Fever Tree has said price increases on its soft drinks only partially helped to off-set cost pressures caused by heightened shipping costs.
The tonic-water seller said its gross margins had been hit by “inflationary cost pressures and continued exposure to elevated Trans-Atlantic freight costs,” in interim results published on Tuesday.
A gross margin of 37.4 per cent was lower than the 44.1 per cent gross margin reported in the first half of 2021.
It posted an adjusted EBITDA of £22m, compared to £29.2m in the first half of 2021. This was a 24.7 per cent decrease.
However, sales hit £160.9m, an increase of 14 per cent, after pubs and bars showed “promising signs of recovery and demand remaining strong” after Covid restrictions were eased across different markets.
The beverage maker also warned glass availability will be restricted across its suppliers in the second half of the year.
This will limit its “opportunity to deliver revenue upside despite the strong demand we’re seeing across our markets,” the company said.
Fizzing sales sent the company’s share price upwards, with shares up four per cent yesterday afternoon in late trading.
Analysts were upbeat about the results, with Edison Group’s director of consumer, Sara Welford, noting a “strong balance sheet,” as the company has cash of £100m, after the payment of a £50m special dividend announced in March.
“Despite the challenge consumer environment, Fever-Tree has continued to extend its premium market position in the UK, US, Europe and RoW,” she added.
“Management remains confident in the long term opportunity and therefore continues to invest for growth.”