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Treatt PLC shares fell on Tuesday after the company reported a sharp fall in profit due to higher costs, despite an increase in revenue.
Shares were down 9.0% at 914.10 pence each on Tuesday morning in London.
Treatt is a Bury St Edmunds-based manufacturer and supplier of extracts and ingredients for the beverage, flavour and fragrance industries.
In the six months to March 31, the company recorded a pretax profit of £6.3 million, down 39% from £10.4 million a year before, as operating expenses rose 9.3% £11.7 million from £10.7 million. Further, the cost of sales rose 21% to £48.1 million from £39.5 million.
Meanwhile, revenue grew 9.0% to £66.3 million from £60.8 million. It attributed this to the post-pandemic re-opening of on-trade channels together, as well as ‘some’ material new business wins.
Treatt declared an interim dividend of 2.50 pence per share, reflecting a 25% increase compared to 2.00p a year before.
Treatt said it ended the first half ‘strongly’ and noted that the momentum has carried over into the second half.
Looking ahead, the company expects its tea, fruit & vegetables and health & wellness categories to deliver both revenue and margin growth in the second half.
It expects revenue growth for the full-year to exceed 15% and anticipates that pretax profit and exceptional items for the current financial year to be in line with the current market consensus of £21.7 million.
In financial 2021, Treatt generated revenue of £124.3 million and a pretax profit of £19.6 million.
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