REG - Treatt PLC - Full Year Results
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RNS Number : 5843P Treatt PLC 20 January 2026
TREATT PLC
("Treatt" or "the Group")
FULL YEAR RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2025
Operational progress in a challenging year; well-positioned for the future
Treatt, the manufacturer and supplier of a diverse and sustainable portfolio
of natural extracts and ingredients for the beverage, flavour and fragrance
industries, announces today its audited results for the financial year ended
30 September 2025.
Financial year ended 30 September
2025 2024 (restated*) Change
Revenue £132.5m £150.2m (11.8)%
Gross profit margin 25.9% 29.3% (340)bps
Adjusted EBITDA(1,2) £16.2m £24.4m (33.6)%
Profit before tax and exceptional items £10.3m £18.5m (44.4)%
Profit before tax £7.0m £17.9m (60.9)%
Adjusted basic earnings per share(2) 13.40p 23.58p (43.2)%
Basic earnings per share 8.38p 22.71p (63.1)%
Total dividend per share 5.60p 8.41p (33.4)%
Net debt £5.9m £0.7m £(5.2)m
Adjusted net operating margin(2) 8.1 % 12.9% (480)bps
Adjusted return on average capital employed(2,3) 7.5% 13.3% (580)bps
1 EBITDA is calculated as operating profit plus depreciation and amortisation.
2 Adjusted measures exclude exceptional items and the related tax effect.
3 Return on average capital employed is calculated by dividing operating
profit (as shown in the Group income statement) by the average capital
employed in the business, which is calculated as total equity (as shown in the
Group balance sheet) plus net debt (as shown in the Group reconciliation of
net cash flow to movement in net debt), averaged over the opening, interim and
closing amounts. The adjusted measure excludes exceptional items.
* As explained further in note 12 of these financial statements, revenue, cost
of sales and all profit-related metrics for the year ended 30 September 2024
have been restated.
FINANCIAL HIGHLIGHTS:
· Revenue and profit in line with revised expectations as set out
in July 2025
· Revenue of £132.5m (FY24*: £150.2m), reflecting the impact of
continuing external headwinds including sustained high citrus prices and
ongoing softness in US consumer confidence
· Profit before tax and exceptional items declined to £10.3m
(FY24*: £18.5m), primarily from prolonged challenging market conditions
· Year-end net debt increased to £5.9m (FY24: £0.7m), reflecting
the £5.0m share buyback programme which completed in May 2025, demonstrating
continued robust cash generation and discipline
· Final dividend of 3.00p per share, resulting in a total dividend
of 5.60p per share consistent with our stated policy
OPERATIONAL HIGHLIGHTS:
· Important win in our sugar reduction offering, representing a
significant move into a high value category
· Strategic progress made with the expansion of European sales
teams in Germany and France, expanding the Group's reach in the region
· Strong financial discipline: focus on cost controls to mitigate
the impact of difficult trading conditions and on operational efficiency,
while continuing to invest in product innovation and sales teams
POST YEAR END PROGRESS AND OUTLOOK:
· Commercial progress and growth in Asia (ex. China): South-East
Asia distribution agreement signed with IMCD in December 2025, expanding
Treatt's presence in the region
· Launch of commercial and innovation facility in Shanghai, China,
in December 2025
· As announced separately today, the Company has entered into a
Relationship Agreement with Döhler Finance Management B.V. and appointed
Helga Moelschl as a non-Independent Non-executive Director, with effect from 1
February 2026
· FY26 performance to date in line with the Board's expectations
Manprit Randhawa, Interim Group Managing Director, commented:
"It has been a challenging year for Treatt, exacerbated by weak market
conditions and soft consumer demand in the US, tariff uncertainty and
sustained high citrus prices.
"Treatt has made good strategic progress and delivered revenue and profit in
line with our revised guidance set out in the Group's trading update in July
despite the considerable headwinds faced during the year. This was achieved
through a sharp focus on costs, particularly in the second half of the year to
mitigate impact on demand. We achieved this while continuing to invest in
innovation and sales teams across the business. We are really pleased with a
number of overseas initiatives during the year: the launch of our new Shanghai
innovation centre in China, and expanding our sales teams in France and
Germany.
"Treatt is looking to the future with optimism after a period of turbulence.
We have considerable strengths to build on, including our exceptionally
talented people, state-of-the-art facilities with significant capacity for
growth, and expertise built over 140 years. These, together with the Group's
excellent industry reputation, underpin the Board's confidence for the
future."
Analyst and investor conference call
A pre-recorded presentation of the FY results is available to view on the
company's investor relations site:
https://www.treatt.com/investor-relations/financial-results-presentations/webcasts
For further information, please contact MHP at treatt@mhpgroup.com.
ENQUIRIES
Treatt PLC +44 (0)1284
702500
Manprit Randhawa Interim Group Managing Director
and Interim Chief Financial Officer
Kelly Gordon Group
Finance Director
Joint Broker
Investec Bank plc +44 (0)20 7597
5970
David Anderson
Joint Broker
Peel Hunt Plc +44 (0)20
7418 8900
George Sellar
Financial PR
MHP
+44 (0)7885 447 944
Tim Rowntree
treatt@mhpgroup.com
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 in the region of 350 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___.bXQtcHJvZC1jcC1ldXcyLTE6bmV4dDE1OmM6bzo0YTUwYjc1ZGVhNTZhNjIxZjM1MTljMjkxZmY0MzA0NDo2OjM5MGM6MzBkMzAyNjM0NGVkNzYxZWM1YjNkMjBkMTdkMmE1NTZhZDYzMmI3MWZjNDA3NmZkNjRmYTE2OGZhNTY2YjUxNTpwOkY6Tg)
.
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.
Chair's Statement
CHALLENGING YEAR
LOOKING AHEAD WITH OPTIMISM
DISAPPOINTING FINANCIAL PERFORMANCE
It has been a challenging year for the business, and we recognise that the
decline in revenue of 11.8% from £150.2m to £132.5m and the resulting
reduction in profit before tax and exceptional items of 44.4% from £18.5m to
£10.3m is disappointing for our stakeholders.
However, we are focused on the future, and the disproportionate impact of
revenue decreases on profits illustrates the operational gearing opportunity
for Treatt. We have well-invested manufacturing sites in the UK and the US, as
well as a new Commercial and Innovation Centre recently opened in China. Our
strategy is to grow revenues in all our territories and, utilising our
capacity more fully, we are confident that we can grow profits
disproportionately. This is the key focus for the Board and management team.
LAPSED BID FOR TREATT AND CHANGES TO SHAREHOLDER REGISTER
It was unsurprising that a takeover bid was received during the year, given
Treatt's share price and strong market reputation. The bid from Natara Global
Limited, backed by funds advised by Exponent Private Equity, lapsed in
November 2025 due to insufficient shareholder votes in support, following the
accumulation of 28% of the Company's issued share capital by Döhler Group SE.
Döhler is a successful privately owned company headquartered in Germany. It
is an important Treatt customer as well as a significant and respected
industry player. As such, while the Board and management remains deeply
mindful of potential conflicts of interest and will protect the interests of
all our shareholders and customers, we are exploring how we can optimise the
benefits of having a supportive shareholder with extensive knowledge of our
industry and who can help accelerate Treatt's growth, provided any dealings
with Döhler are on normal commercial terms and at arm's length.
The bid from Natara contributed to significant changes in our shareholder
register, with Döhler becoming a significant shareholder. Given Döhler's
shareholding, the Board determined that it would be in the Company's best
interest to enter into a relationship agreement with Döhler which grants
Döhler the right to appoint one director to the Board. In addition, in line
with the Board's core duty to act in the interests of all shareholders, this
agreement also ensures that any dealings between Treatt and Döhler must be at
arm's length and governs other aspects including the protection of
confidential information.
OUR RESILIENT PEOPLE
I feel humbled by the resilience and commitment shown by Treatt's people
despite the challenging and very public events of the past year. Our people
are what makes Treatt special. They have continued to develop high-quality
products and deliver great service to meet fast-changing customer demands. On
behalf of all our stakeholders, I extend my sincerest thanks to all of our
people for their ongoing efforts.
BOARD AND LEADERSHIP CHANGES
Ryan Govender, stepped down as CFO on 30 September 2025 to pursue an
opportunity outside our industry. On behalf of all involved with Treatt, I
would once again like to thank Ryan for his important contribution and service
to the business since 2022 when he joined Treatt and wish him well for the
future.
