TIDMTET
RNS Number : 3602Q
Treatt PLC
29 November 2016
TREATT PLC
FULL YEAR RESULTS
YEARED 30 SEPTEMBER 2016
Adjusted profit before tax up 11% and adjusted EPS up 8% as the
Group delivers fourth consecutive year of record results
Treatt Plc, the manufacturer and supplier of ingredient
solutions for the flavour, fragrance and FMCG industries, announces
today its results for the year ended 30 September 2016.
HIGHLIGHTS of our year:
-- Revenues for the year up 2% to GBP88.0 million (2015: GBP85.9 million)
-- Operating profit increased by 10% to GBP9.5m (2015: GBP8.7m)
-- Adjusted profit before tax(*) increased by 11% to GBP8.8m (2015: GBP8.0m)
-- Return on capital employed of 24.6% (2015: 22.1%)
-- Free cash flow of GBP8.0m (2015: GBP6.2m)
-- Adjusted basic earnings per share(*) increased by 8% to 12.84p (2015: 11.94p)
-- Total Dividend per share increased by 8% to 4.35p (2015: 4.04p)
Commenting on the results, CEO Daemmon Reeve said:
"Building on our solid progress, the team has once again
performed strongly to deliver on our objective of sustainable
growth in profits. The new financial year has started well. We have
much to do across the business to ensure we build on the work of
our people over the past year and be able to take advantage of the
many opportunities ahead of us."
Notes:
(*) All adjusted measures exclude exceptional items - see note 7
to the financial statements below.
Enquiries:
Treatt plc +44 (0)1284 702500
Daemmon Reeve Chief Executive Officer
Richard Hope Finance Director
Brokers
Investec Investment Banking
Patrick Robb +44 (0)20 7597 4000
David Anderson
Public relations
Davidson Ryan Dore
Lawrence Dore +44 (0)20 7520 9218
CHAIRMAN'S STATEMENT
"An excellent year with adjusted* profit before tax up 11% to
GBP8.8m and strong cash conversion allowing net debt to fall to
GBP1.7m from GBP6.2m"
Results
It is particularly pleasing to report that the Group results
this year have seen meaningful progress not only in respect of our
financial performance but on non-financial objectives too. Revenue
has grown by 2.5% to GBP88.0m (2015: GBP85.9m) resulting in an
increase in adjusted* profit before taxation of 11% to GBP8.8m
compared with GBP8.0m last year. At 12.84p, adjusted basic earnings
per share have improved 7.5%.
Strong cash performance this year has seen the Group's net debt
continue to fall to GBP1.7m (2015: GBP6.2m). This has been achieved
despite the marked increases in key raw material costs, such as
orange oil, and the depreciation of Sterling against the US Dollar.
In the last 2 years net debt has fallen by GBP7.9m (82%) (2014:
GBP9.6m).
The Group's strategy to manage foreign exchange risk has
prevented currency fluctuations during the year from having a more
material impact on the net results. The overall net impact of
movements in foreign exchange rates was a reduction in profit
before tax of approximately GBP0.5m, more details on which can be
found in the Financial Review.
Dividends
It is proposed to pay a final dividend of 3.00p (2015: 2.76p),
increasing the total dividend for the year by 7.7% to 4.35p (2015:
4.04p). I am also pleased to say that following a review of our
dividend timetable we have brought forward the payment dates each
year for interim and final dividends to March and August
respectively (having previously been April and October). If
approved by shareholders at the forthcoming AGM, the final dividend
will therefore be payable on 23 March 2017 to all shareholders on
the register at close of business on 17 February 2017. Shareholders
who wish to participate in the dividend re-investment plan for this
and future dividends should elect to do so by 26 February 2017.
Strategic overview
In recent years our efforts have been focused on driving the
business to deliver sustainable growth of profits over the long
term. We have prioritised investment in those areas which will reap
the greatest benefits for the Group, investing greater resources on
innovation, marketing, staff development, management training and
more recently on growing our activities in China.
The developments we have implemented will help us service our
customers with more innovative products and improve our market
positioning to better serve the rapidly evolving desires of
consumers.
Sales have grown by 2.5% but the proportion of higher
value-added products has helped further improve gross margins,
resulting in another record year for the Group; we will continue to
develop and refine our product mix by bringing ever greater focus
to the market segments to which they are offered. It is important
that we continue to grow revenue in the right way by increasing the
proportion of value-added products in our sales mix and I believe
these results demonstrate strong continuing progress in this
area.
UK Site Relocation
In the UK we have been on our existing site at Bury St Edmunds,
Suffolk, since 1971 and although we have continuously adapted the
site over the years, it is no longer fit for purpose. The site is
fragmented as we operate out of six buildings; this neither
provides us with the right environment to maximise our efficiencies
and communication with each other nor with the evolving regulatory
environment in which we operate. At the same time our growing
business needs to have a site which is fit for purpose for the
future where we can quickly adapt to an ever changing environment
and help us attract the right talent into the business in order to
drive innovation in our markets. I can therefore confirm that we
continue to progress our plans to relocate our UK business, more
details of which can be found in the Financial Review, and hope to
be in a position to make a further announcement on this in the near
future.
The success of our US operation has meant that it has also
outgrown its existing premises and will need to invest in its site
in the coming year to build on the many opportunities we see. Plans
are therefore well under way in both the UK and US and, as our
Chief Executive comments in his report, have involved detailed
consultation with our employees to ensure that our new site in the
UK and our expanded site in the US will serve the needs of the
business in the long term.
Corporate Governance
Ian Neil left us as a Non-executive Director in January of this
year and I would like to take this opportunity to thank Ian for all
the hard work and support he gave the business over the years and
we wish him the very best for the future. In June I was very
pleased to welcome Richard Illeck to the Board as a Non-executive
Director. Richard has recently retired from PepsiCo where he worked
for 28 years. During Richard's time at PepsiCo he undertook a
number of operational, technical and manufacturing roles. Richard
brings a wealth of experience and industry knowledge to us and we
are delighted to have him on our Board.
We regularly review ways to improve the effectiveness of what we
do through thorough and detailed internal evaluations. A key area
of the Board's focus includes defining and communicating our risk
appetite and conducting a broad assessment in respect of our
business risks in the shorter as well as longer term. Significant
risks, which are identified by their size of impact and probability
of occurrence, are detailed on the Group risk register, which is
regularly reviewed by the Board.
