Treatt warns on profits, shares dive

(Sharecast News) - Shares in Treatt plunged on Thursday, after the extracts and ingredients specialist warned on profits following a tough first half. Updating on trading, the group - which supplies the beverage, flavour and fragrance industries - said it had been hit by lower demand, weaker consumer confidence and higher costs.

In particular, "sustained" high citrus prices affected demand in its heritage unit, while softer consumer confidence in the US weighed heavily on the North American beverage market.

As a result, first half revenues fell to £64.2m from £72.1m, while profits before tax and exceptionals slid to £3.6m from £7.6m, prompting Treatt to cut its full-year guidance.

It now expects revenues to come in between £146m and £153m, and pre-tax profits before exceptional items between £16m and £18m.

In the year to 30 September 2024, Treat posted pre-tax profits before exceptional items of £19.1m on revenues of £153.1m.

As at 0945 BST, shares in Treatt had lost more than a quarter of their value, down 26% at 237p.

David Shannon, chief executive, said: "Treatt made meaningful strategic progression in the first half.

"While we are disappointed by the impact on profitability of predominantly short-term trading challenges, we are encouraged by our robust order book and sales pipeline, and expect to realise the benefit of self-help measures within the second half.

"We are confident in the medium-term outlook."

Treatt is due to post results for the six months to 31 March on 13 May.