Treatt Plc - Half-year Report

Fruit and vegetables, tea and sugar reduction driving top-line growth

 

Treatt Plc (the 'Group'), the manufacturer and supplier of innovative ingredient solutions for the flavour, fragrance, beverage and consumer products industries, announces its half year results for the six months ended 31 March 2019.

 

FINANCIAL HIGHLIGHTS:

 

Half year ended

31 March 2019

Half year ended

31 March 2018

Change

Revenue1

£56.6m

£53.6m

+5.7%

Gross profit margin1

25.0%

23.6%

+140bps

Adjusted operating profit1,2

£6.3m

£6.1m

+3.8%

Adjusted profit before tax1,2

£6.2m

£5.8m

+7.3%

Adjusted basic earnings per share1,2

8.35p

8.58p

-2.7%

Dividend per share

1.70p

1.60p

+6.3%

 

OPERATIONAL HIGHLIGHTS:

·    Fruit and vegetables, tea and sugar reduction categories have performed strongly.

·    Citrus core product category continues to lead the contribution to revenue despite cyclical fall in raw material prices.

·    Speciality chemicals outperformed management expectations at the half year.

·    Strong free cash inflow of £5.5m excluding major capital investment projects.

·    Ongoing investment in the Group's capacity to deliver long-term growth

Ø US expansion: completed March 2019, expected to be fully operational by June 2019.

Ø UK site relocation: 12-month construction period anticipated to commence Summer 2019.

 

Commenting on the results, Group CEO, Daemmon Reeve, said:

"Once again it is pleasing to report encouraging strategic progress. All categories have performed well despite cyclical weakness in some citrus raw material markets with particularly encouraging growth in our higher margin tea, sugar reduction and fruit and vegetable categories supporting the strong trend towards better for you and clean label, more natural beverages.

 

The past six months have seen much work across the business strengthening our teams, building and planning infrastructure to drive future growth, establishing Treatt in new growth markets and expanding our offer in established markets. These actions were achieved whilst improving profitability and margins and give the Board confidence that the business is well placed to deliver on its strategic objectives over the coming years.

 

With order books comfortably up on a year ago, we expect the encouraging performance in H1 to continue into H2.  Whilst there is still much to do to complete the year the Board remains confident that the Group will meet its expectations for the financial year ending 30 September 2019."