Prospects
The Group has had an encouraging start to the new financial year
with both the UK and US expected to be on plan at the end of the
first quarter. Group earnings are being assisted by the present
strength of the US Dollar against Sterling; a significant
proportion of our earnings are made by our US operations and the
trading currency of the UK operations is mainly the US Dollar as
well.
Thank you
We have fantastic staff at Treatt and I would like to take this
opportunity to thank them for all their hard work and enthusiasm
without which I would not be able to report yet another record year
for Treatt.
TIM JONES
Chairman
28 November 2016
Notes:
(*) All adjusted measures exclude exceptional items, details of
which are given in note 7 to the financial statements below.
CHIEF EXECUTIVE OFFICER'S REPORT
"Another good year for the Group as we continue to deliver on
our strategic objectives"
Overview - main highlights
This year has been another solid year of progress for the
business, both in terms of financial performance and also our
cultural journey which will provide the platform for further
progress. We have come a long way in the last few years in the
migration of the business from that of a pure supplier to the food
and beverage industries to being a trusted and valued partner in
the development of innovative and effective ingredients for the
industry. This is a long term programme that involves not only the
capability upskilling of our people but also a change in the
mind-set of the business as a whole. Our progress on this journey
is demonstrated through our financial performance. Over the last
four years we have increased adjusted* profit before tax by 75%
from GBP5.1m in 2012 to GBP8.8m this year, a feat for which our
colleagues can be immensely proud. Similarly our cash generation
has been strong such that net debt has fallen by 87% from GBP12.9m
to GBP1.7m over the same period as we have turned our profits into
cash.
A key driver of our strategy is our people. We measure progress
through regular staff surveys and are proud to report a further
increase in the level of staff engagement which is critical, not
only to motivate and retain our existing colleagues, but also to
ensure that we attract high quality candidates for future positions
as we continue to grow. The energy we feel around the business
every day is directly attributable to our vibrant culture and a
major focus of the business is to drive levels of engagement even
higher. To support this important work we are strengthening our
human resource function across the Group to further enable
proactive staff development, training and promote Treatt as an
employer of choice in the communities we serve. To ensure our
talent pipeline flourishes into the future we are deepening
relationships with local schools and colleges, most notably, but
not exclusively, in the technical areas of our business.
Whilst Brexit has created some uncertainty for the UK and could
potentially introduce complexity for our business, the Board does
not currently believe that it will have a material adverse impact
on the Group's results or financial position, and as such is not
considered as a principal risk. Nevertheless we will be monitoring
the situation closely.
The performance across the Group has been consistently strong
throughout 2016. New business wins have boosted our financial
performance this year with further successes in our core focus
areas such as citrus flavours and sugar reduction. The citrus wins
have come from new and existing customers in territories from China
to South America and the sugar reduction wins have been more
specifically concentrated in the US and European beverage
markets.
China represents potentially a very large market for Treatt and
we have made important progress this year where we opened a new
enlarged representative office in the Caohejing High-Tech
Industrial Park area of Shanghai. This has had a positive impact as
Treatt China is now able to serve customers in a much more timely
fashion and, importantly, with products designed by technicians
familiar with national flavour nuances. Customers have visited our
applications lab to work on final refinement to formulations,
further strengthening these relationships. Plans are also in place
to further strengthen our team in this important region.
Earthoil recorded its 6th year of consecutive growth in profits.
We are pleased to have settled all claims and litigation in respect
of the dispute, as we announced on 30 September 2016.
Clear strategic focus
During the year our efforts on further innovation in sugar
reduction technologies have been enhanced with the addition of
further research and development scientists as well as increased
focus on this industry-wide imperative. We currently have a number
of significant active projects with both existing and potentially
new beverage clients in this area of highest topical interest for
the global beverage market. We are also working on projects to add
value to products which would otherwise be classed as waste
produce.
Important beverage clients have been working alongside our
technicians in the laboratories, the partnership model we expect to
greatly expand on at our new UK site. Working as a solutions
provider for our customers is enabling deeper relationships with
customers; often generating further opportunities and areas of
closer collaboration.
Our progress on improving yields and efficiencies within the
manufacturing part of our business continues to make meaningful
progress and is feeding into the numbers. The cross-functional
efforts being made are particularly gratifying and speak of our
collaborative culture within the business, which is providing the
platform for co-operation at all levels within the organisation. We
continue to challenge our processes to identify improvements and
encourage ideas and suggested improvements to permeate from all of
our colleagues. All of this valuable work is very much in line with
our strategy to keep our cost base under strict control and drive
business improvement.
Central to our strategy is our people
Our company ethos is based around people and how we impact their
lives, both our own people and for society at large. Treatt's
people-centric culture encourages passion, enthusiasm and energy
amongst its staff but it is important that we also contribute to
the communities in which we operate. We look to engage with the
people we live and work amongst and take our responsibility towards
the local community seriously; after all, we are part of it. Our
Community Spirit Initiative reflects our commitment to playing an
active role in local society by encouraging our staff to get
involved. We regularly release people from their day-to-day roles
to work with local charities and schools on a variety of important
initiatives such as sponsorship and involvement in events such as
"adopt-a-highway" and gardening projects as well as having recently
become involved in helping at a care farm for people with learning
difficulties. Earlier this year our staff ran a local hospice
charity shop for a day, providing the hospice with much-needed
additional funds and giving us a great teambuilding event and fun
day.
I was delighted and proud to learn recently that we had won the
British Chamber of Commerce award for Commitment to People
Development for the East of England as this recognition is
testament to the commitment and engagement of our team of people. I
was also honoured to be asked to speak at the Best Employers
Eastern Region event on the topic of our cultural journey.
Refreshing our company values
We recently challenged our teams to take a hard look at the
business and refresh our company values in line with our evolving
culture. The level of engagement in the project was very pleasing
and as a result we have now adopted the following as our values:
Teamwork, Pride and Passion, Integrity and Challenge. Various
initiatives will be undertaken to embed these behaviours across the
business. Our values are the behaviours required to deliver
excellence within the business and are true to the cultural DNA of
our company.
Health & Safety is of prime importance
Continuous improvement is critically important in health and
safety and our culture promotes open dialogue on possible areas for
improvement. During the year our global health and safety team ran
a climate safety survey across the business to identify areas of
strengths and perceived weaknesses in our processes.
