Treatt PLC's half-year revenue and its adjusted earnings rose during the six months ended March 31, 2014, marking the second year in succession during which first half profits have grown materially year over year.
Key figures include:
- Revenues for the six months up 11% to £37.1 million (H1 2013: £33.6 million)
- Adjusted EBITDA up 27% to £3.8m (H1 2013: £3.0m)
- Adjusted profit before tax rose by 39% to £2.8m (H1 2013: £2.0m)
- Adjusted basic earnings per share increased by 37% to 3.87p (H1 2013 restated2: 2.82p)
- Interim dividend raised by 13% to 1.24p (2013 interim dividend restated2: 1.10p)
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Commenting on the results, Group CEO Daemmon Reeve said: “We continue to focus our efforts on long term success. Our strategy is gaining good traction and, coupled with the effort and focus of our teams across the globe, the results are both translating into profits today and laying the groundwork for opportunities tomorrow.”
Statement from Tim Jones, chairman:
I am pleased to report that the Group has made a solid start to the year, reporting first half adjusted1 EBITDA up by 27% to £3.8m (2013: £3.0m) and adjusted profit before tax increasing by 39% to £2.8m (2013: £2.0m). This has resulted in adjusted earnings per share rising by 37% to 3.87 pence per share (2013 restated2: 2.82 pence per share).
There was an increase in net debt of £3.1m in the period (2013: £3.4m increase) which is accounted for by an increase in inventory values across the Group, partly as a result of higher prices for a number of key raw materials such as orange, lemon and lime oil, and also to support the increased order book. It is usual for there to be a material cash outflow in the first half of the year and we remain comfortably within our borrowing facilities.
The Board has consequently declared an increase in the interim dividend of 13% to 1.24 pence per share (2013 restated2: 1.10 pence per share), being approximately one third of last year’s total dividend. The interim dividend will be payable on 17 October 2014 to all shareholders on the register at close of business on 12 September 2014.
Whilst this is the second year in succession during which first half profits have grown materially year on year, it is important to emphasise that the Group’s profits remain seasonally biased towards the second half. The more important aspect of the first half has been the continuing focus of the Group on building stronger and deeper foundations for long term success. This is being delivered through the on-going focus on product innovation, added-value manufacture and by partnering with those customers with whom we can develop significant, long-lasting relationships. Earthoil, the Group’s personal care division which specialises in organic and fair trade ingredients, has also continued to perform well.
As we adapt our business to execute the Group’s long term strategic objectives, we are doing so whilst retaining and building on the core competencies which have served our business well for many years. We have a long history of global procurement of our raw materials, which helps us to manage the impact of unseasonal weather patterns on crop yields. Over the first half of the year, for example, lemon crops in Argentina have been severely affected by unseasonal droughts and frosts. The Group is also placing greater emphasis on new product development and technologies than it has done before. This has already resulted in encouraging new business wins, especially in our US markets where, for example, we are innovating to support the trend for vegetable-based and calorie-reduced beverages. These, together with other initiatives, will support the Group in one of its primary aims of moving up the value chain.
Our people who work across the globe take a strong pride in servicing our customers’ needs and are ever mindful of how important this is for the Group in order to achieve long term sustainable growth in profits. It is they who make Treatt successful and I would just like to say thank you to our colleagues wherever they may be based in the world for their hard work and commitment over the last six months.
Prospects
The third quarter of the financial year has started steadily. With order books up on prior year, the Board remains confident at this early stage of the second half that the Group will meet its expectations for the year ending 30 September 2014, whilst at the same time continuing to build the foundations for success over the decade to come.
