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TET Treatt Plc

426.00
-1.00 (-0.23%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Treatt Plc LSE:TET London Ordinary Share GB00BKS7YK08 ORD 2P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  -1.00 -0.23% 426.00 427.50 433.00 436.00 421.50 425.00 87,027 16:35:16
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Chemicals & Chem Preps, Nec 147.4M 10.94M 0.1809 23.71 259.43M

Treatt PLC Half-year Report (5184E)

09/05/2017 7:00am

UK Regulatory


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TIDMTET

RNS Number : 5184E

Treatt PLC

09 May 2017

TREATT PLC

HALF YEAR RESULTS

SIX MONTHSED 31 MARCH 2017

A strong set of half year results - revenue growth of 27% and adjusted EPS growth of 63%

Treatt Plc (the 'Group'), the manufacturer and supplier of innovative ingredient solutions for the flavour, fragrance, beverage and consumer products industries, announces its half year results for the six months ended 31 March 2017.

HIGHLIGHTS of our half year:

   --    Revenues for the six months increased by 27% to GBP51.8 million (H1 2016: GBP40.9 million) 
   --    Operating profit increased by 59% to GBP5.9m (H1 2016: GBP3.7m) 
   --    Adjusted* profit before tax rose by 63% to GBP5.5m (H1 2016: GBP3.4m) 
   --    Adjusted* basic earnings per share increased by 63% to 7.69p (H1 2016: 4.72p) 
   --    Interim dividend per share raised by 7% to 1.45p (2016 interim dividend: 1.35p) 
   --    All key product categories performing well 

-- Group's strategic focus on innovative citrus, tea and sugar reduction categories proving to be key growth drivers

Commenting on the results, Group CEO, Daemmon Reeve, said:

"These are a great set of half year numbers for which our staff deserve huge credit. The quality and frequency of new business wins is gaining good momentum, and through the dedication and skill of our colleagues we are on course to meet our 2020 targets some three years ahead of schedule. With the investments planned in the UK and the US we will be able to build on these successes as we look towards the next exciting steps of our journey."

Notes:

* All adjusted measures exclude exceptional items in the prior year - see note 7 to the financial statements.

Enquiries:

   Treatt plc                             +44 (0)1284 702500 
   Daemmon Reeve             Chief Executive Officer 
   Richard Hope                     Finance Director 

Brokers

Investec Investment Banking

   Patrick Robb                      +44 (0)20 7597 5970 

David Anderson

Alex Wright

Public relations

Davidson Ryan Dore

   Lawrence Dore                 +44 (0)20 3865 5971 

HALF YEAR RESULTS STATEMENT

Introduction

I am very pleased to report another strong set of half year results with the Group's adjusted* profit before tax of GBP5.5m for the half year ended 31 March 2017 being 63% higher than the GBP3.4m reported for the comparable period last year. To put this into perspective, the Group's adjusted* profit before tax for the full 12-month period ended 30 September 2012 was GBP5.1m.

During these first six months of the financial year all key product categories performed well, with the Group's strategic focus on innovative citrus, tea and sugar reduction categories proving to be the principal drivers of our growth. Other areas, such as aroma and high impact chemical flavour solutions, have also performed well. We are further pleased to report that our approach to building our market in China is showing early signs of success with revenue there growing by 43% compared with the first six months of our last financial year. Earthoil, the Group's personal care ingredients business, also performed strongly, with revenue growth of 21%.

Financial review

The Group's increase in adjusted* profit before tax has been driven by strong revenue growth of 27% to GBP51.8m (2016 H1: GBP40.9m) as a result of new business wins and growth with existing customers. Margins have also risen as we continue to move up the value chain with gross profit increasing by 29% to GBP12.4m (2016 H1: GBP9.6m). The increases in revenue and gross profit are the result of strategic focus on our core product categories together with the impact of foreign exchange movements. Adjusted* operating profit has similarly increased by 59% to GBP5.9m (2016 H1: GBP3.7m) and adjusted* basic earnings per share of 7.69p are up by 63% (2016 H1: 4.72p).

