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Mixer-maker Fevertree has warned annual profits will be lower than previously expected after the Ukraine war pushed up commodity prices “dramatically”.
The company said the surge over recent weeks had created “significant uncertainty in relation to input costs”.
That means underlying earnings for the year are expected at £63m-£66m, down from previous guidance of £69m-£72m.
The guidance was described as a “precautionary step in response to a seismic global shock”.
Shares slumped by 8% in early trading, leaving them more than 40% lower for the year to date.
Fevertree is one of the first consumer-facing UK-listed companies to quantify the financial hit from the volatility that has buffeted markets since Russia’s invasion of Ukraine.
Prices of commodities from oil and gas to nickel and wheat have soared, adding to inflation pressures across businesses – even those not directly trading with either of those two countries.
Wagamama owner The Restaurant Group, which also published results on Wednesday, said it was “mindful” of similar pressures though has not changed its financial guidance.
Fevertree’s update showed pre-tax profits for 2021 climbing by 8% to £55.6m with sales rising 23% to £311m.
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Why commodities surge is driving up inflation pressures
The company was already battling what it described as “unprecedented” supply chain disruption which resulted in a squeeze on its profit margins and a “global backdrop of inflationary pressures” even before the war.
It has taken action to try to mitigate some of the problems, which include lorry driver shortages, soaring transatlantic freight charges and US storage costs.
But…
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Source : skynews
