REG - Treatt PLC - Half Year Results
13/05/2025 07:02
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RNS Number : 3459I Treatt PLC 13 May 2025
13 May 2025
TREATT PLC
HALF YEAR RESULTS
SIX MONTHS ENDED 31 MARCH 2025
Treatt PLC ("Treatt" or the "Group"), the manufacturer and supplier of a
diverse and sustainable portfolio of natural extracts and ingredients for the
beverage, flavour and fragrance industries, announces its half year results
for the six months ended 31 March 2025 (the "Period").
FINANCIAL HIGHLIGHTS:
Half year ended Half year ended Change
31 March 2025 31 March 2024
Revenue £64.2m £72.1m -11.0%
Gross profit margin 24.9% 27.8% -290bps
Adjusted(1) EBITDA £6.5m £10.6m -38.9%
Adjusted(1) Operating profit £3.8m £8.2m -53.1%
Adjusted(1) Operating profit margin 6.0% 11.3% -530bps
Profit before tax and exceptional items £3.6m £7.6m -52.1%
Profit before tax £2.9m £7.1m -59.6%
Adjusted basic earnings per share 4.49p 9.35p -52.0%
Basic earnings per share 3.56p 8.72p -59.2%
Dividend per share 2.60p 2.60p +0.0%
1 Adjusted measures exclude exceptional items, details of
which are given in note 7
HIGHLIGHTS:
· Revenue of £64.2m (H1 2024: £72.1m), reflecting lower Heritage and
Premium volumes.
· Meaningful strategic progression during the Period, including further
broadening of sales into Premium categories
· Adjusted EBITDA of £6.5m (H1 2024: £10.6m)
· Profit before tax and exceptionals ("PBTE") of £3.6m (H1 2024:
£7.6m)
· Net cash position of £0.9m (FY 2024: Net debt £0.7m) reflecting
robust cash generation
· Reflecting the Board's ongoing confidence in Treatt's medium-term
outlook and the Group's strong cash performance, the £5m share buyback
programme announced on 10 April 2025 continues, and today announces a dividend
per share of 2.60p (as per prior year)
OUTLOOK
As announced on 10 April 2025, the Group expects full year revenue of between
£146m and £153m, and PBTE between £16m and £18m for the full year to 30
September 2025.
This revised outlook was driven by the following key factors:
· Lower demand in Heritage due to sustained high citrus prices
affecting buying patterns, has led to customer reformulation, resulting in a
decline in value-added citrus volumes, a trend we expect to continue for the
remainder of the year. However, we continue to leverage our deep knowledge and
product capabilities to provide alternative solutions to our customers,
against a challenging market backdrop.
· Consumer confidence in the US has softened impacting the overall
beverage market in North America. Macro pressures, including recent
geopolitical uncertainty in the US, have and are expected to continue to
impact on our sales demand with a softening in the beverage market.
Notwithstanding these trading challenges, we remain confident in delivering
our revised full year expectations, underpinned by the following factors:
In terms of sales, H2 is already 50% covered, and in line with historic trends
and current indicators we expect 35% to be delivered through repeat customer
business. The remaining 15% (a similar level to this time last year) is
expected to be delivered through existing pipeline opportunities.
In order to mitigate inflationary cost pressures and invest in growth areas,
we have implemented several self-help measures in H1, with focus on
simplification and efficiency gains. We do not anticipate any significant
increase in administrative expenses in FY25 compared to FY24.
We are encouraged by some exciting wins in Premium, including securing a large
new customer in North America, capitalising on the low and no sugar trend.
Additionally in New Markets, we have a healthy pipeline of opportunities for
H2 and are progressing distribution arrangements to expand our reach. These
wins and healthy pipeline provide confidence in our medium-term strategy of
differentially growing our Premium category and New Markets while continuing
to serve customers with our well established Heritage products for which
Treatt is well renowned.
The situation around US trade tariffs remains fluid, and we are following
developments closely to better understand the extent to which Treatt will be
affected, both directly and indirectly. However, Treatt's diverse supply
chain, including our significant manufacturing presence in the US and UK,
gives us the flexibility to support our customers in diverse ways in different
markets and, depending on the outcome of various tariff negotiations
internationally, could result in revenue growth opportunities arising from our
dual manufacturing capabilities
Commenting on the results, Group CEO, David Shannon, said:
"This has been a disappointing first half with revenue and profitability
impacted by predominantly short-term trading challenges, but there are
encouraging signs for the future.
Treatt made meaningful strategic progression in the first half of the year. We
focussed on expanding our reach with customers and I am particularly pleased
that our Shanghai innovation centre, which will be instrumental in
accelerating growth in China, is on track to open later this year. Our new
French sample laboratory opened in April 2025 which will provide faster more
efficient customer collaboration. Efforts to expand reach in Asia are
progressing well. We are winning with our technologies in line with global
trends, including sugar reduction to broaden into high value categories. Our
new website also launched last week to support enhanced customer centricity.
