Treatt is a world-leading manufacturer and supplier of flavour, fragrance and cosmetic ingredients. Our diverse product portfolio is the result of over 125 years of technical expertise and experience in the global sourcing of flavour and fragrance raw materials. Through our cosmetics division, Earthoil, we also offer naturally-derived cosmetic ingredients, specialising in organic and fair trade, reflecting our commitment to ethical and sustainable practices.

http://www.treatt.com/

Fair point Halifax, although this is a somewhat unusual business. Trade receivables/sales ratio only marginal slippage, but big increase in inventories and more rapid payment of trade creditors meant small negative cash flow from operations. Second half is tradtionally stronger and cash will need to be a big focus for them.

Thanks for the info h and P.

Just found this from IC - New business wins and margin improvement

However, the key point for me in the company's interim results for the six months to end-March 2013, which were released today, was the fact that the company has been "winning new business with large multinational consumer goods groups across a wide range of new and existing ingredients". Sales of tea and citrus ingredients have been performing well and the product mix is now increasingly targeted towards added-value manufactured ingredients, which have been the focus of research and development spend. There has been a particular emphasis on the beverage market.

As a result, gross margins improved from 20 per cent to 22.65 per cent in the latest six-month trading period and with the benefit of tight cost control - overheads fell 9 per cent to £5m - operating profits before currency movements soared 55 per cent from £1.65m to £2.55m.

True, revenues fell from £36m to £33.6m, reflecting lower commodity prices, but, importantly, with an increasing amount of sales being made to multinational companies, the momentum from the first half has fed through in the third quarter. Moreover, further cost savings are expected to come through in the second half.



Analyst upgrades

Ordinarily, this upbeat statement would have led to analyst upgrades for the full year to end-September 2013. However, Nicola Mallard at Investec Securities is being cautious and is maintaining her pre-tax estimate at £5m for the 12-month period, to produce EPS of 34.7p, even though first-half pre-tax profits jumped 29 per cent to £2m and EPS soared 40 per cent to 14.1p. From my lens, the risk to forecasts looks to the upside. Still, even on this conservative basis, the shares are only priced on 12.6 times earnings estimates and, with the interim dividend raised 8 per cent to 5.5p, the rolling 12-month yield is 3.6 per cent. The dividend is paid in October and the ex-dividend date is 11 September.

Investec did, though, raise its forecasts for both the 2013-14 and 2014-15 financial years by 8 per cent and 13 per cent, respectively. The new estimates are for pre-tax profits to rise to £5.6m in the 12 months to September 2014, to produce EPS of 38.7p. For the following year, profits are forecast to rise again to £6.1m, to produce EPS of 42.9p. The dividend forecasts are 16.4p a share for the current financial year, 17.2p for 2013-14 and 18.2p in 2014-15. On this basis, the forward dividend yields are 3.7 per cent, 3.9 per cent and 4.1 per cent. Moreover, the prospective PE ratio drops to only 11.2 in 2013-14 and a miserly 10 in 2014-15. That's hardly an exacting valuation for a company that is starting to boost margins by focusing sales on value-added lines and is clearly winning new business by doing so.

Treatt also has a lowly geared balance sheet - net debt of £17m only equates to 62 per cent of shareholders' funds of £26.1m - and has a conservative accounting policy with £12m of property and plant in the accounts at cost.



Share price breakout looms

Interestingly, Treatt's share price is at an interesting juncture, too. In fact, having hit a high of 440p in mid-February, and again in mid-March, the price is now on the verge of signalling a major triple-top breakout on the point-and-figure chart, as well as a swing buy signal.

With full-year earnings forecasts looking conservative, the share price momentum looks well underpinned given the potential for further good news on sales later this year. The next trading update is in mid-August. In my view, on a bid-offer spread of 430p to 440p, the shares are a strong trading buy and my conservative three-month target price is 500p.

dc/Halifax Should perhaps have expanded post 6 to say that main item of stocks is likely to be the commodity orange oil (main business is distillation of this to provide ingredients for use in wide range of industries). Orange oil price varies widely from time to time, so same volume can have big difference in cost from one year to the next (either way). Treatt have been good at managing these price fluctuations and seem to have price agreements with their customers to reflect it - they have been around over 100 years and know what they are doing. For same longevity reason, they have property/plant assets in the books at well below replacement cost, so true net asset position may well be higher than it appears at first galnce.

Thanks p,


Director/PDMR Shareholding


http://www.moneyam.com/action/news/showArticle?id=4594179

Treatt PLC (TET:LSE) set a new 52-week high during Tuesday's trading session when it reached 480.00. Over this period, the share price is up 28.30%.

Trading Statement

RNS


RNS Number : 5956F

Treatt PLC

28 May 2013




28 May 2013



TREATT PLC

TRADING UPDATE FOR YEAR ENDING 30 SEPTEMBER 2013

Treatt PLC (the 'Group'), the manufacturer and supplier of conventional, organic and fair traded ingredient solutions for the flavour, fragrance and consumer goods industries today issues the following trading update for the year ending 30 September 2013.

Following the recent announcement of our half year results, which showed pre-tax profits up 30% and EPS up 40%, momentum in the business has continued to build towards a very strong Q3. We are delighted to report that Group sales for May 2013 are expected to reach an all-time high and order books for the remainder of Q3 and for Q4 now look promising. This positive commercial environment, coupled with the continuing impact of the Board's new strategy, and the lower overheads and improved margins it is delivering, means that the Board expects the Group to exceed its expectations for the current financial year ending 30 September 2013.



