Business
Half Year Trading Update & Notice of Results
Half Year Trading Update & Notice of Results.
About this update from Treatt Plc
[{"type":"text","content":"\n\n \n10 April 2024\n \nTREATT PLC\n(\"Treatt\" or \"the Group\")\n \nHalf Year Trading Update and Notice of Results\nSolid performance in H1 2024, with sales accelerating in the second quarter and year-on-year profit growth\nTreatt, the manufacturer and supplier of a diverse and sustainable portfolio of natural extracts and ingredients for the beverage, flavour and fragrance industries, announces the following trading update for the half year ended 31 March 2024 (the \"Period\").\nHIGHLIGHTS:\n· Profit before tax and exceptional items (PBTE) expected to be marginally ahead of prior year at c.£7.5m (H1 2023: £7.3m).\n· H1 revenue of £72.1m (H1 2023: £76.0m), reflecting a subdued Q1 from the impact of destocking as expected and previously indicated; and an acceleration in Q2, with sales growing by 5.1% (7.7% in constant currency) compared to the same quarter in FY 2023.\n· New wins in Premium products and in China, with both areas growing during H1.\n· Improved net operating margin of c.11.0% (H1 2023: 10.1%), reflecting embedded cost disciplines and self-help measures\n· Net debt unchanged from 30 September 2023 at £10.3m (FY 2023: £10.4m), reflecting higher citrus commodity prices and high receivables at period end from strong March sales; however good cash generation expected in H2 as receivables convert to cash\n· Looking to H2, we have a solid sales order book and healthy sales pipeline\n· H2 full year PBTE anticipated to be in line with the Board's expectations.\nH1 2024 Performance\nRevenue for the half year declined by 5.1% (2.7% decline in constant currency) to £72.1m (FY 2023: £76.0m) as anticipated. Q1, which is typically our quietest quarter, saw a decline year on year due to destocking, however sales were 5.1% ahead (7.7% in constant currency) in Q2 as destocking softened, as expected.\nHeritage sales declined by 6.0% (constant currency) as citrus customers elected for cheaper alternatives because of sustained high orange oil prices. Despite this, we continue to support our customers with innovative and differentiating solutions. Within Heritage, Synthetic Aroma was up 3.9% (constant currency), which we consider to be reflective of demand returning in this category which was impa...