TREATT PLC
FULL YEAR RESULTS
YEAR ENDED 30 SEPTEMBER 2022
Strong platform for growth
Treatt, the manufacturer and supplier of a diverse and sustainable portfolio of natural extracts and ingredients for the beverage, flavour and fragrance industries, announces today its results for the year ended 30 September 2022.
FINANCIAL HIGHLIGHTS1:
| Financial year ended 30 September 2022 | Financial year ended 30 September 2021 | Change | |
| Revenue | £140.2m | £124.3m | +12.8% |
| Gross profit | £39.1m | £42.2m | -7.4% |
| Gross profit margin | 27.9% | 34.0% | -610 bps |
| Profit before tax and exceptional items | £15.3m | £20.9m | -27.1% |
| Profit before tax | £16.2m | £19.6m | -17.5% |
| Adjusted basic earnings per share2 | 19.80p | 27.05p | -26.8% |
| Basic earnings per share | 22.04p | 25.19p | -12.5% |
| Final dividend per share | 5.35p | 5.50p | -2.7% |
| Total dividend per share | 7.85p | 7.50p | +4.7% |
| Net debt | £22.4m | £9.1m | +146.2% |
| Net debt to adjusted EBITDA3 ratio | 1.21x | 0.39x | -208.3% |
| Net debt to EBITDA ratio | 1.16x | 0.42x | -177.1% |
| Adjusted return on average capital employed4 | 11.6% | 20.9% | -930 bps |
| Return on average capital employed | 11.9% | 19.2% | -730 bps |
1 All measures based on continuing operations.
2 Adjusted earnings per share measures exclude exceptional items and the related tax effect, details of which are given in note 7.
3 EBITDA is calculated as operating profit plus depreciation and amortisation. The adjusted measure excludes exceptional items
4 Return on average capital employed is calculated by dividing operating profit before exceptional items (as shown in the Group income statement) by the average capital employed in the business, which is calculated as total equity (as shown in the Group balance sheet) plus net debt or minus net cash (as shown in the Group reconciliation of net cash flow to movement in net debt), averaged over the opening, interim and closing amounts. The adjusted measure excludes exceptional items.
HIGHLIGHTS 1 :
· Strong revenue growth of 13% (9% in constant currency) with sales growth across all product categories, except hard tea
· Coffee now reported as a separate category with sales of £1.1m and encouraging pipeline
· Profit before tax and exceptional items of £15.3m in line with revised Board expectations
· Progressive dividend policy maintained, with proposed total dividend for the year of 7.85p per share, an increase of 4.7%
· Year-end net debt of £22.4m (1.21x closing net debt to adjusted EBITDA3) reflects capital investment in the UK relocation and investment in prudent inventory levels to mitigate supply chain risks (statutory measure: 1.16x closing net debt to EBITDA)
· Vast majority of UK production has transitioned to the new UK facility and UK production capacity will at least double once process is fully completed (anticipated in FY23)
· Improved processes around sales pricing and cost recovery, with new FX management systems implemented
Commenting on the results, CEO Daemmon Reeve said:
“It’s been a mixed year for the business, with a very encouraging sales performance across all product categories, except hard tea, and significant progress building our infrastructure for future growth. We announced some short-term profitability headwinds in August, particularly in hard tea, but have finished the year in line with revised guidance. We have learnt from the disappointments and my belief in our growth potential and determination to succeed is undimmed, driven by the teamwork and commitment to our customers that lies at the heart of Treatt’s culture.
We remain as excited as ever about the pipeline of opportunities for Treatt, with the business now well-invested to fulfil our medium term ambitions. Coffee is an emerging category in its own right, for which we now have a dedicated team in place and high hopes for growth.
In the face of macro challenges, there is a wave of positive change across the business. On the back of a resilient market in natural and healthy products, which plays to our expertise, we are looking forward to the future with optimism.”
Analyst and investor conference call
A conference call for analysts and investors will be held at 09.30 a.m. today, 29 November 2022. For dial-in details, please contact MHP at treatt@mhpgroup.com.
Enquiries:
Treatt plc +44 (0)1284 702500
Daemmon Reeve Chief Executive Officer
Ryan Govender Chief Financial Officer
Joint Broker
Investec Bank plc +44 (0)20 7597 5970
Patrick Robb
David Anderson
Joint Broker
Peel Hunt Plc +44 (0)20 7418 8900
George Sellar
Andrew Clark
Financial PR
MHP +44 (0)20 3128 8339
Tim Rowntree
Simon Hockridge
Catherine Chapman
About the Group
Treatt is a global, independent manufacturer and supplier of a diverse and sustainable portfolio of natural extracts and ingredients for the flavour, fragrance and multinational consumer product industries, particularly in the beverage sector. Renowned for its technical expertise and knowledge of ingredients, their origins and market conditions, Treatt is recognised as a leader in its field.
The Group employs approximately 400 staff in Europe, North America and Asia and has manufacturing facilities in the UK and US. Its international footprint enables the Group to deliver powerful and integrated solutions for the food, beverage and fragrance industries across the globe.
For further information about the Group, visit www.treatt.com .
CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING STATEMENTS
This announcement contains forward-looking statements that are subject to risk factors associated with, among other things, the economic and business circumstances occurring from time to time in the countries, sectors and markets in which the Group operates. It is believed that the expectations reflected in these statements are reasonable, but they may be affected by a wide range of variables which could cause actual results to differ materially from those currently anticipated. No assurances can be given that the forward-looking statements in this announcement will be realised. The forward-looking statements reflect the knowledge and information available at the date of preparation of this announcement and the Group undertakes no obligation to update these forward-looking statements. Nothing in this announcement should be construed as a profit forecast.