Shares of Fevertree Drinks PLC (LON: FEVR) plunged 9.73% after revealing that its margins were under pressure amid rising raw material and production costs.
The spirits maker released its financial results for the first half of 2021, where its revenues rose 39% to £141.8 million from the £104.2 million recorded in a similar period last year.
The premium mixers maker saw growth in the UK, its home market slow down to 4%, while growth in international markets picked up led by Europe whose revenues soared 104%, US sales rose 42%, while sales in the Rest of the World surged 71%.
Fevertree raised its full-year revenue guidance to £295 – £304 million based on the higher revenues but warned that its margins were shrinking due to rising shipping costs and logistics costs.
Tim Warrillow, Fevertree’s CEO, said: “Fever-Tree has made significant progress in the first half of 2021, delivering a strong revenue performance. The last 18 months have highlighted the strength of the Fever-Tree brand amongst our consumers and customers, as well as the fantastic team and partners we have in place. We continued to invest in the opportunity during the pandemic and have already started to see the benefits of our long-term outlook as the world has started to reopen.”
Adding:
“Our margins have been notably impacted by global logistics disruption. Despite this, we remain confident as ever in the strength of our business model and the opportunity to improve margins as we cycle out of the current period of COVID disruption.”
Fevertree shares are trading near the 2200p support level from a technical perspective that could trigger a rally if it holds over the coming days. However, a break below the level would bring the 2000p support level into focus.
The current setup does not provide an excellent trade setup until the price hits and bounces off either support level.
*This is not investment advice.
Fevertree share price.
Fevertree shares plunged 9.73% to trade at 2212.5p, falling from Monday’s closing price of 2451.0p.