Fevertree Drinks PLC jumps 13% despite falling profits

Shares of Fevertree Drinks (AIM:FEVR) PLC soared 11.5% today despite the group reporting lower first-half profits, which were hit by rising costs.

In the six months to June 30, profit before tax fell 30% to £17.6m, while adjusted profit before interest, tax, depreciation and amortization was 25% lower at £22m. pound sterling.

Revenue rose 14% to £160.9m, but gross margin fell to 37.4% from 44.1% in the same period last year.

Fevertree pointed to rising ocean freight costs and although it took pricing action to mitigate those increases, it was not enough to offset the impact of inflationary headwinds in the first half.

Broker Peel Hunt remained positive.

“Revenue growth, product innovation, market share gains in all geographies, and the potential for margin recovery through self-help make an attractive investment case for a consumer product of high quality brand base, light in assets,” he said.

Ocado slips after retail arm warns of profits

Shares of Ocado Group PLC (LSE:OCDO) fell 13% following a warning of falling sales and earnings at its Ocado Retail joint venture.

Richard Hunter, head of markets at Interactive Investor, said Ocado Group PLC’s (LSE:OCDO) warning about declining sales and profits at Ocado Retail had the effect of confining Ocado to becoming a perennial stock. of “jam tomorrow”.

Hunter said Ocado Retail, the joint venture with Marks and Spencer PLC, remains the group’s main revenue driver, but lighter baskets and heavier costs are weighing on progress.

“While accounting for approximately 90% of total group revenue, today’s statement relates only to the joint venture with Marks & Spencer and therefore does not provide an update on the Solutions business,” noted Hunter, adding “The high-tech and unique offering driven by robotics and seamless delivery is one where strong growth is long overdue, but has yet to materialize in any meaningful way.

Hunter concluded, “The jury remains out on the outlook at this time with the market consensus still stuck, albeit strong.”

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