UK site relocation
The team at Treatt is excited about the relocation to our new
headquarters in the UK. Our experience of moving our Florida
facility to new larger premises several years ago has given us
real-life experience of the challenges involved in such a move as
well as an important insight into the operational and cultural
benefits obtainable. Plans for our new site in the UK are
progressing well and our cross-functional teams are focused on
providing future-proofed world-class facilities. The depth of
involvement in the design of the new premises has been extensive,
with internal design teams doing some great work to map out the
future look and feel of Treatt in line with our strategy and,
equally importantly, our culture. Once complete, colleagues will
have greater opportunities to engage with one another, being in one
purpose-designed building as opposed to the six units we currently
occupy on our Bury St. Edmunds site in the UK. The customer
experience will be greatly enhanced, correctly showcasing Treatt as
a welcoming, vibrant and technically excellent environment. In the
meantime, we have reduced investment into our current UK site and
delayed a number of long term projects to enhance our manufacturing
capabilities until we move. This has resulted in a short term cash
flow gain which will reverse in due course.
Summary
There is heightened confidence within Treatt and our financial
year is off to a pleasing start given that the first quarter is,
seasonally, normally our quietest period. Nevertheless, we continue
to act in a prudent manner. The teams are driving at new business
wins, improved systems and processes and further efficiency savings
in the business. We continue to challenge much of the established
practices of the business to find value and improvement and we all
find this motivational. Our energy is focused to build upon the
successes of the past four years.
DAEMMON REEVE
Chief Executive Officer
28 November 2016
Notes:
(*) All adjusted measures exclude exceptional items, details of
which are given in note 7 to the financial statements below.
FINANCIAL REVIEW
"Adjusted* profit before tax increased by 11% - four consecutive
years of consistent, sustainable, growth - and net debt reduced to
below GBP2m"
Financial overview 2016
--------------------- ------------------
Revenue GBP88.0m +2.5%
--------------------- --------- -------
Profit before tax* GBP8.8m +11.3%
--------------------- --------- -------
Dividend 4.35p +7.7%
--------------------- --------- -------
Earnings per share* 12.84p +7.5%
--------------------- --------- -------
Key performance indicators 2016 2015
----------------------------- ------ ------
Net operating margin* 10.8% 10.1%
----------------------------- ------ ------
Return on capital employed* 24.6% 22.1%
----------------------------- ------ ------
Average net debt to
EBITDA* 0.35x 0.78x
----------------------------- ------ ------
Income Statement
Revenue and profit
Revenue for the year grew by 2.5% to GBP88.0m (2015: GBP85.9m)
whilst gross profit grew by a more significant 10%, reflecting the
success of the Group's strategy of moving up the value chain and
focusing on added-value products. The rate of revenue growth was
therefore muted by the active management of certain high priced
(but low margin) traded business. Key areas of growth, which more
than replaced the reduction in traded business, included sugar
reduction, tea, natural distillates and citrus.
An important long term KPI for the Group is net operating margin
which increased from 10.1% to 10.8% as the combined strategic
benefits of growing revenue, replacing traded commodity business
with bespoke, innovative products, whilst maintaining a tight
control of costs continues to show through. This resulted in a 10%
increase in operating profit to GBP9.5m (2015: GBP8.7m). Return on
capital employed increased to 24.6% (2015: 22.1%).
As explained below, the Group mitigates its foreign exchange
risk. The impact of movements in foreign exchange rates on profit
before tax is the net of retranslating overseas profits,
retranslating foreign currency transactions in UK businesses and
the gains or losses on foreign exchange hedging instruments such as
forward and option contracts. When taken together, therefore, the
net impact on the profit before tax for the year was a loss of
GBP0.5m.
Exceptional costs in the year of GBP0.6m (2015: GBP0.2m) include
GBP0.3m in relation to the final legal costs concerning the
Earthoil earnout dispute. Although not material in the year, these
costs have been accounted for as an exceptional item in order to
maintain consistent treatment with prior years. A further GBP0.3m
exceptional charge was incurred in relation to some one-off
restructuring costs in Kenya and the US. On an adjusted basis
excluding these costs, earnings before interest, tax, depreciation
and amortisation for the year increased by 9% to GBP11.0m (2015:
GBP10.1m). Profit before tax after exceptional items rose by 7% to
GBP8.3m (2015: GBP7.8m). Further information on the exceptional
items is given in note 7 to the financial statements below.
Compound 10 year growth
per annum*
------------------------ ---------
Revenue 9.5% pa
------------------------ ---------
Profit before tax 10.4% pa
------------------------ ---------
Earnings per share 10.7% pa
------------------------ ---------
EBITDA 9.7% pa
------------------------ ---------
Dividends and Earnings per share
The proposed final dividend of 3.00p per share (2015: 2.76p)
increases the total dividend per share for the year by 7.7% to
4.35p, representing dividend cover of 2.9 times pre-exceptional
earnings for the year and a rolling three year cover after
exceptional items of 2.5 times. The Board's policy is to maintain
dividend growth on a consistent basis at between 2.0 and 2.5 times
three year rolling cover. This year's dividend increase has
resulted in dividend cover at the prudent end of the policy range
which the Board consider to be appropriate given the forthcoming
cash requirements of the business in order to fund the impending UK
site relocation. Nevertheless, this represents an increase in the
dividend of 50% over the last five years. Basic earnings per share
(adjusted to exclude exceptional items - see note 9 to the
financial statements) for the year increased by 7.5% to 12.84p
(2015: 11.94p). The calculation of earnings per share excludes
those shares which are held by the Treatt Employee Benefit Trust
(EBT) and Treatt SIP Trust (SIP) since they do not rank for
dividend, and is based upon adjusted profit after tax.
Foreign exchange gains and losses
Whilst the Group's functional currency is the British Pound
('Sterling') as explained below, the amount of business which is
transacted in other currencies creates foreign exchange risk,
particularly the US Dollar and, to a more limited extent, the Euro.
During the year the US Dollar/Sterling rate moved materially and
the US Dollar ended the year 14% stronger against GBP at GBP1=$1.30
(2015: GBP1 = $1.51). As explained further in this report under
'Treasury Policies', the Group hedges its foreign exchange risk at
R C Treatt by holding and managing US Dollar borrowings and taking
out forward currency contracts and options. This can result in
timing differences in the short term, giving rise to re-translation
gains or losses in the income statement. This has resulted in a
small loss on trading transactions of less than GBP0.1m in 2016
(2015: GBP0.3m loss) and a loss on foreign exchange contracts of
GBP2.2m (2015: GBP0.2m gain) which has been netted off the revenue
line in the income statement. As part of the Group's hedge
accounting, a foreign exchange gain of GBP0.2m was taken to
reserves through the Statement of Other Comprehensive Income (2015:
GBP0.2m loss).
