Treatt strikes upbeat tone for full year

The manufacturer, which supplies the beverage, flavour and fragrance industries, said revenues in the six months to 31 March fell 5.1% to £72.1m, in line with expectations.

The first quarter, traditionally its quietest, was impacted by destocking, Treatt noted, but revenues jumped 5.1% in the second quarter.

Interim operating profits rose 5.9% before exceptional items to £8.2m, with pre-tax profits up 7.9% to £7.1m.

A dividend of 2.6p per share was proposed, a 2% increase year-on-year.

Ryan Govender, interim chief executive, said: "These results show a good growth in profit and operating margins.

"After the expected impact of destocking softened in the first quarter, momentum in the second was stronger as volumes grew and we recorded our highest ever monthly revenue in March.

"There are plenty of active new business opportunities, providing confidence for the second half. Momentum in the order book going into the second half is good, with a healthy sales pipeline, which we are encouraged by."

Treatt added that it expected full-year profits to be in line with expectations.

As at 1030 BST, shares in the firm were up 7% at 504.04p.

Jefferies, which has a ‘buy’ recommendation on the stock, said: "The full-year outlook is non-quantitative, but suggests a robust sales pipeline/order book provide comfort on consensus levels."

The market is currently looking for full-year earnings before interest and tax of around £20m.