Fever-Tree's profit meets expectations, thanks to strong US performance

British company Fevertree Drinks, known for its energy drinks, had a successful year in 2023, with annual profits of around £30.5 million (€35.59 million), which met expectations set by analysts Thus this success was primarily due to their operations in the United States market , where they saw strong growth , and by increasing local production to mitigate the impact of rising costs associated with glass manufacturing

Established in 2003, Favertree faced challenges in its home market of the UK due to rising glass production costs, caused by rising energy prices following the Russia-Ukraine conflict This forced the company they took advantage of inflation and expanded glass production in the US. were achieved, effectively balancing the inflationary pressures they faced.

Additionally, Favertree has won new glass manufacturing contracts and benefited from lower freight rates across the Atlantic, which is expected to contribute to cost growth in year 2024 in the

Tim Warrilow, co-founder and CEO of Fevertree, highlighted the company’s global growth by 2023.

The increase in market share across geographies highlighted the importance of the U.S. market. is an emphasis on their large market, and positioned Fevertree as the tonic water and ginger beer category leader nationally

While the traditional ‘gin and tonic’ remains a key driver of Favertree’s growth, Warrilow also pointed to the strengths of their non-tonic portfolio which includes ginger beer, sodas and cocktail mixers

Looking ahead, Warrilow expressed confidence in Favertree's operating ability and forecast significant profit growth in 2024, driven by moderate inflationary pressures and operating efficiencies.

Analyst Charlie Huggins acknowledged the challenges Favertree faced in 2023, including rising commodity prices, adverse weather and subdued consumer sentiment, which slowed revenue growth and reduced profitability; however, he noted better prospects for 2024, when inflationary pressures eased, leading to potential returns

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Huggins emphasized that while Favertree has experienced challenges in recent years, particularly due to its reputation among investors, the outlook for 2024 is encouraging, particularly in terms of costs and profitability of development. Meeting or exceeding sales and turnover milestones in the coming year can help restore confidence in the company’s performance among investors.

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