Fever-Tree issues profits warning after “subdued” festive sales
Tonics and mixers producer Fever-Tree has issued a profits warning and cut its sales forecast for the second time over a two-month period, due to tough trading conditions.
The company blamed a slowdown in consumer spending, particularly during Christmas 2019, and it said full-year profits would be about 5% lower in 2019 than in 2018, when it logged a 34% jump in pre-tax profits to £76 million.
The announcement caused shares in the company to drop 24%, trading at £15.05 yesterday, which is the lowest level for the company since April 2017.
Fever-Tree said it now expects to report full-year revenues of £260.5 million for 2019, which still represents a 9.7% increase in global sales. The figure is down from its original prediction of between £266 million and £268 million.
Chief executive, Tim Warrilow, said the company expects the conditions in the UK market to remain challenging for the first half of 2020.
He said: “Despite the subdued end to the year in the UK, we have delivered a strong performance across many of our regions in 2019 and begin 2020 with real momentum in a number of key growth markets.
“While the UK mixer category has clearly not been immune from the consumer belt-tightening seen in recent months, we remain the clear category leader and have a strong platform to return to growth during 2020 and beyond.”