The effect of foreign exchange has been materially positive during this first half. The Group has a hedging strategy in place which aims to ensure that the impact of significant exchange rate movements on the income statement over the course of a full financial year is mitigated as far as possible. However, the US Dollar's relative strength against Sterling over a prolonged period has positively affected Group revenue by GBP3.0m (6% of Group revenue) and profit before tax by GBP0.8m (15% of Group profit before tax).

With certain key raw material prices remaining at historically high levels, combined with the strength of the order book, inventories increased by GBP10.4m to GBP40.4m over the period. Consequently, net debt increased from GBP1.7m to GBP8.0m, a figure slightly lower than the GBP8.4m reported for the comparable period last year and somewhat lower than anticipated due to the timing of payments. As mentioned in previous announcements, the Group historically reports a net trading cash outflow in the first six months of our financial year and a net trading cash inflow in the second half; the Board continues to expect a similar pattern in the current financial year. Our absolute level of debt remains low and we continue to operate comfortably within our borrowing facilities with unutilised headroom in existing borrowing facilities of GBP16.4m as at 31 March 2017.

Investing for the future

The Suffolk Business Park in Bury St Edmunds has now received outline planning consent and, having exchanged contracts on our new ten acre site at the Park last December, we remain on course to transition the UK business to the Park in late 2019.

Meanwhile, our US business has continued to grow significantly during the period. Treatt USA moved to its existing 15-acre site, which we own outright, in 2002, and as notified previously, its capacity now needs to expand not only to meet greater client demand for our products but also to enhance our technical capabilities and office facilities. This work will commence within the current financial year and is estimated to cost approximately $11m - $14m.

Dividend

The Board has declared an increase to the interim dividend of 7% to 1.45 pence per share (2016 interim dividend: 1.35 pence per share) which represents approximately one-third of the previous year's total dividend in line with our current policy. As previously announced, the timing of the interim dividend payment has been permanently brought forward and will now be payable on 17 August 2017 to all shareholders on the register at close of business on 14 July 2017.

Prospects

The strong performance for the Group in the first half of the year has continued into the third quarter with Group order books remaining materially higher than this time last year as the benefit of some significant new business wins continues to show through.

Whilst there is still much to do to complete the year, and unexpected exchange rate movements can impact results, the Board is currently confident that the Group will meet its revised expectations for the financial year ending 30 September 2017.

TIM JONES

Chairman

8 May 2017

Notes:

* All adjusted measures exclude exceptional items in prior years.

 
 
 
 CONDENSED GROUP INCOME STATEMENT 
 for the six months ended 31 March 2017 
 
                                          Six months    Six months 
                                                  to            to        Year to 
                                            31 March      31 March   30 September 
                                                2017          2016           2016 
                                         (unaudited)   (unaudited)      (audited) 
                                 Notes       GBP'000       GBP'000        GBP'000 
 
 
 Revenue                           6          51,788        40,893         88,040 
 Cost of sales                              (39,404)      (31,271)       (67,639) 
------------------------------  ------  ------------  ------------  ------------- 
 
 Gross profit                                 12,384         9,622         20,401 
 Administrative expenses                     (6,471)       (5,905)       (10,852) 
 
 Operating profit                              5,913         3,717          9,549 
 Net finance costs                             (420)         (338)          (703) 
 
 Profit before taxation and 
  exceptional items                            5,493         3,379          8,846 
 Exceptional items                 7               -         (218)          (553) 
 
 Profit before taxation                        5,493         3,161          8,293 
 Taxation                          8         (1,483)         (932)        (2,144) 
 
 Profit for the period attributable 
  to owners of the Parent Company              4,010         2,229          6,149 
 
 Earnings per share 
 Basic                             9           7.69p         4.31p         11.85p 
 Diluted                           9           7.50p         4.26p         11.68p 
 Adjusted basic                    9           7.69p         4.72p         12.84p 
 Adjusted diluted                  9           7.50p         4.67p         12.65p 
------------------------------  ------  ------------  ------------  ------------- 
 
 
 All amounts relate to continuing operations 
 
 
 
 
 CONDENSED GROUP STATEMENT OF COMPREHENSIVE INCOME 
 for the six months ended 31 March 2017 
 
                                           Six months    Six months 
                                                   to            to        Year to 
                                             31 March      31 March   30 September 
                                                 2017          2016           2016 
                                          (unaudited)   (unaudited)      (audited) 
                                              GBP'000       GBP'000        GBP'000 
                                         ------------ 
 
