Treatt said it was trading strongly after first-half revenue rose 14% supported by a trend toward healthier living during the pandemic.
The ingredients supplier said it expected revenue to rise to £60.8m in the six months to the end of March from £53.6m a year earlier. In constant currency revenue rose by about 16%. Treatt stuck to guidance issued in January when it said annual profit would easily beat expectations.
First-half revenue was driven by rapid growth in high-margin categories of tea, health and wellness and fruit and vegetables, Treatt said. As a result profit margins have expanded, the company added.
Treatt shares rose 2.3% to 980p at 08:23 GMT. The shares have gained 90% in the past year.
The company produces food ingredients and fragrances for products such as drinks and household cleaners. The company has performed well during the Covid-19 crisis as demand has increased for herbal teas and other wellbeing-related products as well as ingredients for cleaning products.
Treatt said it won significant new business in the first half across a wide range of drinks and flavours, including alcoholic seltzers which are increasingly popular in the US and taking off in other countries. The company’s citrus business, which was a drag on performance, has returned to modest growth, it said.
April is on track to be another strong month and second-half performance should be bolstered by increased demand as hospitality venues, including sports stadiums, reopen, Treatt said.
Daemmon Reeve, Treatt’s chief executive, said: “Performance across the group continues to be very strong despite the ongoing global Covid-19 related restrictions. These measures continue to impact our customers in global hospitality industries and whilst the outlook is promising, we are taking a conservative approach and will assess how our order book progresses in the coming weeks and months. The success we have had in diversifying the group’s flavour and fragrance expertise across a wide range of categories has helped our resilience over the period.”
