Approaching Halloween but cut-price sale is no trick for Treatt

It is eight years since Treatt was named Business Weekly's Business of the Year but the markets and its share price have generally plummeted, notably since Daemmon Reeve's departure as CEO in December 2023.

It is estimated that the company paid around £36.9m for its new HQ in Skyliner Way, Bury St Edmunds, which was opened in September 2021. It is said to employ around 374 people globally.

Treatt shares had hit a 52-week high of 570p last December but also sank to a low of 180p during the Summer. Today, largely thanks to the agreed takeover by the ambitious Hartlepool company Natara, they had climbed back to 276.90p.

The increased sale price offered by Natara and accepted by the Treatt board was a welcome relief for the Suffolk company's shareholders but the overall decline in fortunes is tough to erase.

With the wisdom of hindsight Treatt was drowning, not waving, when its full-year forecasts hugely disappointed as recently as July.

On the day of that announcement, Treatt saw 53.50p, or 21.15 per cent, wiped off its UK share price; its stock slumped to 199.50p against a backdrop of macro misery in the US and elsewhere.

It lowered its full-year revenue forecast to between £130m and £135m and profit before tax and exceptionals of between £9m and £11m – against its April guidance of £146m-£153m revenue and £16m-£18m PBTE.

The company said it had continued to face trading headwinds since the announcement of the interim results on May 13 which would blast a hole in the performance for the full year. Treatt flagged a reduction in second half sales, with revenue now expected to be £66m, compared to previous guidance of £82m.

While it had converted several pipeline opportunities, including encouraging wins with new customers in Premium, this conversion had been slower than anticipated, Treatt conceded.

Lower repeat customer volumes were driven by competitive pressures and North American consumer confidence while a weaker dollar exchange rate resulted in a c£0.5m profit headwind as a result of translation of USD profits.

In its interim results, Treatt had drawn attention to ongoing market dynamics affecting the outlook for the year, both of which continued.

Consumer confidence in the US, combined with geopolitical and tariff uncertainty there was already impacting the overall beverage market in North America. This persisted, reflected in extended softening of demand.

News is awaited on whether the new owner will proceed with Treatt's planned opening of a Shanghai innovation centre, due later this year but Treatt said it had 'strengthened its senior teams to add new skillsets and a focus on fresh markets and growth opportunities across the group.'