Treatt plc shares rally as update shows “substantial progress”

Shares in Treatt plc (LON:TET) rallied on Thursday, following an optimistic forward-looking report from the company.

The company, which specialises in flavour, fragrance and cosmetic ingredients, published a promising trading update for the year ending September 2017. Treatt anticipates that its growth for the six months to March 2017 will be significantly higher than a year previously. Revenue is currently projected as 20 percent above the same period for March 2016.

Treatt saw strong performance across all their key products, notably in its citrus and and reduced sugar options. Furthermore, Earthoil, the group’s “personal care ingredients: division, also continues to perform well a begin to produce returns on investment.

At the company’s general meeting on Thursday, Chairman Tim Jones commented:

“Although there is obviously still a long way to go, we are confident that we will meet the Board’s expectations for profit before tax for the year ending 30 September 2017.”

Since the AGM trading update on January 27th, the company has benefited from relative stability of the Pound/US Dollar exchange rate, potentially off-seting the expected reversal an FX loss of £500,000 last year.

However, the group’s order book strength and the effect of higher prices for required raw materials did result in an anticipated rise in net debt, which had been expected to fall between £10 million-£12 million for the first half of the year, compared to £8.4 million during the same time a year prior.

Nevertheless, the company remained confident that a strong cash inflow for the remainder of the year would significantly reduce any outstanding net debt.

Treatt’s interim results are set to be published on 9 May 2017, detailing its performance in the six months to end-of-March.

Amid the trading update announcement, shares in Treatt plc rallied as much as 20 percent. As of 13.54PM (GMT) shares are up 20.75 percent.