It perhaps wasn't these performance numbers from fragrance and flavour ingredients maker Treatt (TET) that sent shares down 5 per cent, but news that management is looking to spend up to £31m over the next two to three years moving its headquarters. According to chairman Tim Jones, the 45-year-old Bury St Edmunds site is a little dated and relocation will help drive innovation. But it does mean that the group has had to postpone some long-term projects to improve its manufacturing capabilities until after the move.
Revenue growth remained pretty slow in the reported period, but by focusing on what management sees as value-added products, gross margins moved up from 22.1 per cent to 23.2 per cent. These products include sugar-reducing ingredients, which have captured the attention of US and European beverage makers, and new citrus flavours winning new customers in China and South America.
After stripping out £0.6m of exceptional costs, pre-tax profit rose 11 per cent to £8.8m. This has given broker Edison confidence to upgrade forecasts for the year to September 2017. Pre-tax profit is expected to be £10.2m (£9.6m in FY2016), giving EPS of 15.1p.
TREATT (TET) | ||||
|---|---|---|---|---|
| ORD PRICE: | 254p | MARKET VALUE: | £132m | |
| TOUCH: | 250-258p | 12-MONTH HIGH / LOW: | 269p | 161p |
| DIVIDEND YIELD: | 1.7% | PE RATIO: | 21 | |
| NET ASSET VALUE: | 71p | NET DEBT: | 4% | |
| Year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 74.0 | 4.5 | 30.0 | 15.50 |
| 2013 | 74.1 | 5.1 | 6.8 | 3.70 |
| 2014 | 79.2 | 5.5 | 7.7 | 3.84 |
| 2015 | 85.9 | 7.8 | 11.6 | 4.04 |
| 2016 | 88.0 | 8.3 | 11.9 | 4.35 |
| % change | +2 | +7 | +2 | +8 |
Ex-div: 16 Feb Payment: 23 Mar | ||||