We are encouraged by our robust order book and sales pipeline, and expect to
realise the benefit of self-help measures in the second half. Our existing
sales coverage, expected repeat business, and a robust order book and sales
pipeline, together with the benefits of self-help measures implemented in the
first half, give us confidence in delivering in line with our revised
guidance."
Analyst and investor conference call
An in-person presentation for analysts and investors will be held at 9.30 a.m.
today, 13 May 2025. For details and to confirm attendance, or for webcast
information, please contact MHP at treatt@mhpgroup.com. A recording will be
made available after the event.
In accordance with DTR 6.3.5 please find below the unedited full text of the
half year results.
A copy of the half year results will be submitted to the National Storage
Mechanism and will shortly be available for inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://protect.checkpoint.com/v2/___https:/data.fca.org.uk/___.bXQtcHJvZC1jcC1ldXcyLTE6bmV4dDE1OmM6bzpmNjdlZWEwNWMwOThmZWRhNTYyZDc1YmI4NzEwZTgyODo2OmU3ZTc6NjI0MWQ4MjExOWVlM2JiM2JlZjE4NjIxMzYxNGI4ZjcyNWYyMmZjOWNiZTBjMzQzYjI5NDExN2FlYTg4YzRkYTpwOkY6Tg#/nsm/nationalstoragemechanism)
. It will also be available on the Treatt website at
www.treatt.com/investor-relations
(https://protect.checkpoint.com/v2/___http:/www.treatt.com/investor-relations___.bXQtcHJvZC1jcC1ldXcyLTE6bmV4dDE1OmM6bzpmNjdlZWEwNWMwOThmZWRhNTYyZDc1YmI4NzEwZTgyODo2OmQ5Mzc6MGQxZjAwMjI2Y2UwOTU2MjZjYmJmZTYyZTU3NmM2ODNhODVmMGQyNGU3ODdjZGJjNzVhNjIyMzMwZTFhMzRlMTpwOkY6Tg)
.
Enquiries:
Treatt PLC +44 (0) 1284 702500
David Shannon Chief Executive Officer
Ryan Govender Chief Financial Officer
Joint Brokers
Investec Bank Plc +44 (0) 20 7597 5970
Patrick Robb
David Anderson
Peel Hunt LLP +44 (0) 20 7418 8900
George Sellar
Finn Nugent
Financial PR
MHP +44 (0) 7701
308818
Tim Rowntree
Eleni Menikou
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 around 360 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
(https://protect.checkpoint.com/v2/___http:/www.treatt.com___.bXQtcHJvZC1jcC1ldXcyLTE6bmV4dDE1OmM6bzpmNjdlZWEwNWMwOThmZWRhNTYyZDc1YmI4NzEwZTgyODo2OjI4MmQ6NGQyZjkwYzEwNzA4OWI0NzEzNTk4NDVmNWUyNWZhNjA1NmNjNmFlYTU5MmJiZDhkNTJlMTQ3MmI5ZTgwN2Y2ODpwOkY6Tg)
.
HALF YEAR RESULTS STATEMENT
Introduction
H1 was a challenging start to the year. Q1 is always our quietest quarter and,
although Q2 picked up and there are some signs of encouraging momentum, Q2 was
lower than expectations as we already announced in April 2025.
Overall, first half revenues declined by 11.0% (10.3% in constant currency),
and PBTE declined to £3.6m (H1 2024: £7.6m). The decline in profit was
largely led by the sales decline, as well as some investment in our new
regional structure. The sales decline was predominantly led by two key
factors, firstly, sustained high citrus prices affecting buying patterns, and
secondly, lower North America consumer confidence arising from macro
geopolitical uncertainties affecting demand.
Gross profit margin was 290 bps lower in the Period (24.9% vs 27.8% in H1
2024), and adjusted net operating margin declined by 530 bps to 6.0% (H1 2024:
11.3%). The gross margin decline was driven by a combination of product mix
with lower North America premium sales and also sustained high citrus prices
affecting customers' buying patterns. Whilst the Group continues to have
strong cost control discipline and ongoing self-help measures, we did see an
overall increase in administrative expenses in H1 as we invested in the new
structure. Expenses are being managed carefully and we do not anticipate that
they will be significantly higher for FY25 as a whole compared to FY24.
Following the H1 performance, the Group issued revised guidance on 10 April
2025, projecting full-year revenues between £146m-£153m, and full-year PBTE
ranging from £16m-£18m.
