StockMarketWire.com - Ingredient solutions specialist Treatt said sales increased 14% to £53.6m in the six months ended 31 March 2018.

Adjusted profit before tax of £5.8m for the half year ended 31 March 2018 was 20% higher than the £4.8m reported for the comparable period last year.

Following the reduction in US corporate taxes, basic adjusted earnings per share grew 30% from 6.58p to 8.58p.

During the first half of the financial year the group's key product categories performed well, with our sugar reduction and tea categories both reporting double digit growth in sales, being 15.4% and 38.5% respectively.

It also reported growth of 10.3% in citrus, a more mature market, where growth was in excess of the overall market as Treatt continued to gain market share.

CEO Daemmon Reeve said: "Following the exceptional performance of the group in 2017, it is very encouraging to again be reporting both strong revenue and profit growth for the half year.

"Our strategy continues to deliver with the main business drivers of citrus, tea and sugar reduction performing well in the period.

"Whilst there is still much to do to complete the year, and movements in exchange rates or raw material prices can impact results, the Board is currently confident that the group will meet its expectations for the financial year ending 30 September 2018."

CONDITIONAL SALE OF EARTHOIL PLANTATIONS

Treatt also announced the conditional sale of Earthoil Plantations, a wholly owned subsidiary of Treatt, to Univar.

Subject to the satisfaction of certain conditions, the sale is expected to complete on 31 May 2018.

The consideration of £11m (subject to an adjustment based on Earthoil Plantations' actual trading performance in April and May 2018), is receivable in cash in two stages; 90% on completion and a deferred payment of 10% twelve months after completion.

The group launched its updated five-year strategic plan in 2017. The new strategic plan, to drive the business through to 2022, is clearly focused on the croup's key product categories of citrus, sugar reduction and tea.

Given that strategy, the Board considered personal care ingredients as non-core and this sale is the result of a process undertaken to realise value.

The sale does not include the Kenyan subsidiaries which will continue to supply Earthoil Plantations under a three-year supply agreement. Transitional services arrangements with Earthoil Plantations were agreed for an initial limited period of up to six months from completion.

Treatt said it intends to use the proceeds from the sale to strengthen its balance sheet, increasing debt capacity for future growth and investment in the its key product categories. The sale is expected to be slightly earnings dilutive for the current financial year ending 30 September 2018.


At 8:12am: [LON:TET] Treatt PLC share price was +16p at 481p



Story provided by StockMarketWire.com