Good morning. The posh mixers group Fever Tree Drinks has warned that “dramatic increases” in commodity prices in recent weeks has “created significant uncertainty” and has nudged profit forecasts lower.
Fever Tree now expects to deliver earnings before interest, taxes, depreciation, and amortisation of between £63 million and £66 million in the present year, down from a forecast of between £69 million and £72 million.
“Fever Tree is not immune from the widely reported and increasing industry cost pressures, and related margin impact – but the long-term opportunity remains significant,” the company stated.
The warning came as Fever Tree posted full-year results for 2021. Pre-tax profits rose 7 per cent to £55.6 million last year, up from £51.6 million. Revenue over the period rose 23 per cent to £311.1 million, up from £252.1 million.
Alongside the results, Fever Tree announced plans to return £50 million to shareholders alongside full-year results. Once a “stock market darling”, shares in Fever Tree have slid 34 per cent over the last year.
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Elsewhere on the corporate front this morning:
AVAST: The UK competition regulator said that the £6.2 billion purchase of the FTSE 100 cybersecurity company by the US rival NortonLifeLock raised competition concerns and may now be referred for an in-depth investigation. The Competition and Markets Authority said that the deal could lead to British customers getting a worse deal when looking for cyber security software. NortonLifeLock and Avast have five working days to submit proposals to address the CMA’s concerns.
COMPUTACENTER: Alongside full-year results for the FTSE 250 provider of cloud services and seller of PCs, it has said that it expects 2022 will be “a year of further progress”. The actual numbers - 2021 pre-tax profits up 20 per cent at £248 million - shouldn’t be a surprise after an upbeat trading update in January.
IG GROUP: The online trading platform expects full-year revenue to “moderately exceed” market expectations on strong trading volumes, as the Ukraine crisis fuels market volatility. It reported a 13 per cent rise in revenue to £257 million in the third quarter of 2021 compared with a year earlier when a retail frenzy in stock markets had driven up revenue. Active clients rose to an all-time high of 292,200.
We will also have updates this morning from the FTSE 250 miner Centamin and the Wagamama owner The Restaurant Group.
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Attention will switch to the US later with the conclusion of the latest meeting of the Federal Reserve (6pm UK time). With inflation well above the central bank’s 2 per cent target and unemployment slipping back to pre-pandemic levels, the Fed is set to increase interest rates for the first time in more than three years and give guidance on future tightening.
According to CME’s Fedwatch Tool, futures markets are pricing the chance of the Fed raising its target range to between 0.25 and 0.5 per cent (from 0 - 0.25 per cent) at 96 per cent.
Finally, yesterday’s Cheltenham tip led for much of the race but faded in the final furlong. Robert Lea, our resident tipster, opts for Editeur du Gite today, each way, in the 4.50, who (pleasingly for me at least) runs in the colours of his owner’s beloved Crystal Palace.
Please do keep sending your thoughts, observations (and corrections) to me at richard.fletcher@thetimes.co.uk and don’t forget to follow me on Twitter @fletcherr.
