Last checked at 11 Jul 2022 07:00
Edison Investment Research Limited Treatt (TET): New facility to drive growth 11-Jul-2022 / 07:00 GMT/BST
London, UK, 11 July 2022
Treatt (TET): New facility to drive growth Treatt has performed consistently well over the last few years, as it has moved from a commodity trading house to a partner and provider of advanced ingredients solutions. Following its successful expansion of capacity in the United States, it relocated its UK headquarters and manufacturing capability, with almost all staff now working from the new site. This should mark an inflection point for the business as the new facility is significantly more automated, allowing for greater efficiencies. Treatt is exposed to high-growth categories that are in the sweet spot of consumer preferences, such as sugar reduction, and reported at H122 that its order book is up 25% on last year. We maintain our forecasts and note that, as flagged by management, H2 is expected to witness both higher revenue and higher margins than H1, thus reverting to a more normal H1/H2 seasonal split after two years distorted by the COVID-19 pandemic.
Treatt trades at 23.7x and 16.1x FY22 P/E and EV/EBITDA, representing discounts of c 10% and c 5% respectively to its peers. We note the current share price is discounting medium-term sales growth of 5.7%, falling to 2.0% in perpetuity, with a WACC of 7.7% and a terminal EBIT margin of 20.0%. We forecast net debt at end FY22, moving to a net cash position thereafter. Click here to view the full report or here to sign up to receive research as it is published.
All reports published by Edison are available to download free of charge from its website www.edisongroup.com About Edison: Edison is a leading research and investor relations consultancy, connecting listed companies to the widest pool of global investors. By focusing on the volume and quality of investors reached – across institutions, family offices, wealth managers and retail investors – Edison can create and gauge intent to purchase, even in the darkest pools of capital, and then make introductions via non-deal roadshows, events or virtual meetings. Having been the first in-market 17 years ago, Edison now has more than 100 analysts covering every economic sector. Headquartered in London, Edison also has offices in New York, Frankfurt, Amsterdam and Tel Aviv and a presence in Athens, Johannesburg and Sydney. Edison is authorised and regulated by the Financial Conduct Authority. Edison is not an adviser or broker-dealer and does not provide investment advice. Edison’s reports are not solicitations to buy or sell any securities. For more information, please contact Edison: Sara Welford +44 (0)20 3077 5700 consumer@edisongroup.com Russell Pointon +44 (0)20 3077 5700 consumer@edisongroup.com Learn more at www.edisongroup.com and connect with Edison on: LinkedIn https://www.linkedin.com/company/edison-group-/ Twitter www.twitter.com/Edison_Inv_Res YouTube www.youtube.com/edisonitv Dissemination of a CORPORATE NEWS, transmitted by EQS Group.The issuer is solely responsible for the content of this announcement. |
1393751 11-Jul-2022
corporate announcement transmitted by DGAP - a service of EQS Group AG. The issuer is solely responsible for the content of this announcement.