Treatt

LN: TET

£260.2m market cap

442.5p last close

Treatt provides innovative ingredient solutions from its manufacturing bases in Europe, North America and Africa, principally for the flavours and fragrance industries and multinational consumer goods companies, particularly in the beverage sector.

Investment summary

Treatt has transformed itself from a commodity-based ingredients company into a supplier of value-added ingredients and ingredient solutions. The previous strategy was delivered three years ahead of target, following a stellar FY17, and the new strategy introduced last September builds on the strong momentum in the business, which has seen five consecutive years of earnings above company expectations. There will be a full site relocation for the UK business over the next three years or so, and expansion of the US site by the end of this year.

Y/E Sep
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (p)
P/E (x)
P/CF (x)
2017A 101.3 15.0 12.8 18.5 23.9 49.3
2018A 112.2 16.6 13.8 20.3 21.8 70.2
2019E 116.1 15.8 14.2 19.1 23.2 16.7
2020E 120.7 18.6 14.8 20.0 22.1 15.6
Last updated on 18/02/2019
Industry outlook

Annual growth rates for the global flavours, fragrance and ingredients sector are expected to be low single digits in 2013-18 (source: IAL Consultants). Treatt is migrating its business from that of a pure supplier to the food and beverage industries to being a valued partner in the development of new ingredients. Citrus and tea flavours, and sugar reduction are core areas of focus, with the latter undergoing a structural growth trend.

Last updated on 18/02/2019
Sector
Industrials
Share price graph
Balance sheet
Forecast net debt (£m) 3.2
Forecast gearing ratio (%) 4
Price performance
%
1m
3m
12m
Actual 5.4 (3.8) 9.5
Relative* 2.0 (6.5) 11.2
52-week high/low 508.0p/401.0p
*% relative to local index
Key management
Tim Jones Chairman
Daemmon Reeve CEO
Richard Hope CFO