Wagamama owner and Fever-Tree warn of cost increases as energy prices soar
The drinks maker Fever-Tree and the owner of the Wagamama and Frankie & Benny’s restaurant chains have warned of dramatic cost increases as the price of commodities and gas and electricity soars and the war in Ukraine adds pressure to their businesses.
Fever-Tree has lowered its profit guidance, blaming a “dramatic increase” in commodity prices after Russia’s invasion of Ukraine. The company, which had forecast adjusted profits of £69m to £72m this year, has downgraded its outlook to between £63m and £69m.
“There remains a global backdrop of inflationary pressures against which we are employing a range of mitigating actions,” Fever-Tree said.
“However, commodity prices have increased dramatically in recent weeks because of the terrible events in Ukraine and has created significant uncertainty in relation to input costs.”
Fever-Tree, which reported a 23% increase in revenues to £311m and an 8% rise in pre-tax profits to £55.6m last year, reassured investors that it was managing its ballooning cost base, which has hit margins.
Operating expenses increased by almost 15% to £67.9m last year, as the company’s margins shrank from 22.6% to 20.2%.
“The tragic situation in Ukraine has resulted in significant uncertainty in relation to our input costs in the short-term,” said Tim Warrillow, a co-founder and the chief executive of Fever-Tree. “[However], the long-term global opportunity for Fever-Tree remains substantial and we are as confident as ever in the brand’s ability to capitalise on this.”
The Restaurant Group (TRG) – which operates 400 restaurants and pub restaurants throughout the UK, and also runs concessions mostly in airports under brands including Garfunkel’s, the Tex-Mex chain Chiquito, Brunning & Price and Coast to Coast
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