TIDMTET
RNS Number : 4807P
Treatt PLC
10 October 2023
10 October 2023
TREATT PLC
("Treatt" or "the Group")
Trading update for the year ended 30 September 2023
Profit growth returns with resilient revenue performance
Treatt, the manufacturer and supplier of a diverse and
sustainable portfolio of natural extracts and ingredients for the
beverage, flavour and fragrance industries, today publishes a
trading update for the year ended 30 September 2023 ("FY23").
HIGHLIGHTS:
-- Resilient revenue growth of 5% (3% in constant currency) at
c.GBP147m (FY22: GBP140m), despite industry de-stocking
headwinds
-- FY23 profit before tax and exceptional items expected to be
in line with Board expectations of c.GBP17m, up by c.11% on
FY22
-- Successful pricing actions to recover raw material inflation
-- China and Coffee growth in line with expectations
-- Strong cost disciplines and other self-help measures
mitigating the impact of customer destocking
-- Year-end net debt of c.GBP10.5m (FY22: GBP22.4m), reflecting record cash generation
-- UK site transition now complete, providing strong platform for growth
FY23 Performance
Revenue for the year is anticipated to be c.GBP147m (FY22:
GBP140m), up 5% (3% at constant currency) despite the challenging
macro environment and sector destocking, particularly in H2. Sales
price increases were successfully implemented to offset raw
material price inflation reflecting value-add nature of Treatt's
product portfolio.
Core categories, which include Citrus, Synthetic Aromas and Herb
Spices & Florals have grown by 1% (revenue: c.GBP98m). Premium
categories, which include Tea, Health & Wellness, Fruit &
Vegetables, are in line with the prior year ( revenue: c.GBP33m).
New markets, which include Coffee, China and Treattzest citrus,
have grown by 60% (revenue: c.GBP16m).
The Board expects to report profit before tax and exceptional
items for FY23 of c.GBP17m which is c.11% ahead of prior year
(FY22: GBP15.3m), with strong cost discipline and other self-help
measures allowing more sales growth to convert to profit.
Operational developments
After substantial investment in our people and production
facilities over the last five years, we are well-placed to support
the next phase of growth, and do not anticipate any significant
increases to the cost base, other than inflation. The group
headcount has reduced by 14% since September 2022.
Having implemented a revised currency management strategy,
providing increased visibility and controls over our currency
exposures, foreign exchange impacts in the year were minimal.
Balance sheet
The Group ended the year with net debt of c.GBP10.5m (FY22:
GBP22.4m). With the transition to the new site now complete,
capital expenditure has returned to normalised levels. The Group
completed refinancing of the UK bank facility for GBP25m with HSBC
with a minimum term of three years.
Daemmon Reeve, CEO of Treatt, commented:
"We delivered positive growth in sales and profit for the year,
reflecting the significant price increase programme and ongoing
resilience in our beverage end markets. Revenues in the second half
of the year were impacted by certain customers reducing inventories
in response to interest rate rises. However, we are seeing some
early signs of a reversal of this temporary destocking effect, and
have also been able to mitigate the effect of this impact with
strong cost discipline and other self- help measures. With our
unique value-add products, in conjunction with the new site
transition now complete, we are confident in Treatt's long-term
prospects."
Treatt's results for the year ended 30 September 2023 are
expected to be announced on 28 November 2023.
Enquiries:
Joint Brokers
Investec Bank Plc +44 (0)20 7597 5970
Patrick Robb
David Anderson
Peel Hunt LLP +44 (0) 20 7418 8900
George Sellar
Mike Burke
Financial PR
MHP +44 (0) 20 3128 8789
Tim Rowntree
Eleni Menikou
Catherine Chapman
About the Group
Treatt is a global, independent manufacturer and supplier of a
diverse and sustainable portfolio of natural extracts and
ingredients for the flavour, fragrance and multinational consumer
product industries, particularly in the beverage sector. Renowned
for its technical expertise and knowledge of ingredients, their
origins and market conditions, Treatt is recognised as a leader in
its field.
The Group employs approximately 400 staff in Europe, North
America and Asia and has manufacturing facilities in the UK and US.
Its international footprint enables the Group to deliver powerful
and integrated solutions for the food, beverage and fragrance
industries across the globe.
For further information about the Group, visit www.treatt.com .
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END
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