David Shannon, stepped down as CEO on 31 December 2025. On behalf of the Board
and Group, I would also like to thank David for his service to Treatt since
joining in 2024 and wish him well for the future.
In September, we appointed Manprit Randhawa as interim CFO, with the decision
to appoint a successor to Ryan on an interim basis driven by corporate
activity and associated uncertainty at the time. Manprit has experience
working with innovation-driven listed companies, and I am delighted with the
strong contribution he has made to our Leadership Team. As announced in
December 2025, Manprit was appointed to the Board as Interim Group Managing
Director and Interim CFO from 1 January 2026. We look forward to working with
Manprit in the months ahead whilst we proceed with the search process to
appoint a permanent CEO and CFO.
Bronagh Kennedy, our Remuneration Committee Chair confirmed her intention to
step down from the Board on 31 January 2026, as did Philip O'Connor, Audit
Committee Chair and Senior Independent Director with effect from on 28
February 2026. On behalf of all involved with Treatt, I thank Bronagh and
Philip for their contribution and service to Treatt and wish them both well
for the future.
The Board has commenced appropriate search processes to replace Directors who
have recently or are due to step down from the Board in the near term. As part
of this process, it will be ensured that the composition of the Board has an
appropriate balance of skills and experience to replace the departing
Non-executive Directors experience and skills as appropriate, and to meet the
Company's ongoing requirements.
In the meantime, I am pleased to welcome Helga Moelschl who will be joining
the Board on 1 February 2026 as a non-Independent Non-executive Director.
Helga was nominated by Döhler pursuant to the relationship agreement recently
entered into between the Company and Döhler. Helga brings significant
commercial experience of our industry from her time with IFF and Givaudan.
For further information on Board changes please see the Corporate Governance
Statement.
DEFINED BENEFIT PENSION SCHEME
As previously reported, we have been working collaboratively with the pension
scheme trustees to secure the scheme's long-term position. I am pleased that
the trustees recently entered into an insurance "buy-in" agreement to secure
members' benefits with Just, a leading pensions insurer. This provides members
with enhanced security for their pensions. No further contributions are being
made by Treatt to the scheme as it is fully funded and benefits are now to be
paid from the Just insurance policy. I would like to thank the scheme trustees
for their positive engagement in this exercise.
DIVIDEND
The Directors propose a final dividend of 3.00p per share (2024: 5.81p), which
represents a decrease in the total dividend for the year of 33.4% to 5.60p
(2024: 8.41p). If approved by shareholders at the Annual General Meeting, the
final dividend will be payable on 13 May 2026 to all shareholders on the
register at the close of business on 7 April 2026. This proposed total
dividend reflects the level of profit and earnings per share for FY25 and
maintains reasonable dividend cover. In accordance with our progressive
dividend policy, we will seek to increase future dividends as profits recover,
whilst being mindful of our longer-term aim to grow dividend cover back to
around three times.
LOOKING AHEAD
Despite a challenging year, Treatt has many strengths to build upon and to
restore its performance, including know-how built over nearly 140 years, a
strong brand with a reputation for quality products in both FMCG and flavour
house markets, a strong balance sheet with minimal debt, and modern facilities
with the capacity for growth and readiness to take advantage of global
changing markets, together with the technical capability, experience and
commitment of our people. There are therefore ample grounds for the Board to
be optimistic about Treatt's future prospects.
Vijay Thakrar
Chair
19 January 2026
Financial Review
A CHALLENGING YEAR
OVERVIEW(1)
2025 was a challenging year, with weaker US market conditions, driven by
consumer demand and tariff uncertainty, coupled with citrus market headwinds
impacting our headline financial performance. Despite these challenges, we
delivered sales of £132.5m and profit before tax and exceptional items of
£10.3m, within our revised guidance range of sales of £130.0m - £135.0m and
profit of £9.0m - £11.0m.
As outlined in our summer trading update, second-half revenue in FY25 came in
at £68.3m (2024: £78.1m), driven by slower pipeline conversion, despite the
pipeline increasing year-on-year.
Due to the prolonged weak market conditions outlined above, the Group
implemented a deeper cost-focus in the second half of the year to mitigate the
impact of weaker demand whilst ensuring the Group continues to innovate its
product offering. This cost management has continued post year-end with a
focus on driving operational efficiencies.
The Group delivered pre-exceptional operating profit £10.7m (2024:£19.3m),
profitability was impacted by two main factors, sustained high citrus prices
affecting buying patterns and slower US consumer demand affecting our premium
segment. The impact of these key headwinds was partially offset by cost
action.
Year-end net debt was £5.9m (2024: £0.7m) reflecting the £5.0m share
buy-back programme which completed in May 2025. We remain focused on becoming
sustainability cash generative.
With a strong and growing pipeline and a focus on innovating for our existing
and prospective customers, as well as a softening of the headwinds we
encountered in 2025, we continue to execute on our strategy in order to return
to sustainable revenue and profit growth.
1 As explained further in note 12 of these financial statements, revenue, cost
of sales and all profit-related metrics for the year ended 30 September 2024
have been restated, and all comparisons are to the restated figures.
INCOME STATEMENT
REVENUE
Revenue for the year declined by 11.8% to £132.5m (2024: £150.2m).
2024
Categories % share of sales 2025 (restated(1))
Citrus 55% 55%
Herbs, spices & florals 6% 5%
Synthetic aroma 15% 15%
Tea 6% 7%
Health & wellness 9% 8%
Fruit & vegetables 8% 9%
Coffee 1% 1%
Revenue in our heritage segment, which includes citrus (excluding China and
Treattzest), herbs, spices & florals and synthetic aroma declined by 10.6%
with revenue of £90.8m (2024: £101.6m). Citrus represents 55% of total
revenue, and continues to be a core focus for Treatt. Citrus revenues declined
by 11.2% (£8.1m), year-on-year, driven by reduced volumes as sustained high
citrus prices led to changes in buying patterns, as well as a reduction
year-on-year in one strategic account, with lower volumes demanded versus the
prior year due to competitive pressures, this still remains a strategic
account. Synthetic aroma declined by 10.7% year-on-year driven by lower market
prices, overall volumes were flat.
Premium, which includes tea, health & wellness and fruit & vegetables,
declined by 13.3% from the prior year with revenue of £30.0m (2024: £34.6m).
An exciting win in sugar reduction, which remains an attractive area for
Treatt, meant health & wellness revenue grew, however this was more than
offset with declines in fruit & vegetables and tea, as US consumer demand
softened due to political uncertainty. Innovation, including through
collaboration with our customers, remains a key focus to support conversion of
our pipeline of opportunities in this segment.
New markets, which include China, Treattzest citrus, and coffee declined by
16.9% with revenue of £11.7m (2024: £14.1m). China sales were also impacted
by sustained high prices in citrus and declined by 16.8% led by the change in
buying patterns as well as competitive pressures.
Coffee, which is still a nascent category for Treatt, declined with lower
volumes in ready-to-drink cold brew coffee in North America. We remain
confident in our coffee products and have a healthy and growing pipeline.
2024
Geographical % share of sales 2025 (restated(1))
UK 5% 5%
Germany 5% 3%
Ireland 7% 11%
Rest of Europe 12% 10%
USA 40% 38%
Rest of the Americas 6% 10%
China 7% 8%
Rest of the world 18% 15%
Revenue in the Group's largest market, the USA, declined by 7.8% to £53.0m
(2024: £57.4m) representing 40.0% of the Group total (2024: 38.2%). This
reflects the decline and slowdown in end consumer demand, as well as lower
coffee volumes.
In the UK, revenues decreased to £7.0m (2024: £8.1m). Sales to Europe, which
represented 23.9% of Group revenue (2024: 23.7%), reported total sales of
£31.7m (2024: £35.5m), with many of the citrus-affected customers being in
this area.
China was also affected by buying patterns in citrus in H2 as sustained high
prices continued, with reported revenue to the country decreasing by 16.8% to
£9.6m (2024: £11.5m). We continue to be optimistic about the commercial
opportunities in this market with a large proportion of growth coming from new
business wins, particularly in local FMCG beverage customers in China.
Sales to the rest of the world (excluding China) grew by 3.0%, to £23.9m
(2024: £23.2m), reflecting growth in Asia (excluding China) which is
increasingly important as we continue to expand our global reach.
PROFIT
Gross profit margin was 25.9% declining by 340 basis points (2024: 29.3%). The
movement was mainly led by a margin squeeze due to sustained high citrus
prices.
