British tonic maker Fever-Tree has announced plans to hike product prices and ramp up its U.S. production to help cushion the pressures faced from high costs of manufacturing glass.
Energy and commodity prices have increased since Russia invaded Ukraine last year, sending companies across the globe scrambling for ways to rein in costs, particularly in areas such as packaging.
'As we navigate these challenging conditions ... passing through some of these impacts through price across our regions, whilst focusing on our own margin improvement initiatives,' the company said in a statement.
Profit Decline
The company reported a 37% fall in its adjusted core profit to £39.7 million (€45.2 million) for the year ended December 31. Revenue was 11% above the previous year's levels at £344.3 million (€392.2 million), in line with analysts' expectations.
Fever-Tree reiterated its guidance range of £390 million to £405 million, expressing confidence in achieving 'strong' growth of 13% to 18% year-on-year. It reported continuing 'momentum' across its growth regions, particularly in the US, as well as a return to growth in the UK.
To tackle 'significant' inflationary pressures, the drinks firm will turn to a combination of pricing strategies across regions, cost-saving initiatives, and an increase in local US production, it added.
Read More: Fever-Tree Expects 2023 Revenue To Jump Despite Inflationary Concerns
'Maintaining Momentum'
"We have seen an encouraging start to 2023 in our key growth markets and are confident of maintaining the group's momentum in the months ahead," commented chief executive Tim Warrillow. "The Fever-Tree brand, as shown by our highest ever combined market share in the UK, and leadership position across many markets, is stronger than it has ever been.
"Whilst the group continues to operate in a challenging cost environment, we are resolutely focused on delivering a wide range of initiatives across the business that will optimise operational capabilities and underpin our confidence in driving margin improvement in 2024 and beyond."
Read More: Increased Costs Could Flatten The Fizz At Premium Mixers Brand Fever-Tree, Says Analyst
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