Bury St Edmunds-based Treatt reports improved first half profits

Treatt group chief executive Daemmon Reeve.

Treatt group chief executive Daemmon Reeve. - Credit: Archant

Flavours and fragrances specialist Treatt has reported improved first-half profits as its strategic move towards value-added products continues to gain ground.

The Bury St Edmunds-based firm said that operating profit for the six months to March 31 grew by 12% compared with last year's first half to £3.7m, with profit before tax and exceptional items 15% higher at £3.4m.

Revenues for the period dipped by 1% to £40.9m, which Treatt said relected a change in product mix as it continued to reposition itself further up the 'value chain'.

Treatt, currently based in Western Way, Bury, manufactures flavour and fragrance ingredients for the food, drink and personal care products sectors, and is increasingly working with clients on the development of bespoke solutions as part of a strategy to improve margins and earnings.

Chief executive Daemmon Reeve said: 'The excellent work from our talented and driven teams continues to deliver success as we evolve our business in line with our strategy.

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'I am pleased that we are both delivering increased profits to our shareholders and putting in place the levels of investment and planning needed to secure Treatt's long term future as a leading global player in our chosen markets.'

Treatt added that the first half figures included a short-term foreign exchange loss of around £600,000 due to adverse movement in the sterling-US dollar exchange rate, but that its hedging strategy should result in a 'broadly neutral' foreign exchange impact over the year as a whole.

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The company has declared a 5% increase in its interim divident to 1.35p per share, representing around one third of the previous year's total and inline with the board's established policy.

There was no definite news in today's update on Treatt's previously-announced plans to relocate its headquarters to a new purpose-facility within the Bury area.

Treatt has not confirmed details of its planned new location, but it is understood to involve part of a 14-hectare site to the east of Moreton Hall, one of 10 parcels of land forming the new Norfolk and Suffolk Enterprise Zone.

The company said today: 'We can report that behind the scenes a great deal of work is on -going in relation to the proposed site relocation in the UK.

'This is a significant project for the group which is designed to propel the organisation forward for the foreseeable future and we are currently in negotiations with landowners. We will therefore continue to update shareholders as matters progress over the coming months.'

Looking ahead, it added: 'The third quarter of the financial year has begun well. Looking at the year as a whole, as the first quarter was materially better this year than last year, we expect the full year results to show a more even split between the first and second halves of the financial 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 2016.'

In December, Treatt reported an operating profit of £8.7m for the year to September 30, an increase of 14% on the previous year, and an adjusted pre-tax profit of £8m, up 15%m. Revenues were 9% higher compared with the previous 12 months at £85.9m.

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