There was a substantial currency gain of GBP2.6m (2015: GBP0.8m)
in the 'Statement of Comprehensive Income' in relation to the
Group's investment in overseas subsidiaries, principally in respect
of Treatt USA.
Finance costs
The Group's net finance costs for the year decreased by 4.0% to
GBP0.71m (2015: GBP0.74m) as a result of the combined effect of
lower levels of net debt and marginally lower interest rates.
Although debt levels have fallen considerably, this has not fed
through to substantially lower charges since a significant
proportion of the Group's finance costs are fixed through an
interest rate swap (see below), and the carrying cost of unutilised
facilities now represents a far greater proportion of the overall
cost. The Board continue to be of the view that whilst a
significant proportion of current banking facilities remain
unutilised, the current level of these facilities remains
appropriate in order to manage cash flow peaks during the year and
also in the light of significant capital expenditure requirements
over the next few years. Interest cover for the year increased to
13.6 times (2015: 11.7 times).
As part of the Group's risk management, in 2011 R C Treatt fixed
$9m of US Dollar borrowings at 5.68% for ten years by way of an
interest rate swap. This swap has been designated as a 'hedge' in
accordance with IFRS and consequently any movements in the
mark-to-market of the swap are taken directly to equity. At the
balance sheet date, the fair value liability, net of deferred tax,
of the swap was GBP0.8m (2015: GBP0.6m).
Group Tax Charge
The current tax charge of GBP2.4m (2015: GBP1.9m) represents an
effective rate (based on profit before tax and exceptional items)
of 27.0% (2015: 24.2%). After providing for deferred tax, the
overall tax charge has increased by GBP0.3m to GBP2.1m (2015:
GBP1.8m); an overall effective tax rate (after exceptional items)
of 26% (2015: 23%). The increase in the tax rate applicable for the
year reflects a different profit mix between tax jurisdictions.
There were no significant adjustments required to the previous
year's tax estimates. With corporation tax rates continuing to fall
in the UK until they reach an expected 17% in 2020, the Group's
overall effective rate of tax is expected to fall over the next
four years assuming the profit mix between tax jurisdictions
remains broadly unchanged.
Balance Sheet
Group shareholders' funds grew by GBP4.0m (2015: GBP4.4m) in the
year to GBP37.2m (2015: GBP33.2m), with net assets per share
increasing by 13% to 71p (2015: 63p). Over the last five years, net
assets per share have grown by 46%. The Board has chosen not to
avail itself of the option under IFRS to revalue land and buildings
annually and, therefore, all the Group's land and buildings are
held at historical cost, net of depreciation, in the balance sheet.
It should be noted that net assets have been reduced by GBP0.3m
(2015: GBP0.4m) as a result of shares held by the EBT and SIP, due
to the accounting requirements for employee trusts. This impact
will be reversed when these shares are used to satisfy the exercise
of employee share options.
Cash Flow
The Group has continued to improve its cash performance and in
the year net debt fell by GBP4.5m to GBP1.7m (2015: GBP6.2m) with a
corresponding reduction in the level of gearing from 19% to just
4%. This is the lowest debt level the Group has had since 2004
(when revenue was GBP32m and inventory was GBP8m for the
Group).
The levels of capital expenditure in the year remained very low
with a total spend of just GBP0.7m compared with GBP1.0m in 2015.
There were no major projects in the year, whilst capital
expenditure in the UK tended to be related to on-going routine
renewal and maintenance whilst plans progress towards the intended
relocation. The cash flow benefit of delaying certain capital
projects in the UK in anticipation of the new site will inevitably
reverse (as explained below) as both delayed projects, and brought
forward capital expenditure, will occur as part of the site
relocation.
The Group has a mix of secured and unsecured borrowing
facilities totalling GBP22.4m, of which GBP0.5m expire in one year
or less. The Group's borrowing facilities are held with HSBC, Bank
of America and Lloyds Banking Group with the majority of facilities
now held on three to five year terms with expiry dates staggered to
fall in different years. The Group continues to enjoy positive
relationships with its banks and expects all facilities to be
renewed when they fall due.
2016 2015 Movement
---------------------- -------- -------- ---------
Free cash flow GBP8.0m GBP6.2m +30%
---------------------- -------- -------- ---------
Cash conversion rate 84% 71% +13%
---------------------- -------- -------- ---------
There was an increase in cash tied up in inventory for the year
of GBP2.5m. This was due to a combination of higher order books at
year end, the retranslation of inventory held in the US resulting
from a stronger US Dollar, as well as higher prices for certain key
raw materials. The level of inventory, which is highly significant
in cash terms, arises because as an ingredients specialist, Treatt
takes many annual, and in some cases longer-term, contracts with
customers as well as servicing the immediate spot needs of its
diverse customer base. The success of the business has been built
upon managing geographic, political and climatic risk of supply for
our customers by judicious purchasing and inventory management to
ensure continuity of supply and availability. Therefore it is part
of the Group's business model to hold significant levels of
inventory, although typically less than 5% is on average more than
a year old.
UK Site relocation
As explained in the Chairman' Statement and CEO Report, we
continue to progress detailed plans for relocating our UK business
from its current site in Bury St. Edmunds, UK, to a brand new
purpose-built facility. This is a project which the Board believes
is essential in order to deliver our growth objectives over the
medium to long term.
Although a project such as this is extremely complex, and since
the detailed design briefs have yet to be put out to tender, all
costings are by their nature estimates and have not been contracted
for at this stage. Due to the many stakeholders involved, key
elements of the timelines for the move such as planning approvals
are outside our control and are also potentially subject to
change.
Nevertheless we want to keep shareholders appraised of
developments and the following table breaks down the latest cost
estimates for the project. Note that these include costs to upgrade
our plant and machinery and new technologies. As a business we keep
abreast of new technologies which can add value to our operations
and the move gives us the opportunity to incorporate some of these
in the design and build of the new facility. The level of
investment in this area is still subject to review but current
estimates are in the order of GBP3m - GBP5m.
