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Treatt's US expansion nearly complete

The ingredients company expects its new site in the US to be fully operational by spring 2019
November 27, 2018

This time last year, ingredients business Treatt (TET) had kicked off its US expansion plan. The latest news is that the North American project is running on time and on budget, ready to complete by the end of 2018 and be fully operational by spring 2019. It includes adding 50,000 sq ft of manufacturing space and 15,000 sq ft of laboratories and offices in Florida. The group hopes this will help it meet existing and future demand, including new business with consumer goods companies targeting sugar reduction.

IC TIP: Hold at 460p

Despite spending money on this US expansion, the company has recovered from a net debt to a net cash position. This was largely thanks to the sale of subsidiary Earthoil Plantations for an enterprise value of £11.3m, and these proceeds will help fund the relocation of Treatt's UK headquarters in Bury St Edmunds, where work is expected to complete by summer 2020. 

Analysts at Investec expect pre-tax profits of £13.1m during the year to September 2019, giving EPS of 17.6p, compared with £12.6m and 17.4p in FY2018.

TREATT (TET)   
ORD PRICE:460pMARKET VALUE:£269m
TOUCH:451-464p12-MONTH HIGH:508pLOW: 388p
DIVIDEND YIELD:0.8%PE RATIO:21
NET ASSET VALUE:140pNET CASH:£10.1m
Year to 30 SepTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
2014795.57.73.84
2015867.811.64.04
2016888.811.94.35
201710111.718.33.35
201811211.521.63.50
% change+11-1+18+4
Ex-div:7 Feb   
Payment:21 Mar