 Profit for the period attributable 
  to owners of the Parent Company               4,010         2,229          6,149 
 
 Other comprehensive income/(expense): 
 Items that may be reclassified 
  subsequently to profit or loss: 
 Currency translation differences 
  on foreign currency net investments             688           780          2,576 
 Current tax on foreign currency 
  translation differences                           -             4              - 
 Fair value movement on cash flow 
  hedges                                          277            54            120 
 Deferred tax on fair value movement             (47)          (27)           (47) 
---------------------------------------  ------------  ------------  ------------- 
 
                                                  918           811          2,649 
---------------------------------------  ------------  ------------  ------------- 
 
 
 Items that will not be reclassified 
  subsequently to profit or loss: 
 Actuarial gain/(loss) on defined 
  benefit pension scheme                        1,011         (400)        (4,297) 
 Deferred tax on actuarial loss                 (172)            13            643 
---------------------------------------  ------------  ------------  ------------- 
 
                                                  839         (387)        (3,654) 
---------------------------------------  ------------  ------------  ------------- 
 
 
 
 Other comprehensive income/(expense) 
  for the period                                1,757           424        (1,005) 
---------------------------------------  ------------  ------------  ------------- 
 
 
 Total comprehensive income for 
  the period attributable 
  to owners of the Parent Company               5,767         2,653          5,144 
---------------------------------------  ------------  ------------  ------------- 
 
 
 
 
 CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY 
 for the six months ended 31 March 2017 
                                                        Own 
                                                     shares                Foreign 
                               Share      Share    in share    Hedging    exchange    Retained     Total 
                             capital    premium      trusts    reserve     reserve    earnings    equity 
                             GBP'000    GBP'000     GBP'000    GBP'000     GBP'000     GBP'000   GBP'000 
-------------------------  ---------  ---------  ----------  ---------  ----------  ----------  -------- 
 1 October 2015                1,050      2,757       (423)      (700)       1,119      29,382    33,185 
-------------------------  ---------  ---------  ----------  ---------  ----------  ----------  -------- 
 Net profit for the 
  period                           -          -           -          -           -       2,229     2,229 
 Exchange differences              -          -           -          -         780           -       780 
 Fair value movement 
  on cash flow hedges              -          -           -         54           -           -        54 
 Actuarial loss on 
  defined benefit 
  pension scheme                   -          -           -          -           -       (400)     (400) 
 Taxation relating 
  to items above                   -          -           -       (27)           4          13      (10) 
-------------------------  ---------  ---------  ----------  ---------  ----------  ----------  -------- 
 Total comprehensive 
  income                           -          -           -         27         784       1,842     2,653 
-------------------------  ---------  ---------  ----------  ---------  ----------  ----------  -------- 
 Transactions with 
  owners: 
 Dividends                         -          -           -          -           -     (2,115)   (2,115) 
 Share-based payments              -          -           -          -           -         232       232 
 Movement in own shares 
  in share trusts                  -          -          10          -           -           -        10 
 Gain on release of 
  shares in share trusts           -          -           -          -           -          87        87 
 Issue of share capital            3          -         (3)          -           -           -         - 
 Taxation relating 
  to items recognised 
  directly in equity               -          -           -          -           -           8         8 
-------------------------  ---------  ---------  ----------  ---------  ----------  ----------  -------- 
 1 April 2016                  1,053      2,757       (416)      (673)       1,903      29,436    34,060 
-------------------------  ---------  ---------  ----------  ---------  ----------  ----------  -------- 
 Net profit for the 
  period                           -          -           -          -           -       3,920     3,920 
 Exchange differences              -          -           -          -       1,796           -     1,796 
 Fair value movement 
  on cash flow hedges              -          -           -         66           -           -        66 
 Actuarial loss on 
  defined benefit 
  pension scheme                   -          -           -          -           -     (3,897)   (3,897) 
 Transfer between 
  reserves                         -          -           -          -        (20)          20         - 
 Taxation relating 
  to items above                   -          -           -       (20)         (4)         630       606 
-------------------------  ---------  ---------  ----------  ---------  ----------  ----------  -------- 
 Total comprehensive 
  income                           -          -           -         46       1,772         673     2,491 
-------------------------  ---------  ---------  ----------  ---------  ----------  ----------  -------- 
 Transactions with 
  owners: 
 Dividends                         -          -           -          -           -          20        20 
 Share-based payments              -          -           -          -           -         365       365 
 Movement in own shares 
  in share trust                   -          -          84          -           -           -        84 
 Gain on release of 
  shares in share trust            -          -           -          -           -          84        84 
 Taxation relating 
  to items recognised 
  directly in equity               -          -           -          -           -          83        83 
-------------------------  ---------  ---------  ----------  ---------  ----------  ----------  -------- 
 1 October 2016                1,053      2,757       (332)      (627)       3,675      30,661    37,187 
-------------------------  ---------  ---------  ----------  ---------  ----------  ----------  -------- 
 Net profit for the 
  period                           -          -           -          -           -       4,010     4,010 
 Exchange differences              -          -           -          -         688           -       688 
 Fair value movement 
  on cash flow hedges              -          -           -        277           -           -       277 
 Actuarial gain on 
  defined benefit 
  pension scheme                   -          -           -          -           -       1,011     1,011 
 Taxation relating 
  to items above                   -          -           -       (47)           -       (172)     (219) 
-------------------------  ---------  ---------  ----------  ---------  ----------  ----------  -------- 
 Total comprehensive 
  income                           -          -           -        230         688       4,849     5,767 
-------------------------  ---------  ---------  ----------  ---------  ----------  ----------  -------- 
 Transactions with 
  owners: 
 Dividends                         -          -           -          -           -     (2,267)   (2,267) 
 Share-based payments              -          -           -          -           -         477       477 
 Movement in own shares 
  in share trusts                  -          -           6          -           -           -         6 
 Gain on release of 
  shares in share trusts           -          -           -          -           -          94        94 
 Issue of share capital            5          -         (5)          -           -           -         - 
 Taxation relating 
  to items recognised 
  directly in equity               -          -           -          -           -           1         1 
-------------------------  ---------  ---------  ----------  ---------  ----------  ----------  -------- 
 31 March 2017                 1,058      2,757       (331)      (397)       4,363      33,815    41,265 
-------------------------  ---------  ---------  ----------  ---------  ----------  ----------  -------- 
 
