Treatt (TET) H1 2025 earnings summary

Executive summary

• Revenue declined to £64.2m, with profit before tax (excluding exceptionals) falling to £3.6m, mainly due to lower citrus volumes and softer US premium demand, but strong cash generation led to a net cash position and a progressing share buyback.

• Strategic focus is on expanding premium offerings, accelerating innovation, and expanding the customer base, with significant growth in Asia and robust sales pipeline for H2.

• H1 was challenging, but new customer wins, a progressing Shanghai innovation centre, and a robust sales pipeline support medium-term confidence.

Financial highlights

• Revenue decreased by 11% year-over-year to £64.2m; gross profit margin dropped to 24.9% from 27.8%.

• Adjusted operating profit fell 53.1% to £3.8m; adjusted EBITDA down 38.9% to £6.5m; adjusted EPS declined 52% to 4.49p.

• Interim dividend maintained at 2.60p per share, matching the prior year.

• Net cash position improved to £0.9m, with strong cash generation and working capital discipline.

• Inventory value decreased by over 10% year-over-year as supply chains normalized.

Outlook and guidance

• Full-year 2025 guidance: revenue expected between £146m and £153m, profit before tax and exceptionals of £16m–£18m, net operating margin 11–12%, and net cash £1–3m.

• H2 sales target set at £82m with 85% visibility; 50% of sales covered by order book and 35% from repeat volumes.

• Operating margins anticipated to improve in H2, driven by higher sales, especially in North America.

• Share buyback programme of £5m underway.