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(Sharecast News) - Food and drink extracts and ingredients specialist Treatt reported a 5% growth in revenue in its full-year results on Tuesday, to £147.4m.
The London-listed firm said that when measured in constant currency terms, the growth still reached 3%.
It attributed the positive trajectory to minimal foreign exchange impact, operational efficiencies, and strategic pricing adjustments.
Treatt's profit before tax and exceptional items for 2023 reached £17.3m, reflecting a 14% year-on-year growth from the £15.3m recorded in the prior fiscal year.
That performance aligned with the expectations set by the board.
Furthermore, Treatt reduced its year-end net debt from £22.4m in 2022 to £10.4m on 30 September, highlighting record cash generation during the fiscal year.
On the operational front, Treatt said it executed successful pricing actions, particularly in the citrus segment, to counteract raw material inflation.
The company also saw continued robust growth in China and coffee, reinforcing the sectors as crucial strategic growth drivers.
With the UK site transition completed, Treatt said its capital expenditure had returned to normal.
The board explained that the transition positioned the group on a solid footing to drive future growth and operational efficiencies in the upcoming year and beyond.
Additionally, Treatt said it had actively worked on cost discipline across the organisation, effectively mitigating external macroeconomic challenges, including customer destocking.
"We have delivered good progress this year, with growth in both sales and profit, and sustained demand in our end markets, despite a challenging backdrop," said chief executive officer Daemmon Reeve.
"We saw encouraging growth in new markets, including coffee, China and Treattzest 6, as we worked to capitalise on the opportunities here and a strong performance from our citrus lines.
"While destocking trends were evident as customers reduced inventory in the face of elevated interest rates, we dealt with this proactively, mitigating impact through good cost discipline and considered pricing action."
Reeve said a significant milestone in the group's history was achieved as Treatt completed our transition to the new Skyliner Way facility, with work ongoing to maximise efficiencies as it continued to grow.
"As we enter the new financial year, while we are seeing some signs of recovery in a few customers, we are hoping to see further signs that destocking trends are reversing.
"In addition, long-term trends towards health and wellness, sugar reduction and use of natural extracts, areas in which Treatt excels, continue to support our core beverage market, and our largest geographical markets are returning to growth.
"These factors, together with the commitment and hard-work of all our colleagues in the past year and into the new, means that Treatt is well-positioned for further growth in the year ahead."
At 0849 GMT, shares in Treatt were up 1.77% at 457.95p.
Reporting by Josh White for Sharecast.com.
