Fever-Tree, the UK mixers supplier, has lowered its forecasts for annual revenue and EBITDA.
The listed group pointed to issues in its domestic market and in Australia for the cut to its top-line guidance.
Fever-Tree’s new forecasts came alongside the publication of the company’s half-year results, which included higher revenue but lower profits.
The first-half numbers took in the six months to the end of June and Fever-Tree, in lowering its forecasts, said its sales in the UK had since been hit “unseasonably poor weather”. Fever-Tree said the UK mixers category had been “subdued”.
A change to Fever-Tree’s distribution model in Australia has led to a “one-off” buy-back of inventory, which also weighed on sales.
The company now expects to generate revenue of between £380m ($474.4m) and £390m in 2023, down from a forecast filed in March of £390m to £405m.
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In a stock-exchange filing, Fever-Tree said it was “making good progress” in mitigating pressure on costs. The group reiterated its gross margin guidance of 31% to 33% for 2023.
The company added: “We remain committed to investing in the substantial future opportunity for the brand across our regions and expect overheads to be in the range £88m to £92m resulting in FY23 EBITDA guidance range of circa £30m to £36m.”
In March, Fever-Tree had forecast annual EBITDA would be between £36m to £42m.
US becomes Fever-Tree’s largest market
During the first half of the year, revenue rose 9% to £175.6m. In the UK, revenue inched up 1% to £53.8m.
Across the Atlantic, Fever-Tree saw revenue in the US grow 40% to £56.1m. The US became the company’s largest market, leapfrogging the UK.
CEO Tim Warrilow said: “We had a standout performance in the US where the brand continues to go from strength to strength, extending our leadership position in the tonic and ginger beer categories. This reflects how well-established the brand is becoming in the world’s largest premium spirit market.
“In the UK, despite the challenging macro-economic conditions, we ended the first half with our highest ever value share of 45%, which is over 50% higher than our nearest competitor.”
Adjusted EBITDA dropped 54% to £10.2m. The group highlighted a fall in its gross margin and the “phasing of overheads” as the company “invests for growth”.
Profit for the period was £1.1m, versus £14.1m in the first half of 2022.
Warrilow added: “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 remainder 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.”
Shares in Fever-Tree were down 0.97% at 1,292.3p at 09:30 BST.