 
 
 
 CONDENSED GROUP BALANCE SHEET 
 as at 31 March 2017 
                                           As at         As at          As at 
                                        31 March      31 March   30 September 
                                            2017          2016           2016 
                                     (unaudited)   (unaudited)      (audited) 
                                         GBP'000       GBP'000        GBP'000 
                                    ------------ 
 
 ASSETS 
 Non-current assets 
 Goodwill                                  2,727         1,075          2,727 
 Other intangible assets                     604           616            637 
 Property, plant and equipment            11,475        11,004         11,361 
 Deferred tax assets                       1,210           705          1,436 
 
                                          16,016        13,400         16,161 
 
 Current assets 
 Inventories                              40,435        30,239         29,990 
 Trade and other receivables              21,024        19,019         17,853 
 Current tax assets                            4             4              4 
 Derivative financial instruments             14             -              - 
 Cash and bank balances                    3,703         2,317          6,588 
 
                                          65,180        51,579         54,435 
 
 Total assets                             81,196        64,979         70,596 
 
 LIABILITIES 
 Current liabilities 
 Borrowings                              (3,663)       (2,365)          (487) 
 Provisions                                (451)          (52)           (67) 
 Trade and other payables               (18,850)      (12,925)       (14,151) 
 Current tax liabilities                   (966)       (1,108)          (999) 
 Derivative financial instruments              -         (140)            (9) 
 Redeemable loan notes payable                 -         (675)          (675) 
 
                                        (23,930)      (17,265)       (16,388) 
 
 Net current assets                       41,250        34,314         38,047 
 
 Non-current liabilities 
 Borrowings                              (8,033)       (8,380)        (7,755) 
 Post-employment benefits                (6,335)       (3,440)        (7,401) 
 Deferred tax liabilities                (1,155)       (1,092)        (1,111) 
 Derivative financial instruments          (478)         (742)          (754) 
 
