Shares in Treatt PLC (LSE:TET) fell 23% in early trading on Wednesday after the flavour and fragrance ingredient maker cut its full-year profit forecast, citing weaker consumer confidence in the US and high raw material costs.
It now expects profit before tax and exceptionals to come in between £16 million and £18 million, down from £21 million last year.
Revenue for the six months to 31 March fell 11% to £64.2 million, with adjusted earnings more than halving to £6.6 million. Sales of citrus-based ingredients (a core product line) were hit by sustained high fruit prices, leading customers to reformulate or delay purchases.
Treatt also reported softer demand in the US beverage market and flagged geopolitical uncertainty as a further drag on sentiment.
Despite the weaker outlook, the company highlighted recent wins in higher-margin “premium” categories and announced a £5 million share buyback, pointing to confidence in its long-term strategy.
The stock was off 75p at 246p.