Treatt - Another strong update
Treatt has again delivered a strong performance across all its categories, with revenue expected to grow 16% at constant currency for H1. As flagged in the January trading update, the business is performing extremely well: its categories are meeting consumer demands for more natural, clean-label products and Treatt has won significant new business across a range of applications. Gross margin has expanded due to higher growth in the higher-margin categories of tea, health & wellness, and fruit & vegetables, and Treatt’s transition to more sophisticated citrus products. Citrus revenue returned to modest growth after a decline in FY20. The new UK facility is opening in April 2021 with commissioning of the machinery later in the calendar year, as planned. We leave our estimates unchanged at this stage, but believe the risk is firmly to the upside, given the positive momentum in the business.Treatt is engaged in the manufacture and supply of ingredient solutions for the flavour, fragrance, beverage and consumer product industries.
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