Annual profits at Bury St Edmunds-based Treatt set to top expectations

Product development work in progress at Treatt's laboratories in Bury St Edmunds.

Product development work in progress at Treatt's laboratories in Bury St Edmunds. - Credit: Archant

Annual profits at flavour and fragrance ingredient solutions specialist Treatt will come in “comfortably above” previous expectations following a strong performance in the second half of the year to September 30.

Bury St Edmunds-based Treatt, which has a global customer base in the flavour, fragrance and fast-moving consumer goods industries, said a focus on the beverage sector had contributed significantly to its success.

In a final trading update ahead of its annual results, due to be announced on November 29, Treatt said: “The board is pleased to confirm that the group has performed well in the second half of the financial year.

“As we approach our financial year end, momentum in the business has continued and consequently the board now expects to report profit before tax and exceptional items for the year ending September 30 2016 comfortably above its previous expectations.

“The performance across the group has been consistently strong throughout 2016.

“The group’s focus on key beverage sectors including innovative citrus and sugar reduction solutions, as well as key markets such as China and North America, is showing encouraging signs of success.”

Treatt, which is a member of the EADT/EDP Top 100 listing of the 100 largest companies based in Suffolk and Norfolk, said that its cash performance had also been “encouraging”, with net debt at the year end expected to be at its lowest level since 2005.

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And the company added that its strategy to manage foreign exchange risk had “prevented currency fluctuations during the year from having a more material impact” on its overall results for the year.

“Whilst the underlying impact of the strengthening US dollar is expected to reduce profits by approximately £0.5m in the current financial year, it is expected that these hedging policies will substantially reverse this figure in the first quarter of the next financial year,” it said.

A further update on Treatt’s plans to relocate its UK operation to a new site, still in or near Bury, is due to be issued alongside its full-year results, but it said in the trading update that discussions with landowners were now “at an advanced stage”.

Looking ahead, Treatt added: “With the continuing momentum being delivered by our Strategic Plan and the beneficial impact should the US dollar to sterling remain at its current rates, the board believes that the business will continue to perform well and management look to the future with confidence.”