Treatt Revenues Remain Steady in H1
Chairman James Grace said, “Given the continuing uncertain economic climate, the Group had a satisfactory result for the six months to 31 March 2010, with Group revenue remaining steady at £28m."
26 May 2010 --- Treatt PLC, the manufacturer and supplier of conventional, organic and fair traded ingredients for the flavour, fragrance and cosmetic industries has announced its half year results for the six months ended 31 March 2010.
EBITDA increased by 4% to £2,248,000 (2009: £2,163,000) Profit before tax for the period up by 7% to £1,487,000 (2009: £1,393,000) Earnings per share increased by 7% to 9.4 pence (2009: 8.8 pence) US subsidiary Dollar profits almost doubled Interim dividend raised by 11% to 4.1p (2009 interim dividend: 3.7p)
Chairman James Grace said, “Given the continuing uncertain economic climate, the Group had a satisfactory result for the six months to 31 March 2010, with Group revenue remaining steady at £28m. EBITDA increased by 4% to £2.25m (2009: £2.16m) and profit before tax rose by 7% to £1.49m (2009: £1.39m). Earnings per share have consequently advanced to 9.4 pence per share (2009: 8.8 pence per share).”
The Group had a mixed first half, with Q1 lagging behind expectations whilst conversely Q2 showed a marked improvement. Overall, the Group’s first half performance was in line with expectations as customers began to tentatively re-stock, with both sales and margins holding up well across the Treatt Group. Prices of the Group’s main commodities, in both Euros and US Dollars, also began to firm following last year’s recessionary weakness. Many citrus oil and aroma chemical prices have strengthened since the lows last year, with orange oil in particular (which represents approximately 15% of Group turnover) having more than doubled in price compared to its lows in 2009.
R.C. Treatt, the Group’s UK operating subsidiary, ended the period strongly, achieving record monthly sales in March, as it benefitted from strong contract ‘call-offs’ from major customers as well as healthy demand across the entire product portfolio as customer sentiment improved. The policy of hedging its currency exposure through a ‘natural’ overdraft hedge meant that margins in sterling terms were increased, whilst incurring an adverse foreign currency retranslation difference of £0.3m for the period.
After several years of continued growth, aroma chemical sales have grown by a further 14% compared to the same period last year with margins remaining steady. Sales to China and Hong Kong, following last year’s double digit growth, have remained strong in the face of ever increasing competition.
Following a difficult 2009, Treatt USA also improved towards the latter part of the period, with profits almost doubling those of the corresponding period last year at improved margins. Treatt USA’s sales effort is mainly focussed on the North American market and it does seem that the lagged effect of improved economic conditions within the flavour and fragrance sector in the US is now beginning to come through as customers seek to rebalance their inventories. Sales of the Treattarome ‘From The Named Food’ range of natural distillate products have continued unabated, with like for like growth in excess of 20%.
The performance of Earthoil has been mixed over the period and has been below expectations. The Board is now carrying out a full review of this business in order to ensure improved results in the next fiscal year.
