Treatt - Reassuring confidence

Following the exceptional results Treatt posted in FY17, momentum has continued in the business and revenues were up c 10% in H1. The core categories of citrus, tea and sugar reduction continue to drive the business, demonstrating that the company is well placed to capitalise on current trends in the food and beverage space: management’s outlook for FY18 remains unchanged. H1 should also benefit from positive FX effects, and US tax reform should lead to a significantly lower tax rate in future. We leave our forecasts unchanged at this stage, but see upside to our EPS forecasts from the lower tax rate, which remains unquantified at present.