Despite an increase in sales UK flavour and fragrance company Treatt described trading for the six months to 31 March 2003 as 'challenging' this week, with profit before tax falling by 24 per cent to £955,000 (€1.3m) compared to £1,255,000 in 2002.
The weakening US Dollar during the last 12 months plus the absence of last year's significant one-off orange stock profits took their toll on the company results with earnings per share consequently dropping to 6.5 pence per share from 8.6 pence per share in 2002.
Edward Dawnay, chairman of the company, said on Monday that despite moving to a new facility and poor weather in the northern United States, Treatt USA sales have been stable. But the results were knocked by a slight reduction in margins due to the product mix and increased overheads in the new facility.
According to the company, a leader in essential oils, orange oil prices remain firm and are expected to remain so until the new Brazilian orange crop in 2004 when it is believed that prices may well return to near historical levels.
According Dawnay, Treatt's balance sheet remained stable with net assets per share of £1.68, compared with £1.65 per share in September 2002.
Looking ahead, the chairman maintained that 'based upon our current projections the cash flow in the second half should be positive,' boosted by a much stronger order book for the group than at this time last year, particularly in the USA.
Net Debt was £5.5m and gearing was 31 per cent. Based upon current projections the cash flow in the second half should be positive.