(Alliance News) - Shares rose in Treatt PLC on Friday as it anticipates profit for its current financial year to the end of September will exceed market consensus, following a strong start to the year.
Shares in the Suffolk-based food ingredients maker were 12% higher at 860.00 pence on Friday in London.
For the year to date, Treatt said it has performed particularly well in most of its categories, including Citrus, Health & Wellness, Fruit & Vegetables and Tea. In addition, the company noted new business wins during the period, particularly in the growing global alcoholic seltzer category.
Although some parts of Treatt's portfolio remain affected by subdued on-trade demand due to closed venues around the world, demand from off-trade channels has increased, offsetting the muted on-trade demand.
As a result, profit for the first four months of the group's financial year is expected to be ahead of management expectations.
Looking ahead, Treatt expects the strong trading momentum to continue into the second half, but remains mindful of several uncertainties, including the pandemic, the chance of further lockdowns and its potential effect on demand and commodity prices.
In spite of this, Treatt is cautiously optimistic on continued growth in revenue and profit for the year, and anticipates pretax profit before exceptional items to beat the current market consensus of GBP15.1 million.
For the 2020 financial year, pretax profit before exceptional items was GBP14.8 million.
"We're encouraged by our strong trading momentum continuing into the current financial year. Performance has been positive across a number of our key categories, with particular growth in our solutions for the expanding alcoholic seltzer market, utilising our expertise in natural extracts," said Chief Executive Officer Daemmon Reeve.
"Whilst mindful of the global backdrop, we are confident that we can make further progress this year, to grow organic revenue across an increasingly global and diversified customer base who benefit from our technical expertise and value-add approach."
By Dayo Laniyan; dayolaniyan@alliancenews.com
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Treatt (TET)