Looking further ahead, the strategic creation of a global sales structure, which is clearly focused on selling value-added ingredient solutions with its emphasis on multi-national consumer goods companies, is already leading to significant new opportunities for growth. We are particularly focused on developing new and exciting products for the beverage sector where the possibilities for growing sales are material. The continuing transition of product mix towards added-value manufactured ingredients should enable the Group to target higher margin business. The Board believes that this, coupled with significant cost saving measures, some of which have already been implemented but have not yet delivered their full-year impact, should deliver the long-term sustainable growth in earnings intended.



Consequently, the Board believes that the momentum now in the business and the benefits from the initiatives outlined above will extend beyond the current financial year and that the prospects for the business for the years ending 30 September 2014 and 2015 are also improved.



The Company intends to release its Interim Management Statement for the second half year in July 2013 and the full year results for the current financial year will be announced on 9 December 2013

Excellent trading update. Change of CEO/strategy bearing fruit much quicker than expected. Retain good feel abot these, despite the rise. Pity they are very illiquid to deal. Always dyor.

Treatt: Investec takes target price from 470p to 610p retaining a buy recommendation.

Treatt soars after update
Tue 28 May 2013


Treatt soars after update LONDON (SHARECAST) - Shares of Treatt, an ingredients supplier to the flavour and fragrance industries, soared after it said it expects to exceed company expectations for the current financial year.

The group's shares spiked earlier this month after it revealed a 30% hike in pre-tax profits and a 40% surge in earnings per share. In today's update it said momentum has continued.

Treatt said sales for May 2013 are expected to reach an all-time high and order books for the remainder of the third and fourth quarter now look promising.

"The positive commercial environment, coupled with the continuing impact of the board's new strategy, and the lower overheads and improved margins it is delivering, means that the board expects to exceed its expectations for the current financial year," it said in a company statement.

"Looking further ahead, the strategic creation of a global sales structure, which is clearly focused on selling value-added ingredient solutions with its emphasis on multi-national consumer goods companies, is already leading to significant new opportunities for growth," it added.

Treatt said it would focus on developing new products for the beverage sector where the possibilities for growing sales are 'material'.

It added that momentum now in the business and the benefits from significant cost saving measures will extend beyond the current financial year and that the prospects for the business for the years ending September 30th 2014 and 2015 are also improved.

Its shares jumped 13.33% or 65.00p to 552.50p at 12:30 in London.

Well done here!

Thanks skinny, needs to slowdown.

Investment summary: Appealing flavours

http://www.edisoninvestmentresearch.com/researchreports/Treatt280513QV.pdf

On fundamentals, still not expensive imo. This is a niche little business, historically run as almost as a private company (Bovill family) which just happened to have a listing. New CEO appears more commercially orientated. Improved margins, lower overheads mean that for a manufacturer like this I would think that if they should be capable of at least 10% of revenues in pre tax profit - and possibly more. Sales currently also rising, so not out of the question they will reach £100M in next few years, which would give eps perhaps 65p. Asking quite a lot, maybe, but after holding quite a few years I am not selling mine any time soon. Cash was an issue in the first half and will be scutinised when full year figures come out later in the year. Just hope an opportunistic predator does not come along too soon - Bovill family has said their stake (around 29% in all) is up for sale, but thier expectations must have risen after the last few weeks. Always dyor.

Thanks for the update partridge, very interesting.

Treatt PLC (TET:LSE) set a new 52-week high during today's trading session when it reached 588.00. Over this period, the share price is up 72.82%.Share price forecast




The one analyst offering a 12 month price target expects Treatt plc share price to rise to 610.00 in the next year from the last price of 566.00.

:-))

Covered in this weeks IC- A real Treatt

We didn't have long to wait for shares in Treatt, a world-leading manufacturer and supplier of flavour, fragrance and cosmetic ingredients, to re-rate. IN fact, following two weeks since an upbeat trading statement on 28 May, shares in the company have soared to a record high and have produced a bumper 24% return in the two weeks since IC highlighted the investment. As a result, analyst Nicola Mallard at investec securities has massively upgraded her pre-tax profit estimate for the 12 months to end September from £5m to £6m. On this basis, previous EPS forecasts of 34.7p are lifted to 41.9p. IC has a new fair value target price of 600p, to potentially offer a further 10% upside.

Well done on your short term profit dc. Interesting how strategies differ. I belong to the "buy and hold" school of Buffett, which has stood me in very good stead on the likes of Halma, AG Barr and PZ Cussons. Had an interest in Treatt for over 10 years, collecting decent divis and patiently waiting for it to take off. It is still early days of the new broom CEO, but I bought these for my two sons ISAs last year and told them not to sell for at least ten years! IC target is in my view short term - long term might be a lot better, if they stay independent, but always dyor.

Thank you p. I think the investor who purchased these late 2008 must be very happy now.(Below 180p with a constant climb to the present sp). You have to stick to the strategy that suits you. If only we had a crystal ball.
Very nice to be investing for your sons future and I am sure this company will indeed do very well in the future. I will add any news to the thread to keep investors up to date. Thank you p for your knowledge in this company.