The boss behind tonic-maker Fever-Tree has coughed up more than £1m on shares after the firm suffered a huge blow last week.
A concerning profit warning meant the London-listed company’s stock crashed by some 26 per cent late last week.
Now, chief executive Tim Warrillow has bought 115,000 shares at 870.8p each while Fever-Tree’s chairman Bill Ronald has bought 11,416 shares at 872p, worth £99,500.
The premium drink seller cut its annual profit forecast by a third due to labour shortages and hurtling costs subduing production.
EBITDA guidance was slashed to £37.5-45m, in the update made on Friday morning.
Fever-Tree has seen delays to an acceleration of its production plants in the US, meaning more UK production and freight costs required.
The business had also been hammered by a glass shortage, which caused margins to slim even further.
Shares plunging could result in a bonanza payday for investors who believed its shares would keep falling.
Short-sellers such as Black Rock Investment Management and Millennium International Management have targeted the stock.
“Given the extent of the profit warning, this poses big questions over both the brand’s pricing power and long-term profit potential,” Emma Letheren, analyst at the Royal Bank of Canada, said of the profit warning.
What’s more, the bank said it had not really seen “anything like this extent from elsewhere,” although it warned the update perhaps “should be seen as a portent for other beverage businesses with big US businesses.”
The business was “working on a large number of initiatives” and working closely with suppliers to fend off headwinds, Warrillow reassured investors last week.
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