Fever-Tree cuts guidance as wet summer weather dampens sales

Tonic maker Fever-Tree has cut its sales and profit targets for the year after being hit by poor UK summer weather.

It came after the drinks firm saw profits tumble over the first half of the year in the face of higher glass manufacturing costs.

The company said pre-tax profits slid to £1.4 million in the six months to June, from £17.9 million a year, as it also noted a £3.3 million exceptional cost relating to a production issue in the US.

Fever-Tree told shareholders it has made “good progress” in efforts to mitigate inflationary cost challenges, with the company lifting prices to offset more expensive materials.

But the company said it is now on track to deliver earnings of between £30 million and £36 million for 2023 as a whole.

In May, the company guided towards a range of £36 million and £42 million.

On Tuesday, Fever-Tree said “unseasonably poor weather in the UK” resulted in subdued demand over the key summer period.

It said the impact of weather and an inventory buyback in Australia means it is set to post revenues of between £380 million and £390 million for the year.

The company had previously pointed towards a revenue range of £390 million to £405 million.

It comes after revenues jumped by 9% to £175.6 million over the first six months of the year, driven by a surge in demand in the US.

Tim Warrillow, Fever-Tree chief executive, said: “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 reminder of 2023.

“Looking ahead to 2024, with a stronger global market position than ever before, a broader product portfolio and our confidence in delivering significant margin improvement, the group is well set up for strong, profitable growth going forward.”