Ingredients group Treatt upgraded its full-year revenue guidance on Monday following a strong start to the year.
The company, which supplies the beverages, flavour and fragrance industries, saw revenues jump 9% in the six months to 31 March, to £66.3m.
Operating profits fell to £6.6m from £10.6m a year previously, while adjusted earnings per share were 8.21p compared to 12.93p at March-end 2021. Pre-tax profits fell to £8.95m from £9.68m.
The company attributed the decline in profits to tough comparisons, after the first half of 2021 was boosted by “Covid-19 related retail channel growth” and a number of major product launches.
It added that the first half of the current year had finished “strongly”, and that momentum had carried on into the current half. The order book is currently ahead 25%.
As a result, the firm now expects full-year revenue growth to exceed 15%, while pre-tax profits remained on track to meet consensus forecasts for £21.7m.
Daemmon Reeve, chief executive, acknowledged that the company faced “supply chain and other macro headwinds”.
But he continued: “Branded beverages are seen as affordable luxuries, and so we are well insulated against rising inflationary pressures. Our strong order book gives us confidence that we are on track to perform in line with expectations for the full year.”
Sara Welford, director of consumer at Edison Group, said: “While’s Treatt’s full-year revenue outlook has been upgraded, profit expectations remain unchanged as the company continues to invest for the future.
“As per pervious guidance, the second half is expected to witness higher revenue growth than the first, and higher margins, thus reverting to a more normal first half-second half split following two years distorted by the implications of lockdowns.”
As at 0945 BST, shares in Treatt were off 8% at 922.24p.
