29th Jul 2014 11:34
LONDON (Alliance News) - Ingredients company Treatt PLC Tuesday said it traded in line with expectations in the third quarter, and is on track to meet its expectations for the full-year.
The manufacturer and supplier of flavour, fragrance and cosmetic ingredients said its order book is materially higher than this time last year, and expects year-end inventory levels to be around GBP3 million to GBP4 million higher than previously expected.
"The raw material costs of a number of key ingredients (particularly orange, lemon and lime oil) are currently high relative to historical levels," Treatt said in a statement.
Treatt said the impact of higher key raw material prices "may present some challenges" in terms of maintaining margins over the coming year.
The group also said currency moves, specifically sterling strength, will wipe around GBP0.3 million off of its profit for the current financial year.
"Due to the FX hedging policies which are in place, the impact on the reported results for the current year will not be material and will largely relate to the re-translation of Treatt USA's profits at a weaker USD/GBP rate as compared with last year," it added.
Earlier this year, the group said that revenue growth in the first-half was being driven strong sales growth in the Rest of Europe region and notably in the Americas, where demand was fuelled by the current trend in the US for vegetable-based and calorie-reduced drinks.
"With results remaining on track for the current year, the board remains confident that the group is on course to meet its expectations for the current financial year ending 30 September 2014," the company said in its statement Tuesday.
Treatt said that due to increasing demand in Kenya, it will now double Earthoil's capacity in Kenya in mid-2015 for the production of natural oil-based personal care ingredient products.
Earthoil is the group's personal care division which specialises in organic and fair trade ingredients.
The company said it will announce its full-year results on December 9.
Treatt shares were down 1.5% at 161.00 pence Tuesday early afternoon.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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