The overall costs of this move break down into four key elements
with the latest estimated costs as follows:
GBP20m -
Land, buildings, and move costs: GBP26m
Capital projects held back over GBP3m -
the last three years: GBP5m
Upgraded plant and machinery and GBP3m -
new technologies GBP5m
Less: Disposal of current site (GBP5m)
================================== =========
Total estimated cash outflow over GBP21m -
2-3 years: GBP31m
================================== =========
We hope to be in a position to commence the planning application
process in early 2017, with construction estimated to begin in
early 2018 with the new site being up and running by late 2019.
Treatt Employee Benefit Trust and Treatt SIP Trust
The Group has an HMRC-approved Share Incentive Plan (SIP) for
its UK employees, and as far as practicable, also offers a similar
scheme to its US staff. All UK staff with a year's service were
awarded GBP525 (2015: GBP500) of 'Free Shares' during the year as
part of the Group's employee incentive and engagement programme as
the Board are firmly of the view that increased employee share
ownership is an important tool for driving positive employee
engagement in the business. A similar scheme exists for US staff
who were awarded $825 (2015: $800) of Restricted Stock Units during
the year. These shares are forfeited by employees who leave within
three years from the date of grant.
Under the SIP UK employees could also purchase GBP1,800 of
Treatt shares out of gross income at no cost to the company which
the company matched on a one for one basis. In the year a total of
52,000 (2015: Nil) matching shares were granted.
During the year, 160,000 (2015: 90,000) shares were issued to
the SIP at par (2 pence per share). The SIP currently holds 241,000
shares (2015: 88,000), of which 17,000 are beneficially owned by
the company. It is anticipated that going forward the obligations
under the SIP will be satisfied through the issue of further
shares.
In addition, the Group continued its annual programme of
offering share option saving schemes to staff in the UK and USA.
Under US tax legislation, staff at Treatt USA are able to exercise
options annually, whilst the UK schemes provide for three-year
saving plans.
Under the Long Term Incentive Plans which were approved by
shareholders at the 2014 Annual General Meeting, Executive
Directors and certain key employees were granted 520,000 nil cost
share options during the year which will vest after three years on
a sliding scale, subject to performance conditions. In total,
options were granted over 806,000 (2015: 783,000) shares during the
year, whilst 159,000 (2015: 220,000) were exercised from options
awarded in prior years which have now vested.
The Employee Benefit Trust (EBT) currently holds 577,000 shares
(2015: 736,000) acquired in the market in order to satisfy future
option schemes. It is anticipated that going forward, all-employee
savings-related share schemes will continue to be satisfied by
shares held within the EBT, but that when necessary further shares
will be issued to the EBT by increasing the share capital of the
Parent Company.
Final Salary Pension Scheme
The R C Treatt final salary pension scheme (the "scheme") has
not been subject to any further accruals since 31 December 2012 and
instead members of the final salary pension scheme were offered
membership of the company's defined contribution pension plan with
effect from 1 January 2013. This means that the defined benefit
scheme has been de-risked as far as it is practicable and
reasonable to do so.
The last three-year actuarial review of the scheme was carried
out as at 1 January 2015, the result of which was that the scheme
had an actuarial surplus of GBP314,000. Consequently, the company
was able to agree with the trustees that with effect from 1 October
2015 it did not need to make any further contributions to the
scheme. It was further agreed that if the annual actuarial funding
updates, before the next full actuarial review in 2018, reveal that
the funding level has fallen to 95% or less of the scheme
liabilities, then the company would voluntarily resume
contributions.
As required by The Pension Regulator, the actuarial review was
updated on a consistent basis as at 30 September 2016 and, in
common with most other final salary pension schemes, this revealed
an actuarial deficit of GBP1.7m, being a funding level of 92%
(2015: 103%). The reduction in the funding level largely resulted
from a fall in the assumed future investment returns for the fund.
The company has therefore agreed to resume its previous
contributions of GBP300k per annum on a voluntary basis until such
time as the fund returns to surplus.
Alongside this, the IAS 19, "Employee Benefits" pension
liability in the balance sheet, net of deferred tax, increased in
the year from GBP2.4m to GBP6.1m. This is the largest gap between
the actuarial and accounting positions since the introduction of
IFRS in 2005. The principal cause of this difference is that IAS 19
requires that investment returns must reflect a 100% corporate bond
return of 2.6%, whereas the actuarial calculations are based on the
actual investment strategy for which returns of 5.35% and 3.45% for
pre and post-retirement returns was assumed.
Financial Risk Management
The Group operates conservative treasury policies to ensure that
no unnecessary risks are taken with the Group's assets.
No investments other than cash and other short-term deposits are
currently permitted. Where appropriate these balances are held in
foreign currencies, but only as part of the Group's overall hedging
activity as explained below.
The nature of Treatt's activities is such that the Group could
be affected by movements in certain exchange rates, principally
between Sterling and the US Dollar, but other currencies such as
the Euro can have a material effect as well. This risk manifests
itself in a number of ways.
Firstly, the value of the foreign currency net assets of Treatt
USA and the overseas Earthoil companies can fluctuate with
Sterling. Currently these are not hedged as the risks are
considered insufficient to justify the cost of putting the hedge in
place.
Secondly, with R C Treatt exporting throughout the world,
fluctuations in Sterling's value can affect both the gross margin
and operating costs. Sales are principally made in two currencies
in addition to Sterling, with the US Dollar being the most
significant. Even if a sale is made in Sterling, its price may be
set by reference to its US Dollar denominated raw material price
and therefore has an impact on the Sterling gross margin. Raw
materials are also mainly purchased in US Dollars and therefore US
Dollar bank accounts are operated, through which US Dollar
denominated sales and purchases flow. Hence it is Sterling's
relative strength against the US Dollar that is of prime
importance.
As well as affecting the cash value of sales, US Dollar exchange
movements can also have a significant effect on the replacement
cost of stocks, which affects future profitability and
competitiveness.
The Group therefore has a policy of maintaining the majority of
cash balances, including the main Group overdraft facilities, in US
Dollars and, to a lesser extent in Euros, as this is the most cost
effective means of providing a natural hedge against movements in
exchange rates. Where it is more cost effective to do so, the Group
will enter into forward currency contracts and options as well.