Strategic focus
Treatt made meaningful strategic progression in the first half of the year. We
focussed on expanding our reach adding 27 new customers. Efforts to expand
reach in Asia are progressing well. We are winning with our technologies in
line with global trends, including sugar reduction to broaden into high value
categories.
With focus on expanding our reach, we have made good progress with our
Shanghai innovation centre which is on track to open later this year. Our new
customer focussed website has recently launched to significantly improve the
customer experience and better communicate the value we deliver.
With the aim to broaden into high value categories, we have been focussed on
building our Premium pipeline. We're doubling down on sugar reduction - an
area where Treatt has already delivered strong results for leading beverage
brands. With growing demand for healthier, great-tasting drinks, our
flavour-first, clean-label solutions are now being adopted more widely across
categories like flavoured waters, energy drinks, and functional beverages.
This strategic focus positions us to capture greater share, deepen customer
relationships, and drive long-term profitable growth as evidenced by an
important new customer win in America with our sugar reduction solution and
the growth of Treattzest.
The differentiated service model focusses on localised innovation, we have
launched three new products this half, with seven more in the plan for H2. Our
new French sample laboratory opened in April which will provide faster more
efficient customer collaboration. Our new regional structure is in place and
focussed on making fast decisions closer to customers.
Sales performance
Heritage
Heritage sales, which includes citrus (excluding Treattzest), herbs, spices
& florals, and synthetic aroma, declined by 10% in constant currency,
mainly as a result of lower volumes of value-added citrus, driven by sustained
high citrus prices affecting buying patterns. We are encouraged by the
performance of synthetic aroma and herbs, spices & florals, where volumes
have increased year-on-year.
Citrus, representing 46.8% of Group revenue in the Period (H1 2024: 47.3%),
declined by 11.8%, reflecting the impact of sustained higher prices, in
particular orange oil. Customers remain cautious about inventory levels in a
higher price market, which continues to impact volumes, with some electing for
cheaper alternatives to maintain a lower cost-in-use. The diversity in our
citrus product range has been instrumental in supporting our customers with
this required agility.
Synthetic aroma, which relates primarily to food ingredients, represented
14.2% of Group revenue in the Period (H1 2024: 13.8%), whilst reporting 8.3%
revenue decline in the Period, volumes grew by 12.0%. This represents a
falling market from a price perspective, however, we remain competitive and
our focus on maintaining cash contribution has been effective. This category
was notably impacted by a decline in volume last financial year, due to
customer destocking, and we remain encouraged by the build in volumes over the
course of H1. Herbs, spices and florals, while a smaller part of Heritage,
also saw encouraging volume growth in H1.
Premium
Higher margin Premium sales declined by 13.9%, with softer consumer demand
across key premium categories in North America due to lower consumer
confidence arising from macro and geopolitical uncertainties.
Premium includes tea, health & wellness, and fruit & vegetables. This
represents 24.1% of revenue at £15.5m (H1 2024: £18m). Slower US consumer
demand has impacted all of these categories in H1, however, with some exciting
wins including a significant win in health & wellness, we are encouraged
by the H2 outlook for Premium.
New Markets
Whilst New Markets, which encompass our geographical sales territory of China
and our expanding portfolio for Treattzest and coffee, declined by 6.5% in the
Period driven by coffee, to £6.1m revenue (H1 2024: £6.6m), we remain
committed to further harnessing the growth potential within this strategic
category and we are excited by our pipeline of tangible targets.
Treattzest is our authentic, premium range of highly soluble citrus extracts.
Whilst still small, revenues grew by 43.9% year-on-year, as a result of our
product launch and scale up of manufacturing last year. We are excited by
Treattzest growth and foresee this continuing into H2.
Our sales into China as a territory reported modest growth of 1.9% in the
Period, and it has an encouraging outlook for H2. China remains a key
strategic growth opportunity and we are excited to open our Shanghai
Innovation Centre later this year to further enhance this growth. We are also
excited by a number of new customers and a growing pipeline in China following
investment in the local sales team.
Geographical sales
Whilst still our largest region, the US accounted for 41.4% of Group revenue
in the Period (H1 2024: 39.7%), although declined by 7.1% mainly as a result
of slower end consumer demand. Europe, including UK, represented 26.2% of
Group revenue (H1 2024: 26.9%), declined 13.5% in the Period mainly due to
lower citrus sales.
Encouragingly, China sales grew by 1.9%, with revenues now making up 7.9% of
Group revenue (H1 2024: 6.9%), we expect China to accelerate further in H2.
Rest of World sales grew by 25.8% now making up 19.7% of Group sales (H1 2024:
13.9%), with our focus on expanding our reach.
