British tonic maker Fevertree Drinks has today forecast that its annual core profit will fall short of market expectations, even as profit doubled in the second half on strong US market performance, offsetting inflationary cost pressures in materials.
The company, which was founded in 2003, has been grappling with high glass costs in Britain ever since the Russia-Ukraine conflict pushed up energy costs.
This forced it to initiate price increases to protect margins, while also ramp-up its glass production in the US.
The tonic maker today reported a 6% rise in total revenue for the year ended on December 31, which included a 22% growth in the US, its largest market by revenue.
It said it currently expected a significant improvement in gross margin for 2024, underpinned by new glass contracts with fully hedged energy pricing and lower Trans-Atlantic freight rates.
The company, which manufacturers and sells drink mixers, said it now expected core profit for the year to be about £30m, compared with its prior expectations of £30-36m.
Analysts on average expected core profit to be about £32.7m, according to a company provided consensus.
Separately, soft drinks maker Britvic said it witnessed strong trading during the Christmas season, aiding it to project full-year results to be in the range of market expectations.