Consequently, during the year forward currency contracts and
options have been entered into which hedge part of R C Treatt's
foreign exchange risk. These contracts and options have been
designated as formal 'hedge' arrangements, with movements in
mark-to-market valuations initially taken to equity and re-cycled
to the income statement to match with the appropriately hedged
currency receipts. Currency accounts are also run for the other
main currencies to which R C Treatt is exposed. This policy is
expected to protect the Group against short-term swings in
currencies.
Summary
In 2012 we embarked on a clear strategy for the Group to deliver
long term, sustainable, growth in profits. Last year we refreshed
our strategy through to 2020 by setting ourselves new goals whilst
continuing with our central strategic objective of continual,
steady, growth in profits which is sustained through a clear focus
on long term thinking.
We can therefore look back on another successful year both in
terms of profitability, but equally importantly in terms of cash
performance. As we look ahead to the new financial year, which has
got off to an encouraging start, the Group's cash position puts the
business in a strong position to make the very important
investments needed to enable the Group to drive value for all
stakeholders.
RICHARD HOPE
Finance Director
28 November 2016
* All measures are adjusted to exclude exceptional items.
TREATT PLC
FULL YEAR RESULTS
GROUP INCOME STATEMENT
for the year ended 30 September 2016
2016 2015
Notes GBP'000 GBP'000
Revenue 6 88,040 85,934
Cost of sales (67,639) (66,955)
---------------------------------------- ------ --------- ---------
Gross profit 20,401 18,979
Administrative expenses (10,852) (10,289)
Operating profit 9,549 8,690
Net finance costs (703) (740)
Profit before taxation and exceptional
items 8,846 7,950
Exceptional items 7 (553) (174)
Profit before taxation 8,293 7,776
Taxation 8 (2,144) (1,786)
Profit for the period attributable to
owners of the Parent Company 6,149 5,990
Earnings per share
Basic 9 11.85p 11.64p
Diluted 9 11.68p 11.55p
Adjusted basic 9 12.84p 11.94p
Adjusted diluted 9 12.65p 11.85p
---------------------------------------- ------ --------- ---------
All amounts relate to continuing operations
The notes set out below form part of this full year
results announcement
GROUP STATEMENT OF COMPREHENSIVE INCOME
for the year ended 30 September 2016
2016 2015
GBP'000 GBP'000
--------
Profit for the period attributable to
owners of the Parent Company 6,149 5,990
Other comprehensive income/(expense):
Items that may be reclassified subsequently
to profit or loss:
Currency translation differences on
foreign currency net investments 2,576 830
Current tax on foreign currency translation
differences - (2)
Fair value movement on cash flow hedges 120 (404)
Deferred tax on fair value movement (47) 81
--------------------------------------------- -------- --------
2,649 505
--------------------------------------------- -------- --------
Items that will not be reclassified
subsequently to profit or loss:
Actuarial loss on defined benefit pension
scheme (4,297) (638)
Current tax credit on actuarial loss - 43
Deferred tax credit on actuarial loss 643 86
--------------------------------------------- -------- --------
(3,654) (509)
--------------------------------------------- -------- --------
Other comprehensive expense for the
period (1,005) (4)
--------------------------------------------- -------- --------
Total comprehensive income for the period
attributable
to owners of the Parent Company 5,144 5,986
--------------------------------------------- -------- --------
The notes set out below form part of this full year
results announcement
GROUP STATEMENT OF CHANGES IN EQUITY
for the year ended 30 September 2016
Own
shares Foreign
Share Share in share Hedging exchange Retained Total
capital premium trusts reserve reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------- --------- --------- ---------- --------- ---------- ---------- --------
1 October 2014 1,048 2,757 (549) (377) 291 25,590 28,760
------------------------- --------- --------- ---------- --------- ---------- ---------- --------
Net profit for the
period - - - - - 5,990 5,990
Other comprehensive
income:
Exchange differences - - - - 830 - 830
Fair value movement
on cash flow hedges - - - (404) - - (404)
Actuarial loss on
defined benefit
pension scheme - - - - - (638) (638)
Taxation relating
to items above - - - 81 (2) 129 208
------------------------- --------- --------- ---------- --------- ---------- ---------- --------
Total comprehensive
income - - - (323) 828 5,481 5,986
------------------------- --------- --------- ---------- --------- ---------- ---------- --------
Transactions with
owners:
Dividends - - - - - (1,978) (1,978)
Share-based payments - - - - - 201 201
Movement in own shares
in share trust - - 128 - - - 128
Gain on release of
shares in share trust - - - - - 52 52
Issue of share capital 2 - (2) - - - -
Taxation relating
to items recognised
directly in equity - - - - - 36 36
1 October 2015 1,050 2,757 (423) (700) 1,119 29,382 33,185
------------------------- --------- --------- ---------- --------- ---------- ---------- --------
Net profit for the
period - - - - - 6,149 6,149
Exchange differences - - - - 2,576 - 2,576
Fair value movement
on cash
flow hedges - - - 120 - - 120
Actuarial loss on
defined benefit
pension scheme - - - - - (4,297) (4,297)
Transfer between
reserves - - - - (20) 20 -
Taxation relating
to items above - - - (47) - 643 596
------------------------- --------- --------- ---------- --------- ---------- ---------- --------
Total comprehensive
income - - - 73 2,556 2,515 5,144
------------------------- --------- --------- ---------- --------- ---------- ---------- --------
Transactions with
owners:
Dividends - - - - - (2,095) (2,095)
Share-based payments - - - - - 597 597
Movement in own shares
in share trusts - - 94 - - - 94
Gain on release of
shares in share trusts - - - - - 171 171
Issue of share capital 3 - (3) - - - -
Taxation relating
to items recognised
directly in equity - - - - - 91 91
------------------------- --------- --------- ---------- --------- ---------- ---------- --------
30 September 2016 1,053 2,757 (332) (627) 3,675 30,661 37,187
------------------------- --------- --------- ---------- --------- ---------- ---------- --------
The notes set out below form part of this full year results
announcement
GROUP BALANCE SHEET
as at 30 September 2016
2016 2015
GBP'000 GBP'000
----------
ASSETS
Non-current assets
Goodwill 2,727 1,075
Other intangible assets 637 661
Property, plant and equipment 11,361 10,998
Deferred tax assets 1,436 647
16,161 13,381
Current assets
Inventories 29,990 25,799
Trade and other receivables 17,853 17,635
Current tax assets 4 134
Cash and bank balances 6,588 1,477
54,435 45,045
Total assets 70,596 58,426
LIABILITIES
Current liabilities
Borrowings (487) (567)
Provisions (67) (239)