Environmental, social and corporate governance (ESG)
Sustainability remains a core driver of our long-term strategy and growth. In
H1 2025, approximately 60% of our sales and over 70% of our purchases were
derived from natural products, all sourced in alignment with our Responsible
and Sustainable Sourcing Policy to ensure transparency and support shared ESG
goals. Strengthened ESG governance continues to drive measurable progress
across People, Planet, and Performance, as reflected in our elevated EcoVadis
Silver rating this year. Our UK solar project is now fully operational and
contributes directly to our SBTi-validated target of reducing Scope 1 and 2
emissions by 42% by 2030
Financial review
Group revenue declined by 11.0% to £64.2m (H1 2024: £72.1m), and, PBTE
decreased by 52.1% to £3.6m (H1 2024: £7.6m). In constant currency terms,
revenue declined by 10.3%. Gross margin decreased by 290 bps to 24.9% during
the Period as a result of adverse product mix due to lower Premium sales and
sustained higher citrus pricing affecting buying patterns.
Pre-exceptional operating costs increased by 2.7% to £12.2m (H1 2024:
£11.9m). This was led by investment in our new regional structure to expand
both experience and reach to underpin our growth strategy. Having successfully
embedded and maintained cost disciplines aimed at increasing profitability,
and self-funding investment, we do not anticipate any significant increase in
administrative expenses in FY25 compared to FY24.
Foreign exchange impacts continue to be successfully managed through our
hedging and currency management strategy, with a net loss of £0.1m in the
Period (H1 2024: £0.1m gain) despite exchange rate fluctuations most notably
the US Dollar. Exceptional costs in the Period totalled £0.8m (H1 2024:
£0.5m), mainly related to one-off expenses in respect of restructuring costs.
Adjusted net operating margin decreased 530 bps to 6.0% (H1 2024: 11.3%), with
the decline in gross margin also further impacted by the upfront investment in
cost. Self-help measures implemented in H1 will see financial impact in H2 and
we expect to improve this margin for the full year.
Reported profit for the Period was £2.2m (H1 2024: £5.3m) with basic
adjusted earnings per share decreasing to 4.49p (H1 2024: 9.35p), and basic
earnings per share decreasing to 3.56p (H1 2024: 8.72p)
Cash flow
The Group generated a cash inflow of £2.3m in the Period (H1 2024: £0.1m
outflow) despite the reduction in profit before tax, ending the half year with
net cash of £0.9m (H1 2024: net debt £0.7m). Inclusive in this net cash
figure is a £0.8m ten-year lease liability for a new and improved
headquarters for our Chinese operations in Shanghai which was signed in
December 2024.
Net cash generated by operations was £8.4m (H1 2024: 6.9m) with the
improvement over the previous half year driven by a continued focus on working
capital management, which generated a £2.2m cash inflow in the Period. This
was achieved through strong cash collection of customer receivables, and
strict management of inventory levels, only increasing by £1.1m over the
Period, despite sustained higher commodity prices.
Capital expenditure in the Period was £2.1m (H1 2024: £1.9m) as we continue
to invest in the business. We expect further cash generation in H2.
Balance sheet
Capital expenditure has returned to normalised levels, at c.£7.0m per annum,
targeting innovative and fast-returning investment for growth. The Shanghai
Innovation Centre lease has commenced and is on track to open later this
calendar year. Having secured our operational foundation, we will now seek to
optimise our expanded global capacity to strengthen the platform from which to
deliver Treatt's ambitious growth strategy.
The Group maintains a $25m facility with Bank of America and a £25m facility
with HSBC, providing our UK and US entities with headroom to support future
investment. The UK HSBC facility term has been extended by one year into H2
2027, the US facility is due for renewal in H2 2026.
In line with our capital allocation framework, and reflecting Treatt's strong
cash performance and the Board's confidence in Treatt's strategy and
medium-term outlook, the Board announced a £5m share buyback programme on 10
April 2025 which continues.
The UK defined benefit pension scheme has been closed to both new entrants and
future accruals since October 2001. Under accounting standard IAS 19, the
scheme's funding position is currently showing a net surplus of £5.7m. The
Group agreed with the Trustees to cease deficit reduction contributions
(£0.5m p.a.) on 26 July 2024 following the results of the 1 January 2024
triennial valuation which revealed a surplus of £2.4m, and funding level of
112% on a valuation basis. The Group has now taken advantage of this improved
funding position by fully hedging the scheme's investment portfolio against
interest rate and inflationary movements.
Dividend
The Board has declared a maintained interim dividend of 2.60p per share. This
reflects a balance of the Board's assessment of the performance and
anticipated cash generation of the business and its future prospects, coupled
with the importance of dividend payments to shareholders. The interim dividend
will be payable on 14 August 2025 to shareholders on the register at close of
business on 4 July 2025.