Administrative expenses (excluding exceptional items) reduced by 4.1% in the
year to £23.6m (2024: £24.6m) despite inflationary pressures, with strong
cost discipline and other self-help measures embedded. We have undergone a
regional restructure in the year, with total headcount as at the end of the
year reducing from 379 to 353.
Operating profit (excluding exceptional items) decreased by 44.8% to £10.7m
(2024: £19.3m) and statutory operating profit decreased to £7.4m (2024:
£18.7m).
Adjusted net operating margin, which is defined as operating profit before
exceptional items, divided by revenue, decreased in the year to 8.1% (2024:
12.9%), impacted significantly by the reduction in sales and gross margin,
despite the cost-saving self-help measures. Statutory net operating margin
significantly decreased in the year to 5.6% (2024: 12.4%). Our medium-term
target for adjusted net operating margin remains at 15%.
Adjusted return on average capital employed (ROACE) decreased by 580 basis
points to 7.5% (2024: 13.3%) due to the decrease in operating profits during
the year, however we did maintain good working capital disciplines. Statutory
return on average capital employed decreased to 4.9% (2024: 12.3%) over the
year. As well as growth in adjusted basic earnings per share, ROACE is
included as a performance metric for LTIPs.
Exceptional items (see note 8 to the financial statements) increased in the
year to £3.3m (2024: £0.6m). These were primarily made up of transaction
fees in relation to the proposed acquisition of Treatt by Natara Global
Limited, and also included restructuring and other costs.
Adjusted earnings before interest, tax, depreciation and amortisation
(adjusted EBITDA) for the year decreased by 33.7% to £16.2m (2024: £24.4m),
whereas statutory EBITDA reported a 45.9% decrease to £12.9m (2024: £23.8m).
Profit before tax and exceptional items from continuing operations declined by
44.4% to £10.3m (2024: £18.5m). Reported profit after tax for the year of
£5.1m represents a decrease of 63.5% on the prior year.
FOREIGN EXCHANGE GAINS AND LOSSES
The Group's functional currency is the British Pound (Sterling) but the
majority of the Group's business is transacted in other currencies which
creates a foreign exchange exposure, particularly in the US Dollar and, to a
lesser extent, the Euro.
During the year Sterling devalued sharply against the US Dollar in Q1 before
strengthening again over the remainder of the year, ending the year at £1 =
$1.34 (2024: $1.34); the average Sterling/US Dollar exchange rate for the year
was 3.1% weaker compared with the prior year at £1 = $1.31 (2024: $1.27).
The overall impact in 2025 of the transactional foreign exchange gains and
losses in the UK operations was a total gain of £0.5m (2024: £0.1m gain).
This comprised £0.5m (2024: £0.7m gain) of transactional FX gains, mitigated
by the recognition of £nil (2024: £0.8m gain) on FX contracts. The overall
foreign exchange gain in the year is as a result of carefully timed
transacting of foreign exchange contracts which allowed us to match movements
in transactional FX in most months, but exit the contracts at some favourable
positions, yielding a small overall gain. This successful mitigation of the
risk is the result of continued implementation of the principles of the
Group's FX risk management policy (see note 29 of the financial statements).
FINANCE COSTS
The Group's finance costs were £0.6m (2024: £1.0m). Interest rates slightly
eased in the year helping to offset the increase in net debt in the year. The
decrease in overall finance costs was due to maintaining a lower average net
debt than in the prior year.
Included in net finance costs are fixed facility fees for maintaining
facilities for future use. Group interest cover for the year before
exceptional items increased to 30.1 times (2024: 24.9 times); this is well
above the covenant of 1.5 times.
GROUP TAX CHARGE
After providing for deferred tax, the Group tax charge decreased by £2.2m to
£1.9m (2024: £4.1m); an effective tax rate (after exceptional items) of
27.7% (2024: 22.7%), driven by non-allowability of some of the acquisition
expenses in exceptionals.
EARNINGS PER SHARE
Basic earnings per share decreased by 63.1% to 8.38p (2024: 22.71p). Adjusted
basic earnings per share for the year decreased by 43.2% to 13.40p (2024:
23.58p). The calculation of earnings per share excludes those shares which are
held by the Treatt Employee Benefit Trust (EBT), which are not beneficially
owned by employees since they do not rank for dividend and are based upon
profit after tax.
DIVIDENDS
The proposed final dividend decreased by 48.4% to 3.00p per share (2024:
5.81p). The total dividend per share therefore decreased by 33.4% to 5.60p
(2024: 8.41p), representing dividend cover of 1.5 times earnings for the year.
The Board considers this to be appropriate at this stage, balancing a
challenging year and shareholder expectations, whilst still working towards
our historical level of dividend cover of three times earnings (before
exceptional items this dividend would provide cover of approximately 2.4
times).
BALANCE SHEET
Shareholders' funds declined in the year to £134.7m (2024: £141.1m), with
net assets per share declining to £2.20 (2024: £2.31). The Board has chosen
not to avail itself of the option under IFRS to revalue land and buildings
annually and, therefore, all the Group's land and buildings are held at
historical cost, net of depreciation, on the balance sheet.
Inventory held at the year-end was £62.5m (2024: £54.9m), an increase of
£7.6m. This increase was predominantly driven by the increase in citrus
prices, as well as reduced sales volumes. One factor in the success of the
business is our management of risks, such as geographic, political and
climatic, to ensure continuity of supply for our customers. Consequently, the
overall level of inventory held by the Group is highly significant in cash
terms.
NET DEBT AND CASH FLOW
At the year-end date the Group's net debt position was £5.9m (2024: £0.7m)
including leases of £0.9m (2024: £0.4m), with available unused facilities of
£38.9m (2024: £43.3m). The increase in net debt was driven largely by
considerably weaker trading performance in the second half of the year
compared with expectations, which was disappointing after we achieved a net
cash position at the end of H1. We also completed a share buyback in the
second half of the year of £5.0m. Full year cash generated from operating
activities fell to £11.3m (2024: £21.1m), driven by the fall in
profitability. The Group's investing and financing activities included capital
expenditure of £5.0m (2024: £5.7m), share buyback of £5.0m and dividend of
£5.1m (2024: £4.9m). The net cash outflow for the year was £4.4m (2024:
£9.6m inflow) when excluding the net drawdown (2024: net repayment) of bank
facilities and payments against lease liabilities.
The Group remains focused on cash generation and maintaining disciplines in
this area, with the goal to reach a sustainable net cash position whilst
meeting our investment needs and mitigating against higher interest costs.
The Group retains a mix of secured and unsecured borrowing facilities, which
now total £43.9m (2024: £43.7m) across the UK and the US. In the UK, the
Group has a £25.0m asset-based lending facility with HSBC with an optional
accordion (pre-approved facility) of £10.0m. This facility has been extended
for a year and is now due to renew in June 2027. This facility lends against
the value and quality of inventory and receivables within the UK business and
strengthens the ability of the Group to borrow in the UK. The option to
exercise the optional accordion of £10.0m expires on 13 December 2026.
The US business has a $25.0m revolving credit facility with Bank of America.
We have obtained credit approval for, and expect to shortly conclude on, a
one-year extension of this facility to July 2027. The facility has an optional
accordion of $10.0m, exercisable at any time.
The Group continues to enjoy positive relationships with its banks and expects
all facilities to be renewed or refinanced successfully when they fall due.
Working capital remains well maintained, with a net inflow of £0.6m (2024:
£1.2m). The Group remains focused on working capital efficiency, but there is
some work to be done particularly around reversing the increase in
inventories.
CAPITAL INVESTMENT PROGRAMME
Group capital expenditure was £5.2m (2024: £5.7m), of which £2.1m was
invested at the Group's US site, £2.9m was invested in the UK and the
remainder relating to our new China Commercial and Innovation Centre. Capital
expenditure has been largely on efficiency upgrades, process improvement, and
improvements to existing equipment. In the UK, £1.5m was spent on new
manufacturing capabilities.
The investment in the new Shanghai Commercial and Innovation Centre is
designed to accelerate innovation and customer collaboration in China. Capital
spend to date is £0.3m, comprising mainly fixtures and fittings and
equipment, with a further £0.7m additions classified as leases. The estimated
remaining capital spend is £0.3m, and relates to further equipment and is
expected to be completed by March 2026.
TREATT EMPLOYEE BENEFIT TRUST AND TREATT SIP TRUST
The Group has an HMRC-approved Share Incentive Plan (SIP) for its UK
employees, and as far as practicable, also offers a similar scheme to its US
employees. All UK employees with a year's service were awarded £700 (2023:
£700) of "Free Shares" in December 2024 as part of the Group's employee
incentive and engagement programme. The Board is firmly of the view that
increased employee share ownership is an important tool for driving positive
employee engagement in the business.
