Treatt hails 'strong' order intake; no impact so far from Covid-19
By Michele Maatouk
Date: Tuesday 07 Apr 2020
(Sharecast News) - Ingredients manufacturer Treatt said on Tuesday that order intake in recent weeks has been strong and that the coronavirus outbreak has not impacted its business so far.
In an update for the six months to the end of March, the company said order intake has been boosted as a number of its customers respond to increased demand for beverages consumed at home and cleaning products - such as liquid hand soaps and floor cleaning products - "which are of particular importance at this time".
As a result, there has not been "any adverse effect" on the trading performance from the Covid-19 pandemic and the company is trading in line with its expectations.
In both the UK and US, all non-essential staff are working from home and manufacturing continues, working within government guidelines and with appropriate health protection and wellbeing measures in place, it said.
Treatt noted that as previously reported, it expected the fall in citrus raw material prices in the last financial year to continue to impact revenue in the first half of the current financial year. "Consequently, whilst in-line with expectations, revenue for the period is expected to be approximately 5.1% lower as compared with the same period in the prior year (5.6% lower in constant currency)."
Still, citrus raw material prices are firming again and this should result in a stronger performance from that category in the second half, Treatt said.
While citrus remains a significant part of its business, the company pointed to good growth in reported revenue from fruit and vegetables and health and wellness.
Building work on the group's new UK facility has "inevitably slowed" due to the virus outbreak and it now expects that the UK relocation may not take place until 2021, although it is not possible to confirm a definitive timescale.
"The delay to our UK relocation will not affect our ability to meet customer orders in the short to medium term but such a delay does enable the group to preserve cash during this period of uncertainty" it said.
Treatt said the business is "trading well and is financially robust".
"We are encouraged by our order book and current demand as we move into our peak seasonal period."
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