                                        (16,001)      (13,654)       (17,021) 
 
 Total liabilities                      (39,931)      (30,919)       (33,409) 
 
 Net assets                               41,265        34,060         37,187 
----------------------------------  ------------  ------------  ------------- 
 
 
 
 
 CONDENSED GROUP BALANCE SHEET (continued) 
 as at 31 March 2017 
 
                                        As at         As at          As at 
                                     31 March      31 March   30 September 
                                         2017          2016           2016 
                                  (unaudited)   (unaudited)      (audited) 
                                      GBP'000       GBP'000        GBP'000 
                                 ------------ 
 
 EQUITY 
 Share capital                          1,058         1,053          1,053 
 Share premium account                  2,757         2,757          2,757 
 Own shares in share trusts             (331)         (416)          (332) 
 Hedging reserve                        (397)         (673)          (627) 
 Foreign exchange reserve               4,363         1,903          3,675 
 Retained earnings                     33,815        29,436         30,661 
-------------------------------  ------------  ------------  ------------- 
 
 Total equity attributable to 
  owners of the Parent Company         41,265        34,060         37,187 
-------------------------------  ------------  ------------  ------------- 
 
 
 
 
 
 
 CONDENSED GROUP STATEMENT OF CASH FLOWS 
 for the six months ended 31 March 2017 
 
                                             Six months    Six months 
                                                     to            to        Year to 
                                               31 March      31 March   30 September 
                                                   2017          2016           2016 
                                            (unaudited)   (unaudited)      (audited) 
                                                GBP'000       GBP'000        GBP'000 
                                           ------------ 
 
 Cash flow from operating activities 
 Profit before taxation                           5,493         3,161          8,293 
 Adjusted for: 
 Depreciation of property, plant 
  and equipment                                     709           662          1,347 
 Amortisation of intangible assets                   71            74            142 
 Loss on disposal of property, 
  plant and equipment                                13             2              2 
 Net finance costs                                  420           337            703 
 Share-based payments                               467           225            566 
 Increase in fair value of derivatives             (22)          (68)          (122) 
 (Decrease )/increase in post-employment 
  benefit obligations                              (55)            81            145 
-----------------------------------------  ------------  ------------  ------------- 
 
 Operating cash flow before movements 
  in working capital                              7,096         4,474         11,076 
-----------------------------------------  ------------  ------------  ------------- 
 
 Movements in working capital: 
 
 (Increase)/decrease in inventories            (10,061)       (3,826)        (2,501) 
 (Increase)/decrease in trade 
  and other receivables                         (2,908)       (1,091)            688 
 Increase in trade and other payables, 
  and provisions                                  5,811           179          1,541 
 
 Cash generated from operations                    (62)         (264)         10,804 
 Taxation paid                                  (1,512)         (575)        (2,022) 
 
 Net cash from operating activities             (1,574)         (839)          8,782 
 
 Cash flow from investing activities 
 Investment in subsidiaries                       (900)             -          (752) 
 Purchase of property, plant and 
  equipment                                       (571)         (322)          (679) 
 Purchase of intangible assets                     (36)          (26)          (109) 
 Repayment of redeemable loan 
  notes                                           (675)             -              - 
 Interest received                                    1             6              8 
 
                                                (2,181)         (342)        (1,532) 
-----------------------------------------  ------------  ------------  ------------- 
 
 
 
 
 
 CONDENSED GROUP STATEMENT OF CASH FLOWS (continued) 
 for the six months ended 31 March 2017 
 
                                           Six months    Six months 
                                                   to            to        Year to 
                                             31 March      31 March   30 September 
                                                 2017          2016           2016 
                                          (unaudited)   (unaudited)      (audited) 
                                              GBP'000       GBP'000        GBP'000 
                                         ------------ 
 
 Cash flow from financing activities 
 Increase in bank loans                         1,408         1,238            381 
 Interest paid                                  (421)         (344)          (711) 
 Dividends paid                               (2,267)         (662)        (2,095) 
 Net sale of own shares by share 
  trusts                                          100            97            265 
---------------------------------------  ------------  ------------  ------------- 
 
                                              (1,180)           329        (2,160) 
---------------------------------------  ------------  ------------  ------------- 
 
