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Highlights

  • Revenue drops 11% to £64.2M, impacted by softer demand and elevated citrus prices.

  • Full-year PBTE now forecast between £16M–£18M, down from previous expectations.

  • Company announces £5M share buyback, underlining board confidence and cash position.

Treatt plc (LSE:TET), a global provider of natural extracts and ingredients for the beverage, flavour, and fragrance industries, has released a trading update for the half-year ended 31 March 2025. The update reflects a challenging trading environment and includes a revised outlook for the full year alongside confirmation of a £5 million share buyback.

For the six-month period, revenue fell 11% year-on-year to £64.2 million (H1 2024: £72.1 million), attributed primarily to lower volumes in both the Heritage and Premium categories. Adjusted EBITDA is expected to come in at approximately £6.6 million, compared to £10.6 million in the prior corresponding period. Profit before tax and exceptionals (PBTE) is anticipated to be around £3.6 million, down from £7.6 million last year.

The company reported a net cash position of £0.9 million, a significant turnaround from a net debt of £0.7 million at the end of the last financial year. 

Despite a healthy pipeline and recent wins in its Premium portfolio, Treatt has revised its full-year revenue guidance to between £146 million and £153 million. Full-year PBTE is now expected to range between £16 million and £18 million.

The revision is driven by persistent high citrus costs impacting customer buying behaviours, particularly within the Heritage range. This has led to reformulation and reduced order volumes in value-added citrus products. Additionally, the softening of consumer confidence in the U.S. — Treatt’s key market — is affecting demand for beverages, particularly carbonated soft drinks, further compounding sales pressure.

However, Treatt is seeing positive traction in Premium, especially in the low and no-sugar beverage segment. The company recently secured a significant new customer in North America and maintains a solid order pipeline in New Markets for the second half of the year.

To counter margin pressure and fund future growth, the company has adopted several internal efficiency measures in H1, targeting simplification and cost control. Administrative expenses for the full year are expected to remain broadly in line with FY24.

In line with its capital allocation strategy and supported by its cash position, Treatt has announced a £5 million on-market share buyback.