(Alliance News) - Treatt PLC shares rose on Wednesday after it predicted a slight increase in half-year profit, despite destocking in the first quarter hurting sales.
Shares in Treatt rose 8.8% to 440.00 pence each in London on Wednesday morning.
Treatt is a Suffolk, England-based manufacturer and supplier of extracts and ingredients for the beverage, flavour and fragrance industries.
The company said it expects pretax profit for the six months ended March 31 to be around GBP7.5 million, marginally ahead of the GBP7.3 million delivered in the year before.
However, Treatt expects half-year revenue to reach GBP72.1 million, down 5.1% from GBP76.0 million. It said this reflects the destocking experienced in the first quarter.
On the other hand, the firm said it has seen signs of recovery, noting a 5.1% increase in sales in the second quarter.
Treatt added that its net operating margin has improved to around 11%, from 10% for the prior year.
Looking ahead, Treatt said it has a "solid sales order book" and a "healthy sales pipeline" going into the second half of financial 2024. It also expects its full-year pretax profit to be in line with the board's guidance.
Interim Chief Executive Officer Ryan Givender said: "Treatt delivered a robust performance in the first half, making good progress in line with our strategic goals. We are particularly pleased with progress in China, where we continued to invest and consolidate our position, and in our higher margin Premium categories where we have a number of active pipeline opportunities. Momentum in the second quarter was strong, and we recorded our highest ever monthly revenue in March."
By Sabrina Penty, Alliance News reporter
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Treatt (TET)