Trade and other payables (14,151) (10,885)
Current tax liabilities (999) (810)
Derivative financial instruments (9) (305)
Redeemable loan notes payable (675) (675)
(16,388) (13,481)
Net current assets 38,047 31,564
Non-current liabilities
Borrowings (7,755) (7,065)
Post-employment benefits (7,401) (2,959)
Deferred tax liabilities (1,111) (1,037)
Derivative financial instruments (754) (699)
(17,021) (11,760)
Total liabilities (33,409) (25,241)
Net assets 37,187 33,185
---------------------------------------------------------------------- ---------- ----------
GROUP BALANCE SHEET (continued)
as at 30 September 2016
2016 2015
GBP'000 GBP'000
--------
EQUITY
Share capital 1,053 1,050
Share premium account 2,757 2,757
Own shares in share trusts (332) (423)
Hedging reserve (627) (700)
Foreign exchange reserve 3,675 1,119
Retained earnings 30,661 29,382
------------------------------------- -------- --------
Total equity attributable to owners
of the Parent Company 37,187 33,185
------------------------------------- -------- --------
The notes set out below form part of this full year
results announcement
GROUP STATEMENT OF CASH FLOWS
for the year ended 30 September 2016
2016 2015
GBP'000 GBP'000
--------
Cash flow from operating activities
Profit before taxation 8,293 7,776
Adjusted for:
Depreciation of property, plant and
equipment 1,347 1,244
Amortisation of intangible assets 142 175
Loss on disposal of property, plant
and equipment 2 46
Net finance costs 703 740
Share-based payments 566 198
(Increase)/decrease in fair value of
derivatives (122) 143
Increase/(decrease) in post-employment
benefit obligations 145 (208)
------------------------------------------- -------- --------
Operating cash flow before movements
in working capital 11,076 10,114
------------------------------------------- -------- --------
Movements in working capital:
(Increase)/decrease in inventories (2,501) 2,907
Decrease/(increase) in trade and other
receivables 688 (2,282)
Increase/(decrease) in trade and other
payables, and provisions 1,541 (2,072)
Cash generated from operations 10,804 8,667
Taxation paid (2,022) (1,469)
Net cash from operating activities 8,782 7,198
Cash flow from investing activities
Investment in subsidiaries (752) -
Proceeds on disposal of property, plant
and equipment - 5
Purchase of property, plant and equipment (679) (924)
Purchase of intangible assets (109) (108)
Interest received 8 1
(1,532) (1,026)
------------------------------------------- -------- --------
GROUP STATEMENT OF CASH FLOWS (continued)
for the year ended 30 September 2016
2016 2015
GBP'000 GBP'000
--------
Cash flow from financing activities
Increase/(decrease) in bank loans 381 (2,145)
Interest paid (711) (741)
Dividends paid (2,095) (1,978)
Net sale of own shares by share trusts 265 180
------------------------------------------- -------- --------
(2,160) (4,684)
------------------------------------------- -------- --------
Net increase in cash and cash equivalents 5,090 1,488
Effect of foreign exchange rates 15 (33)
Movement in cash and cash equivalents
in the period 5,105 1,455
Cash and cash equivalents at beginning
of period 1,476 21
Cash and cash equivalents at end of
period 6,581 1,476
Cash and cash equivalents comprise:
Cash and bank balances 6,588 1,477
Bank borrowings (7) (1)
6,581 1,476
------------------------------------------- -------- --------
The notes set out below form part of this full year
results announcement
GROUP RECONCILIATION OF NET CASH FLOW TO MOVEMENT
IN NET DEBT
for the year ended 30 September 2016
2016 2015
GBP'000 GBP'000
--------
Movement in cash and cash equivalents
in the period 5,105 1,455
Repayment/(increase) in bank loans (381) 2,145
Cash outflow from changes in net debt
in the period 4,724 3,600
Effect of foreign exchange rates (223) (171)
Movement in net debt in the period 4,501 3,429
Net debt at beginning of period (6,155) (9,584)
Net debt at end of period (1,654) (6,155)
--------
The notes set out below form part of this full year
results announcement
NOTES TO THE FULL YEAR RESULTS
1. Basis of preparation
In accordance with Section 435 of the Companies Act 2006, the
Group confirms that the financial information for the years ended
30 September 2016 and 2015 are derived from the Group's audited
financial statements and that these are not statutory accounts and,
as such, do not contain all information required to be disclosed in
the financial statements prepared in accordance with International
Financial Reporting Standards ("IFRS"). The statutory accounts for
the year ended 30 September 2015 have been delivered to the
Registrar of Companies. The statutory accounts for the year ended
30 September 2016 have been audited and approved, but have not yet
been filed.
The Group's audited financial statements for the year ended 30
September 2016 received an unqualified audit opinion and the
auditor's report contained no statement under section 498(2) or
498(3) of the Companies Act 2006.
The financial information contained within this preliminary
statement was approved and authorised for issue by the Board on 28
November 2016.
2. Accounting policies
These financial statements have been prepared in accordance with
the accounting policies set out in the full financial statements
for the year ending 30 September 2015.
There were no new standards and amendments to standards which
are mandatory and relevant to the Group for the first time for the
financial year ending 30 September 2016 which had a material effect
on this preliminary statement.
3. Accounting estimates
The preparation of the preliminary statement requires management
to make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of
assets and liabilities, income and expenses. In preparing this
preliminary statement, the significant judgements made by
management in applying the Group's accounting policies and the key
sources of estimation uncertainty were the same as those applied to
the audited consolidated financial statements as at, and for the
year ended, 30 September 2015.
4. Going concern
As at the date of this report, the Directors have a reasonable
expectation that the Group has adequate resources to continue in
business for the foreseeable future. During the year all the
Group's expiring banking facilities have been renewed on existing
or improved terms. Accordingly, this preliminary statement has been
prepared on the going concern basis.
5. Risks and uncertainties
The operation of a public company involves a series of risks and
uncertainties across a range of strategic, commercial, operational
and financial areas. The principal risks and uncertainties that
could have a material impact on the Group's performance over the
next twelve months (for example, causing actual results to differ
materially from expected results or from those experienced
previously) are the same in all material respects as those detailed
on pages 23-26 of the 2015 Annual Report and Financial
Statements.
