Treatt shares rocket as order book and pipeline swell
More importantly, the order book is bulging - helping to send the UK share price 45.50p and 11.25 per cent higher to 450p a share when the market opened today (Wednesday).
From its new HQ in Bury St Edmunds, Treatt has laid the foundations for steady global growth. Profit before tax and exceptional items (PBTE) is expected to be marginally ahead of prior year at c.£7.5 million (H1 2023: £7.3m).
Revenue of £72.1m (H1 2023: £76m), reflected a subdued Q1 from the impact of destocking as expected and previously indicated; Treatt reported new wins in Premium products and in China, with both areas growing during the first half.
In New Markets, China grew 3.3 per cent (constant currency), securing further wins in leading local beverage brands and Treatt has established a broader base of local manufacturing partners. In line with its strategic ambition the company has begun scaling up of its global TreattZest manufacturing capacity, and this product will be relaunched in April.
The group ended the half year with net debt of £10.3m (FY 2023: £10.4m). It continues to focus on working capital management and has successfully reduced inventory volume by 5.6 per cent since September 2023 (16.7% lower than the comparable period), offset by higher commodity prices and seasonal build for strategic and premium demand.
An increase in receivables reflects the strong finish to the half year trading and Treatt anticipates a reduction in net debt in the second half.
Interim CEO Ryan Govender, said: "Treatt delivered a robust performance in the first half, making good progress in line with our strategic goals. We are particularly pleased with progress in China, where we continued to invest and consolidate our position, and in our higher margin Premium categories where we have a number of active pipeline opportunities. Momentum in the second quarter was strong, and we recorded our highest ever monthly revenue in March.
“As we enter the second half, we are encouraged by our solid order book and healthy sales pipeline. The board continues to expect to report full year PBTE in line with expectations."