TREATT PLC
HALF YEAR FINANCIAL STATEMENTS
CONDENSED GROUP INCOME STATEMENT
for the six months ended 31 March 2025
Six months to Six months to
31 March 2025 (unaudited) 31 March 2024 (unaudited)
Before exceptional items Exceptional items Total Before exceptional items Exceptional items Total
Notes £'000 £'000 £'000 £'000 £'000 £'000
Revenue 6 64,191 - 64,191 72,100 - 72,100
Cost of sales (48,182) - (48,182) (52,074) - (52,074)
- -
Gross profit 16,009 - 16,009 20,026 - 20,026
Administrative expenses (12,183) (758) (12,941) (11,867) (285) (12,152)
Relocation expenses 7 - - - - (180) (180)
- -
Operating profit/(loss)(1) 3,826 (758) 3,068 8,159 (465) 7,694
Finance income 104 - 104 2 - 2
Finance costs (286) - (286) (547) - (547)
Profit/(loss) before taxation 3,644 (758) 2,886 7,614 (465) 7,149
Taxation 8 (899) 190 (709) (1,912) 81 (1,831)
Profit/(loss) for the period 2,745 (568) 2,177 5,702 (384) 5,318
attributable to owners of the
Parent Company
Earnings per share attributable to equity holders of the Parent Company Adjusted(2) Statutory Adjusted(2) Statutory
Basic 10 4.49p 3.56p 9.35p 8.72p
Diluted 10 4.48p 3.55p 9.32p 8.69p
(1) Operating profit is calculated as profit before net finance costs and
taxation.
(2) All adjusted measures exclude exceptional items and the related tax
effect, details of which are given in note 7.
Notes 1 - 11 form part of these condensed half year financial statements.
CONDENSED GROUP STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 31 March 2025
Six months to Six months to
31 March 31 March
2025 2024
(unaudited) (unaudited)
£'000 £'000
Profit for the period attributable to owners of the Parent Company 2,177 5,318
Items that may be reclassified subsequently to profit or loss:
Currency translation differences on foreign currency net investments 2,489 (2,409)
Current tax on foreign currency translation differences 118 (50)
Deferred taxation on foreign currency translation differences (326) 109
Fair value movement on cash flow hedges (83) 140
Deferred tax on fair value movement 21 (35)
2,219 (2,245)
Items that will not be reclassified subsequently to profit or loss:
Actuarial gain on defined benefit pension scheme - 261
- 261
Other comprehensive income/(expense) for the period 2,219 (1,984)
Total comprehensive income for the period attributable 4,396 3,334
to owners of the Parent Company
Notes 1 - 11 form part of these condensed half year financial statements.
CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY
for the six months ended 31 March 2024 (unaudited)
Share capital Share Own shares in share trusts Hedging Foreign Retained earnings Total equity
premium account reserve exchange
reserve
£'000 £'000 £'000 £'000 £'000 £'000 £'000
1 October 2023 1,223 23,484 (2) (42) 7,463 105,120 137,246
Profit for the period - - - - - 5,318 5,318
Exchange differences - - - - (2,409) - (2,409)
Fair value movement on cash flow hedges - - - 140 - - 140
Actuarial loss on defined benefit pension scheme - - - - - 348 348
Taxation relating to items above - - - (35) 59 (87) (63)
Total comprehensive expense - - - 105 (2,350) 5,579 3,334
Transactions with owners:
Dividends - - - - - (3,335) (3,335)
Share-based payments - - - - - 293 293
Issue of new shares 1 - (1) - - - -
Movement in own shares in share trusts - - 2 - - - 2
Gain on release of shares in share trusts - - - - - 107 107
Total transactions with owners 1 - 1 - - (2,935) (2,933)
As at 31 March 2024 1,224 23,484 (1) 63 5,113 107,764 137,647
for the six months ended 31 March 2025 (unaudited)
Share capital Share Own shares in share trusts Hedging Foreign Retained earnings Total equity
premium account reserve exchange
reserve
£'000 £'000 £'000 £'000 £'000 £'000 £'000
1 October 2024 1,225 23,484 (2) 104 1,050 116,153 142,014
Profit for the period - - - - - 2,177 2,177
Exchange differences - - - - 2,489 - 2,489
Fair value movement on cash flow hedges - - - (83) - - (83)
Actuarial gain on defined benefit pension scheme - - - - - - -
Taxation relating to items above - - - 21 (208) - (187)
Total comprehensive income - - - (62) 2,281 2,177 4,396
Transactions with owners:
Dividends - - - - - (3,555) (3,555)
Share-based payments - - - - - 206 206
Issue of new shares - - - - - - -
Movement in own shares in share trusts - - 76 - - - 76
Total transactions with owners - - 76 - - (3,349) (3,273)
As at 31 March 2025 1,225 23,484 74 42 3,331 114,981 143,137
Notes 1 - 11 form part of these condensed half year financial statements.