 Net (decrease)/increase in cash 
  and cash equivalents                        (4,935)         (852)          5,090 
 Effect of foreign exchange rates                  47          (67)             15 
 
 Movement in cash and cash equivalents 
  in the period                               (4,888)         (919)          5,105 
 Cash and cash equivalents at 
  beginning of period                           6,581         1,476          1,476 
 
 Cash and cash equivalents at 
  end of period                                 1,693           557          6,581 
 
 
 Cash and cash equivalents comprise: 
 Cash and bank balances                         3,703         2,317          6,588 
 Bank borrowings                              (2,010)       (1,760)            (7) 
 
                                                1,693           557          6,581 
---------------------------------------  ------------  ------------  ------------- 
 
 
 
 
 
 
 CONDENSED GROUP RECONCILIATION OF NET CASH FLOW TO 
  MOVEMENT IN NET DEBT 
 for the six months ended 31 March 2017 
 
                                           Six months    Six months 
                                                   to            to        Year to 
                                             31 March      31 March   30 September 
                                                 2017          2016           2016 
                                          (unaudited)   (unaudited)      (audited) 
                                              GBP'000       GBP'000        GBP'000 
                                         ------------ 
 
 Movement in cash and cash equivalents 
  in the period                               (4,888)         (919)          5,105 
 Increase in bank loans                       (1,408)       (1,238)          (381) 
 
 Cash (outflow)/inflow from changes 
  in net debt in the period                   (6,296)       (2,157)          4,724 
 Effect of foreign exchange rates                (43)         (116)          (223) 
 
 Movement in net debt in the period           (6,339)       (2,273)          4,501 
 Net debt at beginning of period              (1,654)       (6,155)        (6,155) 
 
 Net debt at end of period                    (7,993)       (8,428)        (1,654) 
                                         ------------ 
 
 
 

Responsibility statement

We confirm that to the best of our knowledge:

(a) the condensed set of financial statements for the six months ended 31 March 2017 has been prepared in accordance with IAS 34

(b) the half year report and condensed financial statements includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year)

(c) the half year report and condensed financial statements includes a fair review of the information required by DTR 4.2.8R (disclosure of related party transactions and changes therein).

By order of the Board

RICHARD HOPE

Finance Director

8 May 2017

NOTES TO THE UNAUDITED HALF YEAR FINANCIAL STATEMENTS

   1.      Basis of preparation 

The Group is required to prepare its condensed half year financial statements in accordance with accounting standards adopted for use in the European Union (International Financial Reporting Standards (IFRS)). The Group has adopted the reporting requirements of IAS 34 'Interim Financial Reporting'.

The consolidated condensed half year financial statements are prepared on the basis of all International Accounting Standards (IAS) and IFRS published by the International Accounting Standards Board (IASB) that are currently in issue. New interpretations may be issued by the International Financial Reporting Interpretations Committee (IFRIC) on existing standards and best practice continues to evolve. It is therefore possible that the accounting policies set out below may be updated by the time the Group prepares its full set of financial statements under IFRS for the year ending 30 September 2017.

The information relating to the six months ended 31 March 2017 and 31 March 2016 is unaudited and does not constitute statutory accounts. The statutory accounts for the year ended 30 September 2016 have been reported on by the Group's auditors and delivered to the Registrar of Companies. The report of the auditors was unqualified, did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and did not contain a statement under section 498 of the Companies Act 2006. These condensed half year financial statements for the six months ended 31 March 2017 have neither been audited nor formally reviewed by the Group's auditors.

   2.      Accounting policies 

These condensed half year financial statements have been prepared on the basis of the same accounting policies and presentation set out in the Group's 30 September 2016 annual report.

There were no new standards, or amendments to standards, which are mandatory and relevant to the Group for the first time for the financial year ending 30 September 2017 which have had a material effect on these condensed half year financial statements.

   3.      Accounting estimates 

The preparation of the condensed half year financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. In preparing these condensed half year financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those applied to the audited consolidated financial statements as at, and for the year ended, 30 September 2016.

   4.      Going concern 

As at the date of this announcement, the Directors have a reasonable expectation that the Group has adequate resources to continue in business for the foreseeable future. Accordingly, the condensed half year financial statements have been prepared on the going concern basis.

