Full-year results for ingredients company Treatt (TET) were accompanied by news of a proposed 5.3m share placing priced at 410p apiece, for which chief executive Daemmon Reeve said there was “strong demand”. The £21.6m management are hoping to raise will be used to fund expansion plans in the US, along with the relocation and upgrade of its UK manufacturing site. To supplement the fundraising, Treatt has taken out an $11m (£8.31) loan for construction plans in the US and a £15m line of credit in the UK. Together, this additional financing should help improve capacity and efficiency both at home and state-side.
Treatt is benefitting from the shift in consumer tastes for lower calories and sugar, as its products help other companies reformulate their own. This demand helped boost operating profit up by 44.6 per cent over the financial year to £13.8m, although a 130 basis point improvement in gross margins to 24.5 per cent also played a part.
Analysts at Investec are waiting for the result of the shareholder vote, on 18 December, on the share placing before updating forecasts, but had previously expected pre-tax profits of £13m in the year to September 2018, giving EPS of 18p.
| TREATT (TET) | ||||
| ORD PRICE: | 449p | MARKET VALUE: | £234m | |
| TOUCH: | 446-450p | 12-MONTH HIGH: | 524p | LOW: 237p |
| DIVIDEND YIELD: | 1.1% | PE RATIO: | 25 | |
| NET ASSET VALUE: | 89p | NET DEBT: | 21.9% | |
| Year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 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 | 8.8 | 11.9 | 4.35 |
| 2017 | 109.6 | 12.9 | 18.3 | 4.80 |
| % change | +25 | +46 | +54 | +10 |
| Ex-div: | 8 Feb | |||
| Payment: | 22 Mar |