CONDENSED GROUP BALANCE SHEET
as at 31 March 2025
As at As at
31 March 30 September
2025 2024
(unaudited) (audited)
£'000 £'000
ASSETS
Non-current assets
Intangible assets 2,452 2,534
Property, plant and equipment 70,504 69,808
Right-of-use assets 1,028 379
Post-employment benefits 5,678 5,578
79,662 78,299
Current assets
Inventories 54,109 51,878
Trade and other receivables 35,970 37,078
Current tax assets 44 430
Derivative financial instruments - 380
Cash and bank balances 2,573 1,786
92,696 91,552
Total assets 172,358 169,851
LIABILITIES
Current liabilities
Borrowings (580) (2,134)
Provisions (596) (245)
Trade and other payables (20,198) (18,695)
Lease liabilities (211) (172)
Current tax liabilities (2,162) (1,324)
Derivative financial instruments (9) -
(23,756) (22,570)
Net current assets 68,940 68,982
Non-current liabilities
Lease liabilities (833) (219)
Deferred tax liabilities (4,632) (5,048)
(5,465) (5,267)
Total liabilities (29,221) (27,837)
Net assets 143,137 142,014
( )
( )
(
)
( )
CONDENSED GROUP BALANCE SHEET (continued)
as at 31 March 2025
As at As at
31 March 30 September
2025 2024
(unaudited) (audited)
£'000 £'000
EQUITY
Share capital 1,225 1,225
Share premium account 23,484 23,484
Own shares in share trusts 74 (2)
Hedging reserve 42 104
Foreign exchange reserve 3,331 1,050
Retained earnings 114,981 116,153
Total equity attributable to owners of the Parent Company 143,137 142,014
Notes 1 - 11 form part of these condensed half year financial statements.
CONDENSED GROUP STATEMENT OF CASH FLOWS
for the six months ended 31 March 2025
Six months to Six months to
31 March 31 March
2025 2024
(unaudited) (unaudited)
£'000 £'000
Cash flow from operating activities
Profit before taxation including discontinued operations 2,886 7,149
Adjusted for:
Depreciation of property, plant and equipment 2,440 2,278
Amortisation of intangible assets 224 212
Loss on disposal of property, plant and equipment - 11
Loss on disposal of intangible assets 41 -
Net finance costs excluding post employment benefit expense 282 545
Share-based payments 200 304
Decrease/(Increase) in fair value of derivatives 306 (1)
Post-employment benefit income (100) -
Employer contributions to defined benefit pension scheme - (225)
Operating cash flow before movements in working capital 6,279 10,273
Movements in working capital:
(Increase)/decrease in inventories (1,121) 206
Decrease/(increase) in receivables 1,692 (4,882)
Increase in payables 1,599 1,308
Cash generated from operations 8,449 6,905
Taxation paid (160) (1,117)
Net cash from operating activities 8,289 5,788
Cash flow from investing activities
Proceeds on disposal of property, plant and equipment - 4
Purchase of property, plant and equipment (1,925) (1,804)
Purchase of intangible assets (170) (134)
Interest received 5 2
Net cash used in investing activities (2,090) (1,932)
CONDENSED GROUP STATEMENT OF CASH FLOWS (continued)
for the six months ended 31 March 2025
Six months to Six months to
31 March 31 March
2025 2024
(unaudited) (unaudited)
£'000 £'000
Cash flow from financing activities
Proceeds from bank borrowings 228 1,078
Repayment of bank borrowings (1,877) -
Interest paid (274) (539)
Repayment of lease liabilities (109) (114)
Dividends paid (3,555) (3,335)
Proceeds on issue of shares - 2
Sale of own shares by share trusts 76 107
Net cash used in financing activities (5,511) (2,801)
Net increase in cash and cash equivalents 688 1,055
Effect of foreign exchange rates 99 (64)
Movement in cash and cash equivalents in the period 787 991
Cash and cash equivalents at beginning of period 1,786 809
Cash and cash equivalents at end of period 2,573 1,800
Cash and cash equivalents comprise:
Cash and bank balances 2,573 1,800
2,573 1,800
Notes 1 - 11 form part of these condensed half year financial statements.
CONDENSED GROUP RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET CASH/DEBT
for the six months ended 31 March 2025
Six months to Six months to
31 March 31 March
2025 2024
(unaudited) (unaudited)
£'000 £'000
Movement in cash and cash equivalents in the period 787 991
Repayment of bank borrowings 1,877 -
Proceeds from bank borrowings (228) (1,078)
(Increase)/decrease in lease liabilities (653) 107
Cash inflow from changes in net cash in the period 1,783 20
Effect of foreign exchange rates (95) 17
Movement in net cash in the period 1,688 37
Net debt at beginning of period (739) (10,382)
Net cash/(debt) at end of period 949 (10,345)
Notes 1 - 11 form part of these condensed half year financial statements.
