Soaring commodity prices triggered by the Ukraine war may put pressure on other British companies after warnings about costs from drinks maker Fevertree and the owner of Wagamama noodle chain.
Fevertree on Wednesday slightly lowered its adjusted earnings to the range of £63mln to £66mln for the full year, noting that “commodity prices have increased dramatically in recent weeks because of the terrible events unfolding in Ukraine.’’
This has created ``significant uncertainty’’ in relation to input costs in the short term,’’ the company said.
Meanwhile, The Restaurant Group, owner of the Wagamama chain, suggested it could also be impacted by rising prices triggered by the Ukraine war.
“Management’s current expectations for FY22 remain unchanged, although we are mindful about the consequential inflationary impacts arising from the conflict in Ukraine.”
General food and drink inflation is expected to result in cost inflation of 5%+, the company said, before taking into account any impact from the war.
“There is going to be a knock-on effect for other companies,’’ though “it will take a while for this to flow through” said Alan Beaney, investment director at fund manager RC Brown.
“Anyone who uses a lot of energy is going to be affected.”
Shares of Fevertree, however, advanced 1.8% after its results, while The Restaurant Group jumped 6.7%.
“It’s an incredibly volatile market at the moment,” with a low volume of trades, said Beaney.