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11 April, 2022 - 10:56 By Tony Quested

Citrus adds juice to Treatt revenues

Natural extracts manufacturer Treatt plc grew revenues by nine per cent to £66.3 million in the half-year to March 31 despite the cost of moving into a new HQ, foreign currency headwinds and global market vagaries.

Trading in general for the full year is in line with expectations according to CEO Daemmon Reeve, who added that recruitment of skilled staff was continuing as the group exploited long-term growth opportunities.

He said revenue growth had been driven by Treatt's largest category, citrus, as it built on a strong market position in this market.  

Following an unusually strong H1 in FY21, driven by a shift in demand from on to off trade caused by COVID-19, FY22 has returned to more normal spring/summer beverage consumption seasonality. As a result both margins and profits are expected to be materially H2 weighted, the company reports.

Revenue in synthetic aroma and herbs, spices & florals – two of the group's larger categories – grew strongly in first half.

Good progress continued in Treatt's higher margin healthier living categories of tea, health & wellness and fruit & vegetables; materially stronger performance is expected from these categories in H2, as evidenced by a good pipeline.

Reeve said the group continued to win fresh business with both new and existing customers through direct sales to global and local FMCG brands, as well as indirectly through the flavour and fragrance houses, demonstrating the strength of Treatt's diverse business model. 

Further significant progress was also made with building out the group's coffee platform which is focused on the premium ready-to-drink and cold brew coffee markets, where Treatt continues to see material growth in the opportunity pipeline.

The new UK facility at Suffolk Park in Bury St Edmunds is now fully open for office-based employees as well as some of Treatt’s R & D and technical teams.

The operational commissioning continues apace and most of Treatt’s manufacturing is expected to be up and running by the middle of this calendar year. 

There will be a final phase of gradually transferring the most complex manufacturing activities to the new site by the middle of 2023. Treatt says this site, along with its recently expanded US facility, will provide the business with a much stronger platform to support its growth ambitions.

Reeve said: “After a record performance for the business last year, we've continued the momentum into the first half with a good sales performance, particularly driven by our largest category, citrus, where we have grown a number of longstanding relationships working with some of the biggest beverage companies.

“This year's performance is expected to reflect a reversion to more normalised beverage trends and overall trading continues in line with the Board's expectations. 

“Despite the wider macro uncertainties, our second half pipeline is strong, we are bringing more of our new UK site into operation and we are seeing good opportunities across a number of categories, so remain confident for the future.”

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