A similar scheme exists for US employees who were awarded $1,000 (2023:
$1,000) of Restricted Stock Units in December 2024. These shares are forfeited
by employees who leave within three years from the date of grant.
Under the SIP, UK employees are offered the opportunity each year to purchase
up to £1,800 (or 10.0% of salary, whichever is lower) of Treatt shares out of
gross income, which the Group continues to match on a one and a half for one
basis. In December 2024 a total of 25,000 (2023: 32,000) matching shares were
granted.
At year-end the SIP held 340,000 shares (2024: 361,000) and is administered by
MUFG Corporate Markets Trustees. All shares are allocated to participants
under the SIP. It is anticipated that going forward the obligations under the
SIP will be satisfied by using treasury shares.
In addition, the Group continued its annual programme of offering share option
saving schemes to employees in the UK and US. Under US tax legislation,
employees at Treatt USA are able to exercise options annually, whilst the UK
schemes provide for three-year saving plans.
Under the Long-Term Incentive Plan, which was approved by shareholders at the
2025 Annual General Meeting, Executive Directors and certain key employees
were granted 329,000 (2024: 263,000) nil cost share options during the year
which will vest after three years on a sliding scale, subject to performance
conditions. In total, options were granted over 530,000 (2024: 432,000) shares
during the year, whilst 74,000 (2024: 37,000) were exercised from options
awarded in prior years which have now vested.
At year-end the EBT held 19,000 shares (2024: 97,000) in order to satisfy
future option schemes. It is anticipated in the short term that all-employee
savings-related share schemes will be satisfied by treasury being issued to
the EBT.
FINAL SALARY PENSION SCHEME
The R.C. Treatt final salary pension scheme (the "scheme") has not been
subject to any further accruals since 31 December 2012 and instead members of
the scheme were offered membership of the UK defined contribution pension plan
with effect from 1 January 2013.
The most recent triennial actuarial valuation of the scheme was carried out as
at 1 January 2024, the result of which was that the scheme had an actuarial
surplus of £2.4m (January 2021: £4.9m deficit) and a funding level of
112.0%.
Given the reported funding surplus, work commenced during the year seeking to
achieve a full-scheme buy-in by getting benefits secured with an insurer. The
buy-in process involves buying an insurance contract out of plan assets which
matches the scheme liabilities, therefore derisking the scheme and securing
member benefits. The trustees signed an agreement with Just Group Plc to
effect this buy-in on 5 December 2025. Fees associated with the buy-in at 30
September 2025 are £0.2m and are recognised within exceptional items.
Under IAS 19, "Employee Benefits" a valuation of the scheme is conducted at
the year-end date based on updating the valuation calculations from the most
recent actuarial valuation.
In accordance with this valuation, there is a pension surplus recognised on
the balance sheet of £4.1m (2024: £5.6m), and based on legal advice
previously taken, the recognition of the surplus on the balance sheet remains
appropriate. The decrease in the pension surplus is driven by lower than
expected investment returns on assets net of interest of £2.7m, partially
offset by a £1.1m gain due to changes in actuarial assumptions.
INTERIM GROUP MANAGING DIRECTOR REVIEW
In my new capacity as Interim Group Managing Director, I am pleased to be
delivering the Group strategy as detailed below:
BUILDING CAPABILITIES TO WIN
Our strategy is to be the partner of choice in high-growth, high-value
beverage categories where flavour, functionality, and quality intersect.
Achieving this requires both the right capabilities and the right people. This
year we have strengthened our regional and central Leadership Teams with
leaders who bring deep industry experience and proven track records in driving
growth. We are also developing the considerable talent already within Treatt,
ensuring our people have the skills, tools, and opportunities to deliver on
our ambitions.
In addition, we are investing in the commercial growth engine of the business,
with planned commitments in sales, marketing, and innovation. These
investments are designed to accelerate our presence in the rapidly growing
mid-tier of the beverage market and other key adjacencies, where a wave of
challenger brands are disrupting the landscape in exciting new ways.
This segment represents a powerful growth opportunities, and our enhanced
commercial capability will ensure we can compete and win.
This investment in people and capability underpins the breadth and quality of
our product portfolio. From citrus, where our heritage, technical expertise,
and quality leadership remain unmatched, to botanicals, herbs, spices,
florals, tea, and functional extracts, our offer is aligned with the trends
reshaping global beverages. To achieve these investments we are reallocating
resources and self funding where appropriate. Our ability to innovate quickly,
localise formulations, and deliver premium natural extracts at scale gives us
a distinctive competitive edge.
A PARTNER IN INNOVATION
The strength of our customer relationships is a key differentiator. We are
seen not only as a supplier, but as a trusted collaborator who understands
their ambitions and works alongside them to bring products to life. Through
early-stage engagement, rapid prototyping, and shared commitment to
excellence, we are shortening time to market and helping our customers launch
with confidence.
Sustainability is central to how we operate and grow. We have embedded
responsible sourcing, carbon footprint transparency, and waste reduction into
our processes, working closely with
suppliers to ensure traceability and ethical practices. We are actively
engaging with our key customers and suppliers to advance net zero
conversations, encouraging our supplier base to decarbonise and collaborating
to identify solutions that support mutual sustainability goals. Our goal is to
create ingredients that deliver exceptional flavour and functionality while
minimising environmental impact, enabling our customers to meet their own
sustainability commitments without compromise on taste or quality.
EXECUTING FOR GROWTH
We are executing on strategic projects that expand our reach, deepen our role
as a partner in innovation, and unlock new markets and categories. This
includes digitising our product platform, expanding regional infrastructure in
APAC, and accelerating growth in premium natural extracts and functional
beverage solutions. Sustainability and operational excellence are embedded in
these initiatives, ensuring they deliver not only commercial performance but
also long-term environmental benefits.
We are also simplifying our business to focus on what we do best and
digitising in ways that will directly benefit our customers, from making it
easier to access our products and expertise, to streamlining processes for
greater responsiveness. We are exploring the potential of AI across several
areas of the business. We are already using AI to accelerate new product
development ideation with our customers, enabling faster and more targeted
innovation. In operations, AI is helping us drive efficiencies, optimise
processes, and identify opportunities to deliver even better value and
service.
By bringing together market insight, technical expertise, strong leadership,
and deep customer intimacy, we are building a platform that will not only
withstand short-term volatility but also positions us to capture the
significant opportunities ahead.
SUMMARY
This has been a challenging year which impacted revenue growth and
profitability, but we remain focused on achieving our medium-term goals of
sustainable top-line and bottom-line growth. We will retain a sharp focus on
both cost and cash generation, but without compromising on investing in
innovation to broaden our product portfolio across our pillars to meet the
demands of our customers.
Manprit Randhawa
Interim Group Managing Director & Interim Chief Financial Officer
19 January 2026
GROUP INCOME STATEMENT
for the year ended 30 September 2025
2025 2024 (restated)(1)
Notes Before exceptional items Before exceptional items
£'000 Exceptional items (note 7) £'000 Exceptional items (note 7)
£'000 Total £'000 Total
£'000 £'000
Revenue 6 132,474 - 132,474 150,203 - 150,203
Cost of sales (98,200) - (98,200) (106,261) - (106,261)
Gross profit 34,274 - 34,274 43,942 - 43,942
Administrative expenses 7 (23,608) (935) (24,543) (24,617) (328) (24,945)
Acquisition expenses(2) 7 - (2,374) (2,374) - - -
Relocation expenses 7 - - - - (302) (302)
Operating profit/(loss) 10,666 (3,309) 7,357 19,325 (630) 18,695
Finance income 290 - 290 229 - 229
Finance expenses (644) - (644) (1,005) - (1,005)
Profit/(loss) before taxation 10,312 (3,309) 7,003 18,549 (630) 17,919
Taxation 8 (2,215) 276 (1,939) (4,164) 102 (4,062)
Profit/(loss) for the year attributable to owners of the Parent Company 8,097 (3,033) 5,064 14,385 (528) 13,857
Earnings per share Adjusted(3) Statutory Adjusted(3) Statutory
Basic 10 13.40p 8.38p 23.58p 22.71p
Diluted 10 13.37p 8.36p 23.45p 22.59p
1 Revenue and cost of sales, and therefore the profit attributable to owners
of the Parent Company, have been restated for the year ended 30 September
2024, further details are given in note 12.
