More than 21 per cent shaved off Treatt stock as finances take a hammering

A hang-dog trading update saw its stock slump to 199.50p against a backdrop of macro misery in the US and elsewhere.

Treatt now expects full-year revenue of between £130 million 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 says it has continued to face trading headwinds since the announcement of the interim results on May 13 which will blast a hole in the performance for the full year. Treatt reports a reduction in second half sales, with revenue now expected to be £66m, compared with previous guidance of £82m. 

While it has converted several pipeline opportunities, including encouraging wins with new customers in Premium, this conversion has 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 drew attention to ongoing market dynamics affecting the outlook for the year, both of which have continued.

It reports lower demand in Heritage from sustained high citrus oil prices affecting buying patterns, and leading to reformulation. Although citrus oil prices have started to reduce more recently, this has continued to impact both short-term buying patterns in value added citrus products and citrus margins. Treatt expects a reduction of this adverse impact as citrus oil pricing normalises.

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

Management says it remains upbeat and Treatt continues to execute its strategy: it remains committed to driving revenue growth through customer centricity, reach expansion and innovation, as demonstrated by the planned opening of a Shanghai innovation centre later this year. It has also strengthened its senior teams to add new skillsets and a focus on fresh markets and growth opportunities across the group.

Treatt says the sales pipeline has strengthened during the year and added that the company continued to be focused on revenue opportunities and better margins in FY 2026 and beyond.