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/

Splendid results and well received placing to raise over £21M at 410p to help with expansion plans both here and in USA. Their focus on natural citrus, tea and sugar reduction solutions is well ahead of original plan and the story may still have a long way to go. I hope to enjoy the ride in my ISA. Always dyor.

Trading Update
RNS
RNS Number : 8730J
Treatt PLC
05 April 2018



5 April 2018

TREATT PLC
("Treatt" or "the Group")

Trading Update for the half year ended 31 March 2018

Treatt, the manufacturer and supplier of innovative ingredient solutions for the flavour, fragrance, beverage and consumer product industries today publishes a trading update for the half year ended 31 March 2018.

The Board is pleased to confirm that following a strong result for the financial year ended 30 September 2017 in which profit before tax increased by 46%, the business has continued to perform well in the current financial year with revenue for the six months ended 31 March 2018 up by approximately 11% compared to the same period in the prior year.

The core business categories of citrus, tea and sugar reduction have continued to drive top-line growth with the combined effect of new business wins in the prior year, together with further wins in the current year, beginning to take hold.

Whilst the Group has in place a hedging strategy to try to ensure that the impact of exchange rate movements is broadly neutral to the income statement over the course of a financial year, as has been experienced previously, there can be material effects over shorter periods of time. In the first half of the current financial year ("H1 2018") there was a weakening in the USD/GBP exchange rate and as a result the Board anticipates that there will be a small negative net FX impact on the H1 2018 results of approximately £0.2m.

The recently enacted Tax Cuts and Jobs Act in the United States is expected to result in a material reduction in the Group's overall tax charge. Firstly, the reduction in the headline federal income tax rate from 35% to 21% will reduce the current tax rate on the Group's US profits to 24.5% and further reduce the tax rate to 21% for the financial year ending 30 September 2019. In addition, the Board expects a one-off deferred tax credit of approximately $0.5m (£0.4m). The US tax charge is also likely to be reduced further under the Foreign Derived Intangible Income Tax regime on exports out of the US business. The Group will continue to work through the full impact of these changes as further guidance becomes available, but it is expected that the Group's overall tax charge will be materially lower than would have been the case under previous US tax law.

Outlook
The momentum which is being delivered by the Board's Strategic Plan, with its focus on core product categories and key geographical markets, is expected to continue in the second half of the current financial year and beyond. The Board therefore continues to believe that profit before tax and exceptional items will be in line with its expectations for the financial year ending 30 September 2018.

The Board expects to announce Treatt's half year results for the six months ended 31 March 2018 on 8 May 2018.

MIDAS SHARE TIPS UPDATE: Sugar tax is a Treatt for our specialist food tip
By Joanne Hart, Financial Mail on Sunday
Published: 21:50, 7 April 2018 | Updated: 11:25, 8 April 2018

Fizzing: Treatt's products are in many drinks
On Friday the sugar tax came into force putting up the price of most fizzy drinks in the UK.
The idea behind the tax is to reduce obesity by encouraging consumers to buy fewer sugary drinks and encouraging soft drinks manufacturers to use less sugar.
Whether the tax will have the desired effect could take years to determine, but it plays into the hands of Daemmon Reeve, chief executive of specialist ingredients group Treatt.



Reeve has worked at Treatt since 1991 so he knows the business inside out. Midas first recommended the stock in June 2014, when the price was 158.5p.
Today, the shares are 412p and they are likely to increase further this year and beyond.
Treatt's history dates back to the Victorian era, when the firm was founded by essential oils trader Richard Treatt.
The business has evolved over the years, but retained a trading slant until relatively recently.
Today, however, the group does not just buy and sell ingredients, such as spices, oils and flavourings.
Instead, it works with multinational groups to help them create innovative tastes and beverages using high quality, sustainably sourced, raw ingredient
The company is particularly focused on citrus drinks, flavoured iced teas and natural ingredients that can be used as sugar substitutes.
Its products can be found in beverages in almost every supermarket and bar in this country, it has a strong presence in the US and it is beginning to expand in China and India too.
Reeve and his team are highly optimistic about the outlook, so much so that they are building a brand new, expanded operation in Bury St Edmunds, Suffolk, and a larger facility in the US.
The firm delivered a confident trading update last week, saying figures for the year to September would be in line with market expectations.
The weak dollar put a slight dent in first half profits but that should even out over the full year and the group will benefit from President Trump's recently introduced tax cuts.
Analysts are upbeat, predicting profits of £13.2 million for the year to September 2018, rising to £13.8 million the following year. A dividend of 5.1p is pencilled in for the current year, rising to 5.4p next year.
Midas verdict: Consumers are being warned against the evils of sugary drinks but they still want tasty beverages, both soft and alcoholic.
Treatt helps firms satisfy those needs. It has delivered the goods over the past four years and should continue to do well.
Shareholders may choose to sell up to 25 per cent of their stock to bank some profit but should retain the bulk of their holdings. New investors may also find long-term value in these shares.

Excellent set of interims today and disposal of non core Earthoil Plantations an added bonus. Sugar reduction, tea and citrus product lines all appear on a roll. US factory expansion should complete later this year and if they can build new UK facility on time and to budget by the end of next year the future will look even brighter. Could still have along way to go, but always dyor.

Final results


OPERATIONAL HIGHLIGHTS:
· 2022 strategic growth plan on track
· Won significant new business with global FMCG companies through our continued focus on the key growth drivers of citrus, tea and sugar reduction solutions
· Material advances made on our capital investment programme:
o US expansion project on time and on budget and expected to be completed in 2018 and fully operational in Spring 2019
o UK relocation at advanced stages of design optimisation and progressing well
· Successful disposal of non-core subsidiary, Earthoil Plantations, for enterprise value of £11.3m

Commenting on the results, CEO Daemmon Reeve said:
"I am delighted to report another year of strong growth for Treatt. Last year's performance set the bar high, so I am delighted to report that Treatt's teams from across the business have built upon that performance and secured further success in the year.
"The Group has had a steady start to the new financial year with a number of attractive opportunities in our pipeline of projects with both existing and new customers. We are well placed to capitalise on these opportunities with our capacity expansion in the US expected to complete in the coming weeks. Whilst still early in the financial year, the Group continues to perform in line with the Board's expectations for the full year."