. Admittedly, profits, margins and cash fell in the first-half period which suggests a business under pressure. Its challenge is to reverse that trend and get everything back on track,” he added.
A number of UK hospitality and high street businesses have blamed the UK’s rainy summer for ruining trade.
The wider hospitality sector also struggled over the summer, as spending in bars, pubs and clubs rose by only 2.8 per cent in July due to the rainy spells – the lowest rate of growth since October 2022, according to data from Barclays.