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(Alliance News) - Treatt PLC shares fell on Tuesday after the company reported a sharp fall in profit due to higher costs, despite an increase in revenue.
Shares were down 9.0% at 914.10 pence each on Tuesday morning in London.
Treatt is a Bury St Edmunds-based manufacturer and supplier of extracts and ingredients for the beverage, flavour and fragrance industries.
In the six months to March 31, the company recorded a pretax profit of GBP6.3 million, down 39% from GBP10.4 million a year before, as operating expenses rose 9.3% GBP11.7 million from GBP10.7 million. Further, the cost of sales rose 21% to GBP48.1 million from GBP39.5 million.
Meanwhile, revenue grew 9.0% to GBP66.3 million from GBP60.8 million. It attributed this to the post-pandemic re-opening of on-trade channels together, as well as "some" material new business wins.
Treatt declared an interim dividend of 2.50 pence per share, reflecting a 25% increase compared to 2.00p a year before.
Treatt said it ended the first half "strongly" and noted that the momentum has carried over into the second half.
Looking ahead, the company expects its tea, fruit & vegetables and health & wellness categories to deliver both revenue and margin growth in the second half.
It expects revenue growth for the full-year to exceed 15% and anticipates that pretax profit and exceptional items for the current financial year to be in line with the current market consensus of GBP21.7 million.
In financial 2021, Treatt generated revenue of GBP124.3 million and a pretax profit of GBP19.6 million.
By Abby Amoakuh; abbyamoakuh@alliancenews.com
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