Shares in Treatt jumped 21% in early trading on Thursday
Companies: Treatt plc
Shares in Treatt Plc jumped 21% as the market opened on Thursday after the AIM-listed flavour, fragrance and cosmetic ingredients supplier said it believes pre-tax profits will "substantially exceed" previous expectations.
In a trading update for the year ending 30 September 2017, the Suffolk-based small-cap said momentum had "gathered pace" with results for the six months to 31 March 2017 likely to be comfortably ahead of the previous year.
"With the continuing momentum being delivered by our 2020 Strategic Plan, strong revenue growth, and the beneficial impact from higher product margins, the Board now believes that profit before tax for the financial year ending 30 September 2017 will substantially exceed its previous expectations."
The Company said the bumper results were due to strong growth in revenues driven by new business and growth in existing accounts, combined with improved margins.
"All of our key product categories have delivered strong revenue growth since the start of the financial year, with citrus and sugar reduction solutions producing particularly strong performances...
As we enter the seasonally busiest time of the financial year, it is encouraging to see order books for the remainder of the current financial year, and into next year, across the Group materially up on a year ago."
The Group's net debt has increased Yoy, reaching c.£10-12m at the half-year, up from £8m last year. This is primarily due to the impact of higher raw material prices and a strong order book. However, the Board says it is confident in the usual pattern of strong cash inflow in H2, reducing net debt significantly by year end.
Treatt's share price is up 75% in the past year.