2 Acquisition expenses relate to costs incurred as a result of the proposed
acquisition of Treatt PLC by Natara Global Limited which lapsed on 3 November
2025, details of which are given in note 7.
3 All adjusted earnings per share measures exclude exceptional items and the
related tax effect, details of which are given in note 7.
All financial information presented relates to continuing operations.
The group reconciliation of net cash flow to movement in net debt, together
with notes 1 to 14 form part of these financial statements.
GROUP STATEMENT OF COMPREHENSIVE INCOME
for the year ended 30 September 2025
Notes 2025 2024 (restated)(1)
£'000 £'000
Profit for the year attributable to owners of the Parent Company 5,064 13,857
Items that will or may be reclassified subsequently to profit or loss:
Currency translation differences on foreign currency net investments (277) (6,156)
Current tax on foreign currency translation differences 8 (31) -
Deferred tax on foreign currency translation differences 8 10 (257)
Fair value movement on cash flow hedges (109) 195
Deferred tax on fair value movement 8 27 (49)
(380) (6,267)
Items that will not be reclassified subsequently to profit or loss:
Actuarial (loss)/gain on defined benefit pension scheme (1,676) 1,294
Deferred tax on actuarial (loss)/gain 8 419 (323)
(1,257) 971
Other comprehensive expense for the year (1,637) (5,296)
15,816
Total comprehensive income for the year attributable to owners 3,427 8,561
of the Parent Company
1 Revenue and cost of sales, and therefore the profit attributable to owners
of the Parent Company, have been restated for the year ended 30 September
2024, further details are given in note 12.
All financial information presented relates to continuing operations.
The group reconciliation of net cash flow to movement in net debt, together
with notes 1 to 14 form part of these financial statements.
GROUP STATEMENT OF CHANGES IN EQUITY
for the year ended 30 September 2025
Share Share premium account Treasury Shares Own shares in share trusts Hedging reserve Foreign exchange reserve Retained earnings Total
capital
equity
£'000 £'000 £'000 £'000 £'000 £'000
£'000 £'000
1 October 2023 1,223 23,484 - (2) (42) 7,463 105,120 137,246
Prior year adjustment(1) - - - - - - (410) (410)
1 October 2023 (restated) 1,223 23,484 - (2) (42) 7,463 104,710 136,836
Profit for the year (restated) - - - - - - 13,857 13,857
Other comprehensive income:
Exchange differences - - - - - (6,156) - (6,156)
Fair value movement on cash flow hedges - - - - 195 - - 195
Actuarial gain on defined benefit pension scheme - - - - - - 1,294 1,294
Taxation relating to items above - - - - (49) (257) (323) (629)
Total comprehensive income - - - - 146 (6,413) 14,828 8,561
Transactions with owners:
Dividends - - - - - - (4,924) (4,924)
Share-based payments - - - - - - 492 492
Movement in own shares in share trusts - - - 2 - - - 2
Gain on release of shares in share trusts - - - - - - 116 116
Issue of share capital 2 - - (2) - - - -
Taxation relating to items recognised directly in equity - - - - - - (23) (23)
Total transactions with owners 2 - - - - - (4,339) (4,337)
30 September 2024 (restated) 1,225 23,484 - (2) 104 1,050 115,199 141,060
Profit for the year - - - - - - 5,064 5,064
Other comprehensive income:
Exchange differences - - - - - (277) - (277)
Fair value movement on cash flow hedges - - - - (109) - - (109)
Actuarial gain on defined benefit pension scheme - - - - - - (1,676) (1,676)
Taxation relating to items above - - - - 27 (21) 419 425
Total comprehensive income - - - - (82) (298) 3,807 3,427
Transactions with owners:
Dividends - - - - - - (5,147) (5,147)
Share-based payments - - - - - - 292 292
Movement in own shares in share trusts - - - 3 - - - 3
Gain on release of shares in share trusts - - - - - - 104 104
Issue of share capital 1 - - (1) - - - -
Share repurchase - - (39) - - - (4,961) (5,000)
Total transactions with owners 1 - (39) 2 - - (9,712) (9,748)
30 September 2025 1,226 23,484 (39) - 22 752 109,294 134,739
1 Opening retained earnings as at 1 October 2023, profit for the year ended 30
September 2024, and thus the opening retained earnings as at 1 October 2024
are shown restated, further details are given in note 12.
The group reconciliation of net cash flow to movement in net debt, together
with notes 1 to 14 form part of these financial statements.
GROUP BALANCE SHEET
as at 30 September 2025
Registered Number: 01568937
Notes 2025 2024 (restated)(1) 2023 (restated)(1)
£'000 £'000 £'000
ASSETS
Non-current assets
Intangible assets 2,231 2,534 2,752
Property, plant and equipment 69,989 69,808 71,526
Right-of-use assets 884 379 538
Post-employment benefits 4,060 5,578 3,723
77,164 78,299 78,539
Current assets
Inventories 62,524 54,895 63,094
Trade and other receivables 26,826 33,107 31,861
Current tax assets 254 430 300
Derivative financial instruments 81 380 8
Cash and bank balances 1,745 1,786 809
91,430 90,598 96,072
Total assets 168,594 168,897 174,611
LIABILITIES
Current liabilities
Borrowings (6,718) (2,134) (10,642)
Provisions (169) (245) (102)
Trade and other payables (21,815) (18,695) (20,700)
Lease liabilities (205) (172) (176)
Derivative financial instruments (63) - (176)
Current tax liabilities - (1,324) (755)
(28,970) (22,570) (32,551)
Net current assets 62,460 68,028 63,521
Non-current liabilities
Lease liabilities (721) (219) (373)
Deferred tax liabilities (4,164) (5,048) (4,851)
(4,885) (5,267) (5,224)
Total liabilities (33,855) (27,837) (37,775)
Net assets 134,739 141,060 136,836
1 Comparative balance sheets presented as at 30 September 2023 and 30
September 2024 have been restated following adjustments made to revenue and
cost of sales, and therefore net assets, further details are given in note 12.
GROUP BALANCE SHEET (continued)
Notes 2025 2024 (restated)(1) 2023 (restated)(1)
£'000 £'000 £'000
EQUITY
Share capital 11 1,226 1,225 1,223
Share premium account 23,484 23,484 23,484
Treasury shares 11 (39) - -
Own shares in share trusts - (2) (2)
Hedging reserve 22 104 (42)
Foreign exchange reserve 752 1,050 7,463
Retained earnings 109,294 115,199 104,710
Total equity attributable to owners of the 134,739 141,060 136,836
Parent Company
1 Comparative balance sheets presented as at 30 September 2023 and 30
September 2024 have been restated following adjustments made to revenue and
cost of sales, and therefore net assets, further details are given in note 12.
The group reconciliation of net cash flow to movement in net debt, together
with notes 1 to 14 form part of these financial statements.
GROUP STATEMENT OF CASH FLOWS
for the year ended 30 September 2025
Notes 2025 2024 (restated)(1)
£'000 £'000
Cash flow from operating activities
Profit before taxation 7,003 17,919
Adjusted for:
Depreciation of property, plant and equipment and right-of-use assets 5,039 4,640
Amortisation of intangible assets 469 426
Loss on disposal of property, plant and equipment 268 28
Loss on disposal of intangible assets 80 -
Net finance costs excluding post-employment benefit expense 641 1,000
Share-based payments 292 512
Decrease/(increase) in fair value of derivatives 254 (353)
Employer contributions to defined benefit pension scheme - (338)
Post-employment benefit income (287) (224)
Defined benefit pension scheme expenses 129 -
Operating cash flow before movements in working capital 13,888 23,610
Movements in working capital:
(Increase)/decrease in inventories (7,707) 4,835
Decrease/(increase) in receivables 5,962 (2,711)
Increase/(decrease) in payables 2,392 (939)
Cash generated from operations 14,535 24,795
Taxation paid (3,238) (3,727)
Net cash generated from operating activities 11,297 21,068
Cash flow from investing activities
Proceeds on disposal of property, plant and equipment 2 36
Purchase of property, plant and equipment (4,730) (5,425)
Purchase of intangible assets (245) (243)
Interest received 3 5
Net cash used in investing activities (4,970) (5,627)
GROUP STATEMENT OF CASH FLOWS (continued)
Notes 2025 2024 (restated)(1)
£'000 £'000
Cash flow from financing activities
Repayment of borrowings and loans - (9,952)
Proceeds from bank borrowings 4,597 1,559
Repayment of lease liabilities (227) (176)
Interest paid (632) (992)
Dividends paid 9 (5,147) (4,924)
Proceeds on issue of shares 11 1 2
Share repurchase (5,000) -
Sale of own shares by share trusts 106 116
Net cash used in financing activities (6,302) (14,367)
Net increase in cash and cash equivalents 25 1,074
Effect of foreign exchange rates (66) (97)
Movement in cash and cash equivalents in the year (41) 977
Cash and cash equivalents at beginning of year 1,786 809
Cash and cash equivalents at end of year 1,745 1,786
Cash and cash equivalents comprise:
Cash and bank balances 1,745 1,786
1,745 1,786
1 Profit before taxation has been restated for the year ended 30 September
2024, further details are given in note 12.
