19th May 2015 08:45
LONDON (Alliance News) - Treatt PLC Tuesday reported growth in profit in the first half of its financial year, driven by an increase in sales, and said it is confident it will meet expectations for the full year as it plans to relocate its Bury St Edmunds plant.
The maker of ingredients for the flavour, fragrance and consumer goods industries, reported a pretax profit in the six months to March 31 of GBP2.8 million, up from GBP2.6 million in the same period a year earlier, boosted by revenue growth of 12% to GBP41.4 million from GBP37.1 million.
Treatt noted that it is making "particularly good progress" in the beverage sector, including the fast-growing craft beer market, as well as in wellness and natural products as demand grows for lower calorie and health-conscious products.
The company added that it has decided to fully relocate its Bury St Edmunds plant, though still within the Bury St Edmunds area, but with new modern and efficient manufacturing and technical facilities. This is because the current plant no longer meets the medium to long-term needs of the business.
Treatt said the site relocation will enable a material increase in its value-added capabilities through greater investment in innovation and research and development, lower cost production, and reduced inefficiencies and maintenance costs, while allowing the company to partner on a much greater scale with global fast-moving consumer goods customers.
It expects the move to cost between GBP15 million and GBP20 million, and said it will enable the company to deliver greater returns for shareholders.
Treatt will pay an interim dividend of 1.28 pence, a 3% increase on the 1.24p paid the year before.
"The third quarter of the financial year has started steadily and with order books up on the prior year, the board remains confident at this early stage of the second half that the group will meet its expectations for the year ending 30 September 2015. Over the remainder of the year, we will continue to develop and evolve our strategy in order to build a stronger, more profitable business for the long term," Chairman Tim Jones said in a statement.
Shares in Treatt were trading up 2.8% at 149.00 pence Tuesday morning.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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