Bury St Edmunds based ingredients manufacturer, Treatt, reports ‘solid performance’ with profit growth and accelerating sales in latest trading update.
A Suffolk ingredients manufacturer has reported a solid performance with profit growth and accelerating sales in its latest trading update.
Treatt, which supplies natural extracts and ingredients for the beverage, flavour and fragrance industries, made the announcement in its latest half-year trading update ending March 31 2024.
Highlights include:
▶ Revenue of £72.1 million (compared with £76.0mill in 2023), down 5.1 per cent
▶ Operating profit before exceptional items £8.2 million, compared with £7.7m in same period the previous year.
▶ Profit before tax and exceptional items £7.6 m compared with £7.3m
▶ Profit before tax £7.1m compared with 6.6m
▶Adjusted basic earning per share 9.35p compared with 9.04p
▶ Basic earnings per share 8.72p compared with 8.15p
Other results: Revenue acceleration in Q2 2024, growing by 5.1 per cent with order patterns normalising and new business wins, a contrast to Q1 2024, typically the quietest quarter, which was impacted by destocking as expected
• 120 basis point improvement in operating profit margin from embedded cost discipline and self-help measures annualising, in line with our goal of sustainably increasing margin
• Net debt of £10.3m reduced 41.6 per cent versus H1 2023. Good cash generation expected in H2 2024
• Interim dividend up 2.0 per cent, reflecting performance and progression towards 3x dividend cover
• The Board continues to expect to report full year profits in line with its expectations
• Good momentum into H2 2024 with a solid order book and healthy sales pipeline giving tangible line of sight on H2 2024 delivery
Ryan Govender, interim group CEO, said: “These results show a good growth in profit and operating margins.
“After the expected impact of destocking softened in Q1 2024, momentum in the second quarter was stronger as volumes grew, and we recorded our highest ever monthly revenue in March.
“We are pleased with our progress in China, with new opportunities being won with large local brands there.
“We also grew our higher margin premium categories, especially in tea.
“There are plenty of active new business opportunities, providing confidence for H2 2024.
“Momentum in the order book going into H2 2024 is good with a healthy sales pipeline which we are encouraged by.”