Responsibility statement
We confirm that to the best of our knowledge:
(a) the condensed set of financial statements for the six months ended 31
March 2025 has been prepared in accordance with IAS 34
(b) the half year report and condensed financial statements includes a fair
review of the information required by DTR 4.2.7R (indication of important
events during the first six months and description of principal risks and
uncertainties for the remaining six months of the year)
(c) the half year report and condensed financial statements includes a fair
review of the information required by DTR 4.2.8R (disclosure of related party
transactions and changes therein).
By order of the Board
DAVID SHANNON
Chief Executive Officer
13 May 2025
RYAN GOVENDER
Chief Financial Officer
13 May 2025
NOTES TO THE UNAUDITED CONDENSED HALF YEAR FINANCIAL STATEMENTS
1. Basis of preparation
The Group has prepared its condensed half year financial statements in
accordance with the Disclosure Guidance and Transparency Rules of the
Financial Conduct Authority and the reporting requirements of IAS 34, 'Interim
Financial Reporting'.
The information relating to the six months ended 31 March 2025 and 31 March
2024 is unaudited and does not constitute statutory accounts. The statutory
accounts for the year ended 30 September 2024 have been reported on by the
Group's auditors and delivered to the Registrar of Companies. The report of
the auditors was unqualified, did not include a reference to any matters to
which the auditors drew attention by way of emphasis without qualifying their
report and did not contain a statement under section 498 of the Companies Act
2006. These condensed half year financial statements for the six months ended
31 March 2025 have neither been audited nor formally reviewed by the Group's
auditors.
2. Accounting policies
These condensed half year financial statements have been prepared on the basis
of the same accounting policies and methods of computation as set out in the
Group's 30 September 2024 annual report.
There were no new standards, or amendments to standards, which are mandatory
and relevant to the Group for the first time for the financial year ending 30
September 2025 which have had a material effect on these condensed half year
financial statements.
3. Accounting estimates
The preparation of the condensed half year financial statements requires
management to make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets and
liabilities, income and expenses. In preparing these condensed half year
financial statements, the significant judgements made by management in
applying the Group's accounting policies and the key sources of estimation
uncertainty were the same as those applied to the audited consolidated
financial statements as at, and for the year ended, 30 September 2024.
4. Going concern
As at the date of this report, the Directors have a reasonable expectation
that the Group has adequate resources to continue in business for the
foreseeable future. Accordingly, the condensed half year financial statements
have been prepared on the going concern basis.
5. Risks and uncertainties
The Group's operations involve a series of risks and uncertainties across a
range of strategic, commercial, operational and financial areas and a process
is in place to identify and assess their potential impact on the Group's
business, which is regularly updated. The principal risks and uncertainties
for the remainder of the financial year are not expected to change materially
from those included on pages 52 - 57 of the 2024 Annual Report and Financial
Statements.
NOTES TO THE UNAUDITED HALF YEAR FINANCIAL STATEMENTS (continued)
6. Segmental information
Business segments
IFRS 8 requires operating segments to be identified on the basis of internal
financial information reported to the Chief Operating Decision Maker (CODM).
The Group's CODM has been identified as the Board of Directors who are
primarily responsible for the allocation of resources to the segments and for
assessing their performance. The disclosure in the Group accounts of segmental
information is consistent with the information used by the CODM in order to
assess profit performance from the Group's operations. The Group operates one
global business segment engaging in the manufacture and supply of innovative
ingredient solutions for the beverage, flavour, fragrance and consumer product
industries with manufacturing sites in the UK and the US.
Geographical segments
The following table provides an analysis of the Group's revenue by
geographical market for continuing operations.
Year-on-year
Six months to Six months to growth
31 March 31 March Year-on-year - constant
2025 2024 growth currency
(unaudited) (unaudited) (unaudited) (unaudited)
Revenue by destination £'000 £'000 % %
United Kingdom 3,402 3,938 -13.6% -13.6%
Rest of Europe - Germany 3,567 2,316 54.0% 54.0%
- Ireland 2,121 6,738 -68.5% -68.5%
- Other 7,711 6,425 20.0% 20.2%
The Americas - USA 26,575 28,604 -7.1% -5.8%
- Other 3,114 9,063 -65.6% -65.4%
Rest of the World - China 5,060 4,970 1.8% 2.3%
- Other 12,641 10,046 25.8% 26.1%
64,191 72,100 -11.0% -10.3%
NOTES TO THE UNAUDITED HALF YEAR FINANCIAL STATEMENTS (continued)
7. Exceptional items
The exceptional items referred to in the income statement can be categorised
as follows:
Six months to Six months to
31 March 31 March
2025 2024
(unaudited) (unaudited)
£'000 £'000
Restructuring and other expenses (758) (285)
Relocation expenses - (180)
Less: tax effect of expenses 190 81
(568) (384)
The exceptional items all relate to non-recurring items.