The group reconciliation of net cash flow to movement in net debt, together
with notes 1 to 14 form part of these financial statements.
GROUP RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
for the year ended 30 September 2025
2025 2024
£'000 £'000
Movement in cash and cash equivalents in the year (41) 977
Repayment of borrowings and loans - 9,952
Proceeds from bank borrowings (4,597) (1,559)
(Increase)/reduction in lease liabilities (535) 158
Cash (outflow)/inflow from changes in net debt in the year (5,173) 9,528
Effect of foreign exchange rates 13 115
Movement in net debt in the year (5,160) 9,643
Net debt at beginning of year (739) (10,382)
Net debt at end of year (5,899) (739)
Analysis of movement in net debt during the year:
At 1 October Cash flow Foreign exchange movements £'000 At 30 September
2024 £'000 Non-cash movements 2025
£'000 £'000 £'000
Cash and bank balances 1,786 25 - (66) 1,745
Cash and cash equivalents 1,786 25 - (66) 1,745
Bank borrowings and term loans (2,134) (4,597) - 13 (6,718)
Lease liabilities (391) 227 (769) 7 (926)
Net debt (739) (4,345) (769) (46) (5,899)
At 1 October Cash flow Non-cash movements Foreign exchange movements At 30 September
2023
£'000
£'000
2024
£'000 £'000
£'000
Cash and bank balances 809 1,074 - (97) 1,786
Cash and cash equivalents 809 1,074 - (97) 1,786
Bank borrowings and term loans (10,642) 8,393 - 115 (2,134)
Lease liabilities (549) 176 (22) 4 (391)
Net debt (10,382) 9,643 (22) 22 (739)
The group reconciliation of net cash flow to movement in net debt, together
with notes 1 to 14 form part of these financial statements.
NOTES TO THE FULL YEAR RESULTS
1. BASIS OF PREPARATION
In accordance with Section 435 of the Companies Act 2006, the Group confirms
that the financial information for the years ended 30 September 2025 and 2024
are derived from the Group's audited financial statements and that these are
not statutory accounts and, as such, do not contain all information required
to be disclosed in the financial statements prepared in accordance with
UK-adopted international accounting standards. The statutory accounts for the
year ended 30 September 2024 have been delivered to the Registrar of
Companies. The statutory accounts for the year ended 30 September 2025 have
been audited and approved but have not yet been filed.
The Group's audited financial statements for the year ended 30 September 2025
received an unqualified audit opinion and the auditor's report contained no
statement under section 498(2) or 498(3) of the Companies Act 2006.
The financial information contained within this full year results statement
was approved and authorised for issue by the Board on 19 January 2026.
2. ACCOUNTING POLICIES
These financial statements have been prepared in accordance with the
accounting policies set out in the audited Group financial statements as at,
and for the year ended 30 September 2024.
There were no new standards and amendments to standards which are mandatory
and relevant to the Group for the first time for the financial year ended 30
September 2025 which had a material effect on this full year results
announcement.
3. ACCOUNTING ESTIMATES
The preparation of this statement requires management to make judgements,
estimates and assumptions that affect the application of accounting policies
and the reported amounts of assets, liabilities, income and expenses. In
preparing this preliminary statement, 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 Group
financial statements as at, and for the year ended 30 September 2024, except
in relation to inventory provisioning which is documented below.
Inventory provision
The Group has an inventory provisioning policy, which this year was updated to
provide against citrus stock aged over three years whereas previously it had
been two years, but has otherwise been applied consistently year-on-year. The
impact of this change in the Group income statement was £0.5m in the year.
4. GOING CONCERN
The Directors have concluded that it is reasonable to adopt the going concern
basis in preparing these financial statements based on the expectation that
the Group has adequate resources to continue as a going concern for a period
of twelve months from the date these financial statements are approved.
The process adopted to assess the viability of the Group involved the
modelling of a base case scenario, a series of theoretical stress-test
scenarios and a "reverse stress test" scenario, all linked to the Group's
principal risks. These scenarios focused primarily on severe, but plausible,
adverse macro and microeconomic conditions impacting on revenues and costs,
the root cause of which might be changes in consumer confidence or the
competitive landscape in the sector, or supply chain disruptions such as trade
barriers or climate change.
The Group has a £25.0m asset-based lending facility with HSBC in the UK,
which falls for renewal in June 2027 and a revolving credit facility with Bank
of America in the US for $25.0m, renewing in July 2026, although we have
obtained credit approval for, and expect to shortly formalise a further
one-year extension of this facility to July 2027. Therefore, for the purpose
of the going concern assessment, we have considered the base case and each
stress test in the context of the US renewal being concluded in due course.
In assessing the Group's prospects and resilience, the Directors have done so
with reference to its current financial position and prospects, its credit
facilities, its recent and historical financial performance, and forecasts.
The Directors have modelled various scenarios representing severe but
plausible manifestations of risks, particularly those affecting demand and raw
material prices, and have considered adverse variances against FY25 actuals
and FY26 (and early FY27) forecasts by 10% or more on revenues and gross
profit margin, both separately and simultaneously. This includes the impacts
of a potential breach of banking covenants.
Under all of the above scenarios considered (excluding the reverse stress
test), which represent increasingly severe manifestations of the Group's
principal risks and uncertainties, Group headroom remains sufficient
throughout the going concern (twelve-month) period, in particular because of
capacity on the US debt with low interest payable, rendering non-compliance
with covenants extremely remote.
The reverse stress test scenario involves determining conditions that would
breach the covenants of the UK facility, and therefore an assumed removal or
repayment thereof, and give rise to financing requirements in excess of the
Group's remaining US facility, within twelve months of the financial
statements reporting date.
In the reverse stress test scenario, it was determined that, all other
variables remaining equal, the UK margin covenant would breach if the Group
experienced raw material cost increases, across all product lines in
aggregate, of c.14% compared to 2025 levels and was not able to pass on more
than 50% of that increase to customers (lower than our proven ability to pass
on costs since 2022). Assuming the UK facility was withdrawn, a decrease of
revenue of c.23% and c.18% against FY26 (and early FY27) budget and FY25
actuals respectively (alongside this margin reduction of c.600bps and c.550bps
compared with FY26 budget and FY25 levels respectively) would lead to a full
erosion of the remaining headroom on US facilities by January 2027, with no
mitigating measures put in place.
The directors have concluded that the likelihood of this reverse stress test
scenario is remote. In addition, it is implausible that the Group would not
act swiftly and decisively to activate mitigations such as operating cost
savings, reduction in capital expenditure, working capital and inventory
management, and delaying or cancelling future dividends in order to mitigate
immediate liquidity concerns.
Having considered this range of stress-test scenarios and the Group's proven
ability to adapt to and manage adversity, the Directors have not identified
any material uncertainty that may give rise to significant doubt over the
Group's ability to continue as a going concern for a period of at least twelve
months from the date that this report is approved. Accordingly, they continue
to adopt the going concern basis of accounting in preparing these financial
statements.
5. RISKS AND UNCERTAINTIES
The operation of a public company involves a series of risks and uncertainties
across a range of strategic, commercial, operational and financial areas. The
principal risks and uncertainties that could have a material impact on the
Group's performance over the next twelve months (for example, causing actual
results to differ materially from expected results or from those experienced
previously) are the same in all material respects, excluding the pandemic, as
those detailed on pages 52 to 57 of the audited 2024 Annual Report and
Financial Statements.
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.
Many of the Group's activities, including sales, manufacturing, supply chain,
technical, IT and finance, are managed globally on a Group basis.
