Treatt (TET) H1 2025 earnings summary

Executive summary

• Revenue and profit declined in H1 due to lower citrus sales from high prices and softer U.S. premium demand, but strong cash generation led to a net cash position and a progressing share buyback.

• Strategic focus is on shifting revenue mix toward premium offerings, expanding customer base, and accelerating innovation, especially in sugar reduction and new beverage formats.

• 27 new buying customers were added in H1, with significant growth in Asia and a robust sales pipeline for H2.

• Shanghai innovation centre is advancing, with opening planned for 2025, and a new French sample lab opened in April.

• Interim dividend maintained at 2.60p per share; £5m share buyback programme ongoing.

Financial highlights

• Revenue declined 11.0% year-over-year to £64.2m, with gross margin down to 24.9% and adjusted operating margin at 6.0%.

• Profit before tax and exceptionals fell to £3.6m, and adjusted EBITDA dropped 38.9% to £6.5m.

• Net cash position improved to £0.9m, with over £30 million cash generated in the last three years.

• Capital expenditure at £2.1m in H1, with further investment expected in H2.

• Exceptional costs of £0.8m related to restructuring and relocation.

Outlook and guidance

• H2 expected to be in line with expectations, with 50% of sales covered by order book and 35% from repeat volumes; £10-12 million sales gap to be filled from pipeline.

• Full-year 2025 guidance: revenue of at least £146 million and profit before tax and exceptionals of at least £16 million.

• No significant increase in administrative expenses anticipated for FY25.

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

• Confidence in medium-term strategy, with focus on Premium and New Markets growth.