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Treatt Full-year 2007 Results
Posted: December 11, 2007
Treatt plc (Bury St. Edmunds, England) has announced full-year 2007 (ended September 30) revenue of £38.07 million, an increase of 7.5% over 2006. Profit before tax fell 14% to £2.83 million and EBITDA decreased 5% to £4.2 million. Results suffered from poor performance in the United States, in addition to the adverse movement in the value of the US dollar versus sterling.
R.C. Treatt, the Group’s UK operating subsidiary, operated strongly with sales rising 8.1%. It saw growth in both essential oils (particularly to the Middle East) and also global aroma chemical sales. Although Treatt USA increased sales in US dollars by 15%, the sales mix in the year resulted in a significant fall in the gross margin percentage. Grapefruit oil sales remain weak, but there has been more demand for the company’s tea products (part of the Treattarome product range).
At the end of February, Treatt acquired 50% of Earthoil Plantations Ltd. and 50% of Earthoil Kenya Pty EPZ Ltd. for 2.6 million pounds. Treatt has the option to acquire the remaining 50% of the issues share capital of Earthoil from 2012.
Outlook: Despite the weakness of the US dollar, Treatt is expecting sales growth to continue across the broad product range, with strong performance in the Middle East and China. With petroleum prices remaining high, and thereby underpinning many essential oil and aroma chemical prices, the price of the majority of raw materials used by the Group are expected to remain firm or increase. Orange oil prices are expected to remain at relatively high levels for the foreseeable future.