Restructuring costs mainly comprise contractual employment and termination
payments in respect of changes to a regional operating and leadership
structure, which became effective 1 January 2025. Amounts contractually due
under employees' existing terms and conditions are considered to be fully
allowable for tax purposes.
Relocation expenses relate to one-off costs incurred in connection with the
relocation of the Group's UK operations that do not fall to be capitalised.
These costs were associated with the final stages of the manufacturing fit-out
of the Skyliner Way premises.
8. Taxation
The effective tax rate for the six months ended 31 March 2025 has been
estimated at 25.0% (H1 2024: 25.0%).
9. Dividends
Equity dividends on ordinary shares
Six months to Six months to
31 March 31 March
2025 2024
(unaudited) (unaudited)
£'000 £'000
Final dividend for the year ended 30 September 2024 of 5.81p per share 3,555 3,335
(2023: 5.46p per share)
NOTES TO THE UNAUDITED HALF YEAR FINANCIAL STATEMENTS (continued)
10. Earnings per share
Basic earnings per share
Basic earnings per share is based on the weighted average number of ordinary
shares in issue and ranking for dividend during the year. The weighted average
number of shares excludes shares held by the Treatt Employee Benefit Trust
(EBT), together with shares held in respect of the Treatt Share Incentive Plan
(SIP) which do not rank for dividend.
Six months to Six months to
31 March 2025 31 March 2024
(unaudited) (unaudited)
Profit after taxation attributable to owners of the Parent Company (£'000) 2,177 5,318
Weighted average number of ordinary shares in issue (No: '000) 61,154 60,987
Basic earnings per share (pence) 3.56p 8.72p
Diluted earnings per share
Diluted earnings per share is based on the weighted average number of ordinary
shares in issue and ranking for dividend during the year, adjusted for the
effect of all dilutive potential ordinary shares. The number of shares used to
calculate earnings per share (EPS) have been derived as follows:
Six months to Six months to
31 March 2025 31 March 2024
(unaudited) (unaudited)
No ('000) No ('000)
Weighted average number of shares 61,274 61,210
Weighted average number of shares held in the EBT and SIP (120) (223)
Weighted average number of shares for calculating basic EPS 61,154 60,987
Executive share option schemes 111 173
All-employee share options 11 8
Weighted average number of shares for calculating diluted EPS 61,276 61,168
Diluted earnings per share (pence) 3.55p 8.69p
Adjusted earnings per share
Adjusted earnings per share measures are calculated based on profits for the
year attributable to owners of the Parent Company before exceptional items as
follows:
Six months to Six months to
31 March 2025 31 March 2024
(unaudited) (unaudited)
£'000 £'000
Profit after taxation attributable to owners of the Parent Company 2,177 5,318
Adjusted for exceptional items (see note 7):
- Restructuring expenses 709 758 285
- Relocation expenses - 180
- Taxation thereon (190) (81)
Adjusted earnings from continuing operations 2,745 5,702
Adjusted basic earnings per share (pence) 4.49p 9.35p
Adjusted diluted earnings per share (pence) 4.48p 9.32p
758
285
- Relocation expenses
-
180
- Taxation thereon
(190)
(81)
Adjusted earnings from continuing operations
2,745
5,702
Adjusted basic earnings per share (pence)
4.49p
9.35p
Adjusted diluted earnings per share (pence)
4.48p
9.32p
NOTES TO THE UNAUDITED HALF YEAR FINANCIAL STATEMENTS (continued)
( )
11. Capital commitments
The Group has entered into material contracts in connection with the UK
relocation project totaling £488,000 (H1 2024: £1,650,000), with a further
£234,000 (H1 2024: £225,000) and £364,000 (H1 2024: £594,000) committed to
capital projects in the UK and US respectively, all of which were unprovided
for at the period end.
CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING STATEMENTS
This announcement contains forward-looking statements that are subject to risk
factors associated with, among other things, the economic and business
circumstances occurring from time to time in the countries, sectors and
markets in which the Group operates. It is believed that the expectations
reflected in these statements are reasonable, but they may be affected by a
wide range of variables which could cause actual results to differ materially
from those currently anticipated. No assurances can be given that the
forward-looking statements in this announcement will be realised. The
forward-looking statements reflect the knowledge and information available at
the date of preparation of this announcement and the Group undertakes no
obligation to update these forward-looking statements. Nothing in this
announcement should be construed as a profit forecast.
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