   5.      Risks and uncertainties 

The operation of a public company involves a series of risks and uncertainties across a range of strategic, commercial, operational and financial areas. The principal risks and uncertainties that could have a material impact on the Group's performance over the remaining six months of this financial year (for example, causing actual results to differ materially from expected results or from those experienced previously) are the same as those detailed on pages 26-30 of the 2016 Annual Report and Financial Statements.

   6.      Segmental information 

Business segments

IFRS 8 requires operating segments to be identified on the basis of internal financial information reported to the Chief Operating Decision Maker (CODM). The Group's CODM has been identified as the Board of Directors who are primarily responsible for the allocation of resources to the segments and for assessing their performance. The disclosure in the Group accounts of segmental information is consistent with the information used by the CODM in order to assess profit performance from the Group's operations.

The Group operates one global business segment engaging in the manufacture and supply of innovative ingredient solutions for the flavour, fragrance, beverage and consumer product industries with manufacturing sites in the UK, US and Kenya. Many of the Group's activities, including sales, manufacturing, technical, IT and finance, are managed globally on a Group basis.

Geographical segments

The following table provides an analysis of the Group's revenue by geographical market:

 
                                 Six months    Six months 
                                         to            to        Year to 
                                   31 March      31 March   30 September 
                                       2017          2016           2016 
                                (unaudited)   (unaudited)      (audited) 
                                    GBP'000       GBP'000        GBP'000 
                               ------------ 
 
 United Kingdom                       5,174         4,465          8,794 
-----------------------------  ------------  ------------  ------------- 
 Rest of Europe    - Germany          3,505         2,591          5,527 
  - Ireland                           4,018         3,116          5,871 
  - Other                             5,466         5,283         11,011 
 ----------------------------  ------------  ------------  ------------- 
 The Americas      - USA             18,501        15,014         33,729 
  - Other                             4,167         1,895          4,142 
 ----------------------------  ------------  ------------  ------------- 
 Rest of the 
  World            - China            2,785         1,942          4,536 
  - Other                             8,172         6,587         14,430 
 ----------------------------  ------------  ------------  ------------- 
 
                                     51,788        40,893         88,040 
                               ------------ 
 
 
   7.      Exceptional items 

The exceptional items referred to in the income statement can be categorised as follows:

 
                                      Six months    Six months 
                                              to            to        Year to 
                                        31 March      31 March   30 September 
                                            2017          2016           2016 
                                     (unaudited)   (unaudited)      (audited) 
                                         GBP'000       GBP'000        GBP'000 
                                   ------------- 
 
 Legal and professional fees                   -            31            302 
 Restructuring costs                           -           187            251 
 
                                               -           218            553 
 Less: tax effect of exceptional 
  items                                        -           (5)           (38) 
                                   ------------- 
                                               -           213            515 
 -----------------------------------------------  ------------  ------------- 
 
 

The exceptional items in the prior year all relate to non-recurring items. The legal and professional fees related to the costs in respect of the full and final settlement of the Earthoil earnout dispute. The restructuring costs related to one-off non-recurring reorganisation costs incurred in the US and Kenya.

   8.      Taxation 

Taxation has been provided on pre-exceptional profits at 27.0% (six months ended 31 March 2016: 27.7%) which is the effective group rate currently anticipated for the financial year ending 30 September 2017.

   9.      Earnings per share 

Basic earnings per share

Basic earnings per share is based on the weighted average number of ordinary shares in issue and ranking for dividend during the year. The weighted average number of shares excludes shares held by the Treatt Employee Benefit Trust (EBT), together with shares held by the Treatt SIP Trust (SIP) which do not rank for dividend.