Geographical segments
The following table provides an analysis of the Group's revenue by
geographical market:
Revenue by destination 2025 2024 (restated)(1)
£'000 £'000
United Kingdom 6,992 8,052
Rest of Europe - Germany 7,151 4,892
- Ireland 8,783 16,552
- Other 15,759 14,095
The Americas - USA 52,962 57,412
- Other 7,415 14,555
Rest of the World - China 9,559 11,495
- Other 23,853 23,150
132,474 150,203
(1) Revenue, and therefore the analysis by geographical market has been
restated for the year ended 30 September 2024, further details are given in
note 12.
All Group revenue is in respect of the sale of goods. No country included
within 'Other' contributes more than 5.0% of the Group's total revenue. The
Group revenue generated by customers accounting for more than 10% each of the
Group's overall revenue is £nil (2024: £25,477,000).
Non-current assets by geographical location, excluding post-employment benefit
surplus, were as follows:
Non-current assets by destination 2025 2024
£'000 £'000
United Kingdom 45,560 45,698
United States 26,564 26,925
China 980 98
73,104 72,721
7. EXCEPTIONAL ITEMS
The exceptional items referred to in the income statement can be categorised
as follows:
2025 2024
£'000 £'000
Treatt PLC acquisition:
Acquisition expenses 2,374 -
Less: tax effect of acquisition expenses (92) -
Regional restructuring:
Restructuring expenses 538 328
Less: tax effect of restructuring expenses (135) (82)
Other exceptionals:
Other exceptional expenses (see below) 397 -
Less: tax effect of other exceptional expenses (49) -
Relocation expenses:
Relocation expenses - 302
Less: tax effect of relocation expenses - (20)
3,033 528
The exceptional items all relate to non-recurring costs which are considered
material in aggregate and discrete in nature; therefore, the Group considers
them exceptional in order to provide a more meaningful view of the Group's
underlying business performance.
Acquisition expenses
Acquisition expenses relate to legal, financial, advisory and other direct
costs incurred solely in relation to the recommended offer first announced on
8 September 2025, via a scheme of arrangement from Natara Global Limited, to
acquire the entire issued and to-be-issued share capital of Treatt PLC. On 3
November 2025, the scheme of arrangement failed to reach the 75% approval
threshold and did not pass. As a result, the acquisition lapsed and Treatt
exited the offer period under the UK takeover code. The costs classified as
exceptional in the year include costs actually incurred, and those expected to
be incurred such as unbilled work in progress from our legal advisers and
brokers at 30 September 2025. The total expenses recognised as at the
reporting date are £2,374,000. However, immaterial further costs and credits
were incurred subsequent to the year end that will be reflected as exceptional
items in the FY26 financial statements. See note 13 for further detail on post
balance sheet events.
Restructuring expenses
Restructuring expenses comprise costs that were incurred in respect of a Group
restructure into a regional operating model. This restructure involved
removing some Group management positions and recruiting locally focused
leadership in the UK and the US. Restructuring costs principally comprise
termination payments and associated advisory costs relating to those employees
impacted by the transition to the new structure, as well as recruitment
expenses for newly created roles. There are no further expenses expected in
relation to this process.
Other exceptional expenses
Other exceptional expenses comprise costs associated with achieving a
full-scheme buy-in for the defined benefit pension scheme and impairments of
property, plant and equipment.
Pension scheme buy-in costs relate to the expenses incurred to date in respect
of de-risking the R.C. Treatt & Company Pension Scheme via a full-scheme
buy-in. This process was completed on 5th December 2026 and has been
classified as exceptional due to its expected financial impact over the
duration of the project and its non-recurring nature. Total costs incurred to
date are £201,000, of which £129,000 have been reimbursed by the Scheme,
with remaining fees expected to be in the region of £0.2m to 0.3m. See note
13 for further detail on post balance sheet events.
7. EXCEPTIONAL ITEMS (continued)
Other exceptional expenses (continued)
Impairment costs of £196,000 relate to the aborted design and feasibility
costs of an expansion at Treatt USA Inc's Lakeland site. The impairment charge
is for the full value of the work initially recognised as work in progress in
the year to 30 September 2023. The impairment was made on the basis that
realisation of the expansion under the terms of the design and feasibility
studies undertaken was no longer probable. There are no further expenses
expected in relation to this aborted project.
8. TAXATION
Analysis of tax charge in income statement:
2025 2024
£'000 £'000
Current tax:
UK corporation tax on profits for the year - -
Adjustments to UK tax in respect of previous periods 58 -
Overseas corporation tax on profits for the year 2,219 4,230
Adjustments to overseas tax in respect of previous periods 82 30
Total current tax 2,359 4,260
Deferred tax:
Origination and reversal of temporary differences (142) (120)
Effect of change of tax rate on opening deferred tax - (77)
Adjustments in respect of previous periods (278) (1)
Total deferred tax (420) (198)
Tax on profit on ordinary activities 1,939 4,062
Analysis of tax (credit)/charge in other comprehensive income:
2025 2024
£'000 £'000
Current tax:
Foreign currency translation differences 31 -
Total current tax 31 -
Deferred tax:
Cash flow hedges (27) 49
Foreign currency translation differences (10) 257
Defined benefit pension scheme (419) 323
Total deferred tax (456) 629
Total tax (credit)/charge recognised in other comprehensive income (425) 629
8. TAXATION (continued)
Analysis of tax charge in equity:
2025 2024
£'000 £'000
Deferred tax:
Share-based payments - 23
Total tax charge recognised in equity - 23
Factors affecting tax charge for the year:
The tax assessed for the year is different from that calculated at the
standard rate of corporation tax in the UK applicable to the Group of 25.0%
(2024: 25.0%). The differences are explained below:
2025 2024 (restated)(1)
£'000 £'000
Profit before tax multiplied by standard rate of UK corporation tax at 25.0% 1,751
(2024: 25.0%)
4,480
Effects of:
Prior period adjustment(1) tax impact not adjusted for - 136
Expenses not deductible in determining taxable profit 753 116
Adjustments in respect of overseas state taxes 273 309
Benefits of overseas tax incentives (229) (320)
Research and development tax credits (24) (19)
Difference in tax rates on overseas earnings (400) (654)
Adjustments to tax charge in respect of prior years (196) 29
Deferred tax not recognised 11 (15)
Total tax charge for the year 1,939 4,062
( )
1 Profit before tax has been restated for the year ended 30 September 2024,
further details are given in note 12.
The adjustments in respect of prior years relate to the finalisation of
previous years' tax computations and the impact of the 2024 restatement of
profit before tax.
9. DIVIDENDS
Equity dividends on ordinary shares:
Dividend per share for years
ended 30 September
2025 2024 2023 2025 2024
Pence Pence Pence £'000 £'000
Interim dividend 2.60p(3) 2.60p(2) 2.55p(1) 1,593 1,589
Final dividend 3.00p(4) 5.81p(3) 5.46p(2) 3,554 3,335
5.60p 8.41p 8.01p 5,147 4,924
1 Accounted for in the year ended 30 September 2023.
2 Accounted for in the year ended 30 September 2024, totalling £4,924,000 as
reported.
3 Accounted for in the year ended 30 September 2025, totalling £5,147,000 as
reported.
4 The proposed final dividend for the year ended 30 September 2025 of 3.00p
will be voted on at the Annual General Meeting on 26 March 2026 and will
therefore be accounted for in the financial statements for the year ending 30
September 2026.
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) as these do not rank for dividend.
2025 2024 (restated)(1)
Profit after taxation attributable to owners of the Parent Company (£'000) 5,064 13,857
Weighted average number of ordinary shares in issue ('000) 60,446 61,006
Basic earnings per share (pence) 8.38p 22.71p
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:
2025 2024 (restated)(1)
No. ('000) No. ('000)
Weighted average number of shares 61,265 61,210
Weighted average number of shares held in the EBT (59) (204)
Weighted average number of shares held in treasury (760) -
Weighted average number of shares used for calculating basic EPS 60,446 61,006
Executive share option schemes 117 269
All-employee share options 14 69
Weighted average number of shares used for calculating diluted EPS 60,577 61,344
Diluted earnings per share (pence) 8.36p 22.59p
10. EARNINGS PER SHARE (continued)
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:
2025 2024 (restated)(1)
£'000 £'000
Profit after taxation attributable to owners of the Parent Company 5,064 13,857
Adjusted for:
Exceptional items - Treatt PLC acquisition (see note 7) 2,374 -
Exceptional items - regional restructuring (see note 7) 538 328
Exceptional items - relocation (see note 7) - 302
Exceptional items - other (see note 7) 397 -
Taxation thereon (276) (102)
Adjusted earnings 8,097 14,385
Adjusted basic earnings per share (pence) 13.40p 23.58p
Adjusted diluted earnings per share (pence) 13.37p 23.45p
(1) Profit before tax, and therefore all earnings per share metrics have been
restated for the year ended 30 September 2024, further details are given in
note 12.
