Treatt shrugs off Covid-19 hit to post jump in annual profits

(Sharecast News) - Chemicals group Treatt said it had performed strongly in an "unprecedented" year as it posted a jump in annual profits.
Revenues in the year to 30 September dipped 3% to £109.0m, but pre-tax profits before expectational items rose 11.3% to £14.8m. Treatt, which supplies the beverage, flavour and fragrance industries, said profits had exceeded the board's pre-Covid-19 expectations.

Adjusted earnings per share rose 10.7%,to 19.72p, while pre-tax profits rose to £13.7m from £12.5m a year earlier.

Tim Jones, chairman, said stockpiling had helped support sales during the first half as lockdown approached. "Then, as expected, volumes were hit during the second half, largely due to the drop in on-trade sales in the US and disrupted operations for the hospitality sector.

"But the impact has not been anything like we feared when our markets first went into lockdown."

Looking ahead, he said: "Notwithstanding Covid-19 related market uncertainty, we remain optimistic for the coming year. Our resilient business model and strategy for growth are delivery good results and we have further opportunities to pursue.

"In particular, the current trends in coffee, natural extracts and the burgeoning hard seltzer market play to our strengths and provide us with opportunities to further innovate and diversify our portfolio."

Chief executive Daemmon Reeve said the company had performed strongly during what had been an unprecedented year.

"We continue to focus on new market opportunities and consumer trends. Building on the excellent fundamentals of our business and broad added-value product offering, we have made a strong start to our new financial year."

Sara Welford, consumer analyst at Edison, said: "Treatt performed well during 2020 despite the pandemic. There was strong momentum across the tea, health and wellness, and fruit and vegetables categories, and citrus markets recovered as expected.

"While management report a strong start to the new financial year, the outlook is understandably uncertain: demand is not expected to return to normal levels before the end of the 2021 full year or into the 2022 full year, though management is confident the business is in the best possible shape to face the uncertainty."

As at 1415 GMT, shares in Treatt were largely flat at 647.3p.