 
                                      Six months    Six months 
                                              to            to        Year to 
                                        31 March      31 March   30 September 
                                            2017          2016           2016 
                                     (unaudited)   (unaudited)      (audited) 
 
 
 Earnings (GBP'000)                        4,010         2,229          6,149 
 Weighted average number of 
  ordinary shares in issue (No: 
  '000)                                   52,118        51,751         51,895 
 
 Basic earnings per share (pence)          7.69p         4.31p         11.85p 
                                    ------------ 
 
 

Diluted earnings per share

Diluted earnings per share is based on the weighted average number of ordinary shares in issue and ranking for dividend during the year, adjusted for the effect of all dilutive potential ordinary shares. The number of shares used to calculate earnings per share (EPS) have been derived as follows:

 
                                    Six months    Six months 
                                            to            to        Year to 
                                      31 March      31 March   30 September 
                                          2017          2016           2016 
                                   (unaudited)   (unaudited)      (audited) 
                                     No ('000)     No ('000)      No ('000) 
                                  ------------ 
 
 Weighted average number of 
  shares                                52,780        52,575         52,575 
 Weighted average number of 
  shares held in the EBT and 
  SIP                                    (662)         (824)          (680) 
 
 Weighted average number of 
  shares used for calculating 
  basic EPS                             52,118        51,751         51,895 
 Executive share option schemes          1,064           485            645 
 All-employee share options                312            91            122 
                                  ------------ 
 
 Weighted average no. of shares 
  used for calculating diluted 
  EPS                                   53,494        52,327         52,662 
                                  ------------ 
 
 Diluted earnings per share 
  (pence)                                7.50p         4.26p         11.68p 
                                  ------------ 
 
 

Adjusted earnings per share

Adjusted earnings per share measures are calculated based on profits for the year attributable to owners of the Parent Company before exceptional items as follows:

 
                                       Six months    Six months 
                                               to            to        Year to 
                                         31 March      31 March   30 September 
                                             2017          2016           2016 
                                      (unaudited)   (unaudited)      (audited) 
                                          GBP'000       GBP'000        GBP'000 
                                     ------------ 
 
 Earnings for calculating basic 
  and diluted earnings per share            4,010         2,229          6,149 
 Adjusted for: 
 Exceptional items (see note 
  7)                                            -           218            553 
 Taxation thereon                               -           (5)           (38) 
 
 Earnings for calculating adjusted 
  earnings per share                        4,010         2,442          6,664 
                                     ------------ 
 
 Adjusted basic earnings per 
  share (pence)                             7.69p         4.72p         12.84p 
                                     ------------ 
 
 Adjusted diluted earnings 
  per share (pence)                         7.50p         4.67p         12.65p 
                                     ------------ 
 
 
   10.    Dividends 

Equity dividends on ordinary shares:

 
                               Dividend per share    Six months    Six months 
                                  for years ended            to            to        Year to 
                                    30 September:      31 March      31 March   30 September 
                     2017(2)   2016(1)    2015(1)          2017          2016           2016 
                                                    (unaudited)   (unaudited)      (audited) 
                       Pence     Pence   Pence(3)       GBP'000       GBP'000        GBP'000 
------------------  --------  --------  ---------  ------------  ------------  ------------- 
 
 Interim dividend      1.45p     1.35p      1.28p           702           662            662 
 Final dividend          N/A     3.00p      2.76p         1,565         1,453          1,433 
------------------  --------  --------  ---------  ------------  ------------  ------------- 
 
                         N/A     4.35p      4.04p         2,267         2,115          2,095 
                    --------  --------  ---------  ------------ 
 
 

(1) Accounted for in the subsequent year in accordance with IFRS.

(2) The declared interim dividend for the year ending 30 September 2017 of 1.45 pence was approved by the Board on 8 May 2017 and in accordance with IFRS has not been included as a deduction from equity at 31 March 2017. The dividend will be paid on 17 August 2017 to those shareholders on the register at 14 July 2017 and will, therefore, be accounted for in the financial statements for the year ending 30 September 2017.

CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING STATEMENTS

This announcement contains forward-looking statements that are subject to risk factors associated with, among other things, the economic and business circumstances occurring from time to time in the countries, sectors and markets in which the Group operates. It is believed that the expectations reflected in these statements are reasonable but they may be affected by a wide range of variables which could cause actual results to differ materially from those currently anticipated. No assurances can be given that the forward-looking statements in this announcement will be realised. The forward-looking statements reflect the knowledge and information available at the date of preparation of this announcement and the Group undertakes no obligation to update these forward-looking statements. Nothing in this announcement should be construed as a profit forecast.

This information is provided by RNS

The company news service from the London Stock Exchange

END

IR BLGDUIBGBGRI

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May 09, 2017 02:00 ET (06:00 GMT)

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