TET has reported FY25 results to 30 September. Revenue of £132.5m and PBT of £10.3m are both slightly above the numbers in the October trading statement (£130.6m and £10.0m respectively). As previously disclosed, FY25 was a challenging year for TET, due in particular to high citrus prices and weak US consumer confidence. Revenue therefore declined by 12% and PBT by 44%.
However, TET believes that it can deliver a year of stabilisation in FY26, with some revenue growth and broadly flat gross and operating margins. We forecast a slight increase in FY26E PBT to £10.5m. FY27 should see some improvement in margins, helped by lower citrus prices. TET will then be able to decide whether to let this flow through to the operating margin or to reinvest. We assume a mix of the two and forecast FY27E PBT of £11.0m.
In a positive development, TET has announced a distribution agreement in Asia with IMCD, a large chemical and ingredients company.
Finally, TET has entered into a “customary relationship agreement” with major shareholder Dohler, which includes it having the right to nominate one candidate to the board of TET. Dohler has nominated Helga Moelschl, who has over 20 years of experience in the industry including at IFF and Givaudan. She is not an employee of Dohler. This strikes us as a constructive move designed to help TET to implement its strategy.
