Treatt PLC (LON:TET) shares rose on Wednesday as the flavourings and fragrances firm reported a jump in first-half profit and announced the sale of its Eartoil Plantations business as part of a five-year strategic plan.
The small-cap firm said, for the half year ended 31 March 2018, its adjusted profit before tax increased by 20.4% to £5.8mln, up from £4.8mln a year earlier, while its revenue increased by 13.7% to £53.6mln, up from £47.1mln, as a result of new business wins and growth with existing customers.
The group reported strong growth in its two largest markets, with revenues in the UK growing by 45%, while in the US a constant currency swing drove a sales increase of 25%.
Daemmon Reeve, Treatt's CEO, said: “Our strategy continues to deliver with the main business drivers of citrus, tea and sugar reduction performing well in the period.”
He added: “Whilst there is still much to do to complete the year, and movements in exchange rates or raw material prices can impact results, the Board is currently confident that the Group will meet its expectations for the financial year ending 30 September 2018.”
The company increased its interim dividend by 10% to 1.60p per share, up from 1.45p per share a year earlier.
In a separate statement, Treatt unveiled the conditional sale of vegetable seed oil business Earthoil - which specialises in products for the personal care and cosmetic industries - to Univar Limited for £11mln in cash.
The group said, with its strategy clearly focused on the key product categories of citrus, sugar reduction and tea, the board considered the personal care ingredients business as non-core.
It added that the funds raised from the sales will be used to strengthen Treatt's balance sheet in order to provide for future growth and investment in its key product areas.
In late morning trading, Treatt’s shares were up 2.8% to 478.0p.