Treatt interim revenues up 11 per cent
Ingredients manufacturer Treatt plc, saw its UK share price head north after a bullish half-year trading update for the six months to March 31.
The update bore out why the Bury St Edmunds company was crowned Business Weekly’s Business of the Year at a Cambridge ceremony last month. The shares rose 1.51 per cent or 6.15p to 412.12p after Treatt reported revenue growth of a further 11 per cent year-on-year.
The company makes and supplies ingredient solutions for the flavour, fragrance, beverage and consumer product industries.
The revenue increase in the last six months built on a strong result for the financial year ended September 30 in which profit before tax rose by 46 per cent.
The core business categories of citrus, tea and sugar reduction have continued to drive top-line growth with the combined effect of new business wins in the prior year, together with further wins in the current year, beginning to take hold.
The recently enacted Tax Cuts and Jobs Act in the United States is expected to result in a material reduction in the group’s overall tax charge.
Firstly, the reduction in the headline federal income tax rate from 35 per cent to 21 per cent will reduce the current tax rate on the group’s US profits to 24.5 per cent and further reduce the tax rate to 21 per cent for the financial year to September 30.
The board also expects a one-off deferred tax credit of approximately $0.5m (£0.4m). The US tax charge is also likely to be reduced further under the Foreign Derived Intangible Income Tax regime on exports out of the US business. It is expected that the group's overall tax charge will be materially lower than would have been the case under previous US tax law.
CEO Daemmon Reeve said the momentum being delivered via the board’s strategic plan, with its focus on core product categories and key geographical markets, is expected to continue in the second half of the current financial year and beyond.
He added that the board believed profit before tax and exceptional items would be in line with expectations for the full year to September 30, 2018.
• PHOTOGRAPH SHOWS: Treatt CEO Daemmon Reeve