11. SHARE CAPITAL
Authorised, called up, allotted and fully paid 2025 2025 2024 2024
£'000 Number £'000 Number
At start of year 1,225 61,209,761 1,223 61,129,589
Issued in year 1 73,332 2 80,172
At end of year 1,226 61,283,093 1,225 61,209,761
The Parent Company has one class of ordinary shares with a nominal value of 2p
each, which carry no right to fixed income.
During the year the Parent Company issued 73,000 (2024: 80,000) ordinary
shares to the SIP Trust (SIP), at nominal value of 2p per share, for the
purpose of meeting obligations under employee share option schemes. The number
of shares held in the EBT at 30 September 2025 is 19,000 (2024: 97,000) and
the number of shares held in the SIP is 340,000 (2024: 361,000).
During the year, the Company repurchased some of its own ordinary shares under
its share buyback programme. These shares are held as treasury shares and are
not entitled to dividends or voting rights. All shares acquired in the year
remain held at 30 September 2025. The movement in treasury shares during the
year was as follows:
Authorised, called up, allotted and fully paid 2025 2025
£'000 Number
At start of year - -
Issued in year 39 1,940,161
At end of year 39 1,940,161
12. PRIOR YEAR ADJUSTMENT
As per our stated revenue recognition policy, revenue is recognised when
control over goods is transferred to the customer. Depending on the terms
agreed with the customer, control may pass as early in the delivery process as
commencement of transport to the export port or as late as unloading at the
customer destination.
Following a comprehensive review of shipment terms as part of 30 September
2025 revenue cut-off procedures, we deemed it appropriate to revisit revenue
cut-off data as at the end of FY24 and FY23. In doing so, we identified errors
whereby revenue was recognised pre, rather than post year end in both periods,
that have been corrected by restatement of the FY23 balance sheet (and
therefore FY24 opening
reserves), and the FY24 income statement, balance sheet and statement of cash
flows.
The impacts of these restatements on the primary statements for FY23 and FY24
are shown below, and the impacts on key performance measures are disclosed in
note 14. The impact on profit before taxation, net current assets and net
assets has not been material to either FY23 or FY24.
Restated Group income statement for the year ended 30 September 2024
Group Previously reported Adjustment As restated
£'000 £'000 £'000
Revenue 153,066 (2,863) 150,203
Cost of sales (108,580) 2,319 (106,261)
Gross profit(1) 44,486 (544) 43,942
Profit before taxation(1) 19,093 (544) 18,549
Basic earnings per share (pence) 23.61p (0.90p) 22.71p
Diluted earnings per share (pence) 23.48p (0.89p) 22.59p
Restated Group balance sheet for the years ended 30 September 2023 and 2024
Year ended 30 September 2024
Group Previously reported Adjustment As restated
£'000 £'000 £'000
Inventories 51,878 3,017 54,895
Trade and other receivables 37,078 (3,971) 33,107
Retained earnings 116,153 (954) 115,199
Cash flow statement impact: decrease in inventories 7,231 (2,396) 4,835
Cash flow statement impact: increase in receivables (5,651) 2,940 (2,711)
The movements in inventory and receivables differ from the movements in
revenue and cost of sales due to the restatement of the balance sheet for the
year ended 30 September 2023.
12. PRIOR YEAR ADJUSTMENT (continued)
Year ended 30 September 2023
Group Previously reported Adjustment As restated
£'000 £'000 £'000
Inventory 62,396 698 63,094
Trade and other receivables 32,969 (1,108) 31,861
Retained earnings 105,120 (410) 104,710
1 Profit figures are stated before exceptional items.
13. POST BALANCE SHEET EVENTS
Acquisition by Natara Global Limited
On 3 November 2025, the scheme of arrangement failed to reach the 75% approval
threshold and did not pass. As a result, the contingent element of fees
accrued at year end were not payable (£1.0m). Discretionary fees of £0.8m
were agreed to post year end. Both of these form non-adjusting post balance
sheet events.
Pension scheme buy-in
On 5 December 2025, the Trustees of the scheme purchased an insurance policy
from Just Retirement Ltd, which achieved the objective of a full-scheme buy-in
of the scheme liabilities. The insurance policy purchase, and all expected
disbursements are to be met out of surplus scheme assets.
Change in board of Directors
Since the year end, the following changes have occurred in the Board of
Directors:
· David Shannon, Chief Executive Officer, stepped down from the
Board on 31 December 2025.
· Bronagh Kennedy, Non-executive Director and Chair of the
Remuneration Committee, will step down from the Board on 31 January 2026.
· Philip O'Connor, Non-executive Director and Chair of the Audit
Committee, will step down from the Board on 28 February 2026.
David Shannon's payments for loss of office will be set out on page 90 of the
Directors' Remuneration Report within the audited 2025 Annual Report and
Financial Statements.
14. ALTERNATIVE PERFORMANCE MEASURES
The Group reports certain alternative performance measures (APMs) that are not
required under IFRS. The Group believes that these APMs, when viewed in
conjunction with its IFRS financial information, provide valuable and more
meaningful information regarding the underlying financial and operating
performance of the Group to its stakeholders.
APMs referenced throughout the Annual Report which are not possible to easily
derive from the financial statements, are shown in the reconciliations below
alongside their statutory equivalent measures.
Return on average capital employed
Adjusted return on average capital employed (ROACE) is considered to be a key
performance indicator (KPI) and is an APM which enables stakeholders to see
the profitability of the business as a function of how much capital has been
invested in the business.
The derivation of this percentage, along with the statutory equivalent
measure, is shown below:
ROACE - APM measure
Group 2025 2024 (restated)(1) 2023 (restated)(1)
£'000 £'000 £'000
Total equity 134,739 141,060 136,836
Net debt 5,899 739 10,382
Capital employed 140,638 141,799 147,218
Interim total equity(2) 143,137 137,647 129,685
Interim net (cash)/debt(2) (949) 10,345 17,704
Interim capital employed(2) 142,188 147,992 147,389
Average capital employed(3) 141,542 145,670 150,292
Adjusted operating profit(4) 10,666 19,325 17,911
ROACE % 7.5% 13.3% 11.9%
ROACE - statutory measure
Group 2025 2024 (restated)(1)
£'000 £'000
Average capital employed² 141,542 145,670
Profit before taxation 7,003 17,919
ROACE % 4.9% 12.3%
14. ALTERNATIVE PERFORMANCE MEASURES (continued)
Net debt to adjusted EBITDA
The net debt to adjusted EBITDA ratio is useful to ensure that the level of
borrowings in the business can be supported by the cashflow in the business,
and as it is measured by reference to adjusted EBITDA, is considered to be an
APM.
The derivation of this ratio, along with its statutory equivalent measure is
shown below:
Net debt to adjusted EBITDA - APM measure
Group 2025 2024 (restated)(1)
£'000 £'000
Profit before taxation 7,003 17,919
Exceptional items 3,309 630
Profit before taxation and exceptional items 10,312 18,549
Interest receivable (290) (229)
Interest payable 644 1,005
Depreciation of property, plant and equipment and right-of-use assets 5,039 4,640
Amortisation of intangible assets 469 426
Adjusted EBITDA 16,174 24,391
Net debt 5,899 739
Net debt to adjusted EBITDA 0.36 0.03
Net debt to adjusted EBITDA - statutory measure
Group 2025 2024 (restated)(1)
£'000 £'000
Profit before taxation 7,003 17,919
Interest receivable (290) (229)
Interest payable 644 1,005
Depreciation of property, plant and equipment and right-of-use assets 5,039 4,640
Amortisation of intangible assets 469 426
EBITDA 12,865 23,761
Net debt 5,899 739
Net debt to EBITDA 0.46 0.03
1 Revenue and cost of sales, and therefore profit before taxation and net
assets, have been restated for the year ended 30 September 2024. Net assets
has also been restated for as at 30 September 2023, resultantly all APM
measures are shown restated.
2 Interim total equity and interim net cash/(debt) for a given year are taken
from the unaudited half year condensed financial statements made out to 31
March, which can be found at www.treatt.com.
3 Average capital employed for a given year is calculated as the average of
the opening, interim and closing capital employed.
4 Adjusted operating profit for ROACE purposes is operating profit before
exceptional items as defined in the Group income statement.
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