6. Segmental information
Business segments
IFRS 8 requires operating segments to be identified on the basis
of internal financial information reported to the Chief Operating
Decision Maker (CODM). The Group's CODM has been identified as the
Board of Directors who are primarily responsible for the allocation
of resources to the segments and for assessing their performance.
The disclosure in the Group accounts of segmental information is
consistent with the information used by the CODM in order to assess
profit performance from the Group's operations.
The Group operates one global business segment engaging in the
manufacture and supply of ingredient solutions for the flavour,
fragrance and FMCG markets with manufacturing sites in the UK, US
and Kenya. Many of the Group's activities, including sales,
manufacturing, technical, IT and finance, are managed globally on a
Group basis.
Geographical segments
The following table provides an analysis of the Group's revenue
by geographical market:
2016 2015
Revenue by destination GBP'000 GBP'000
--------------
United Kingdom 8,794 10,878
----------------------------------- -------------- --------------
Rest of Europe - Germany 5,527 4,576
- Ireland 5,871 7,903
- Other 11,011 10,834
---------------------------------- -------------- --------------
The Americas - USA 33,729 27,447
- Other 4,142 6,721
---------------------------------- -------------- --------------
Rest of the
World - China 4,536 4,840
- Other 14,430 12,735
---------------------------------- -------------- --------------
88,040 85,934
----------------------------------- -------------- --------------
All Group revenue is in respect of the sale of goods, other than
property rental income of GBP17,000 (2015: GBP17,000). No country
included within 'Other' contributes more than 5% of the Group's
total revenue. There were no customers which represented more than
10% of Group revenue (2015: largest customer represented 12.1% of
Group revenue).
7. Exceptional items
The exceptional items referred to in the income statement can be
categorised as follows:
2016 2015
GBP'000 GBP'000
--------
Legal and professional fees 302 174
Compensation for loss of office 251 -
--------------------------------------- -------- --------
553 174
Less: tax effect of exceptional items (38) (18)
--------------------------------------- -------- --------
515 156
--------
The exceptional items in the year all relate to non-recurring
items. The legal and professional fees relate to the costs in
respect of the full and final settlement of the Earthoil earnout
dispute. The restructuring costs relate to one-off non-recurring
reorganisation costs incurred in the US and Kenya.
8. Taxation
2016 2015
GBP'000 GBP'000
--------
Analysis of tax charge for the year
Current tax:
UK corporation tax on profits for
the period 967 956
Adjustments to UK tax in respect of
previous period 9 (11)
Overseas corporation tax on profits
for the period 1,370 931
Adjustments to overseas tax in respect
of previous periods 8 33
Total current tax 2,354 1,909
------------------------------------------ -------- --------
Deferred tax:
Origination and reversal of timing
differences (179) (59)
Effect of reduced tax rate on opening
assets and liabilities (27) -
Adjustments in respect of previous
periods (4) (64)
Total deferred tax (210) (123)
------------------------------------------ -------- --------
Tax on profit on ordinary activities 2,144 1,786
------------------------------------------ -------- --------
Analysis of tax charge/(credit) in
other comprehensive income (OCI):
Current tax:
Foreign currency translation differences - 2
Actuarial loss on defined benefit
pension scheme - (43)
Total current tax - (41)
------------------------------------------ -------- --------
Deferred tax:
Cash flow hedges 47 (81)
Actuarial loss on defined benefit
pension scheme (643) (86)
Total deferred tax (596) (167)
------------------------------------------ -------- --------
Total tax credit recognised in OCI (596) (208)
------------------------------------------ -------- --------
Analysis of tax charge/(credit) in
equity:
Current tax:
Share-based payments (16) (38)
Deferred tax:
Share-based payments (75) 2
Total tax credit recognised in equity (91) (36)
------------------------------------------ -------- --------
9. Earnings per share
Basic earnings per share
Basic earnings per share is based on the weighted average number
of ordinary shares in issue and ranking for dividend during the
year. The weighted average number of shares excludes shares held by
the Treatt Employee Benefit Trust (EBT), together with shares held
by the Treatt SIP Trust (SIP), which do not rank for dividend.
2016 2015
Earnings (GBP'000) 6,149 5,990
Weighted average number of ordinary
shares in issue (No: '000) 51,895 51,464
Basic earnings per share (pence) 11.85p 11.64p
-------
Diluted earnings per share
Diluted earnings per share is based on the weighted average
number of ordinary shares in issue and ranking for dividend during
the year, adjusted for the effect of all dilutive potential
ordinary shares. The number of shares used to calculate earnings
per share (EPS) have been derived as follows:
2016 2015
No ('000) No ('000)
----------
Weighted average number of shares 52,575 52,450
Weighted average number of shares
held in the EBT and SIP (680) (986)
Weighted average number of shares
used for calculating basic EPS 51,895 51,464
Executive share option schemes 645 262
All-employee share options 122 152
----------
Weighted average number of shares
used for calculating diluted EPS 52,662 51,878
----------
Diluted earnings per share (pence) 11.68p 11.55p
----------
Adjusted earnings per share measures are calculated based on
profits for the year attributable to owners of the Parent Company
before exceptional items as follows:
2016 2015
GBP'000 GBP'000
--------
Earnings for calculating basic and
diluted earnings per share 6,149 5,990
Adjusted for:
Exceptional items (see note 7) 553 174
Taxation thereon (38) (18)
Earnings for calculating adjusted
earnings per share 6,664 6,146
--------
Adjusted basic earnings per share
(pence) 12.84p 11.94p
--------
Adjusted diluted earnings per share
(pence) 12.65p 11.85p
--------
10. Dividends
Equity dividends on ordinary shares:
Dividend per share
for years ended
30 September:
2016(2) 2015(1) 2014(1) 2016 2015
Pence Pence Pence GBP'000 GBP'000
------------------ -------- -------- -------- -------- --------
Interim dividend 1.35p 1.28p 1.24p 662 638
Final dividend 3.00p 2.76p 2.60p 1,433 1,340
------------------ -------- -------- -------- -------- --------
4.35p 4.04p 3.84p 2,095 1,978
-------- -------- -------- --------
(1) Accounted for in the subsequent year in accordance with
IFRS.
(2) The declared interim dividend for the year ended 30
September 2016 of 1.35 pence was approved by the Board on 13 May
2016 and in accordance with IFRS has not been included as a
deduction from equity at 30 September 2016. The dividend was paid
on 14 October 2015 to those shareholders on the register at 9
September 2016. The proposed final dividend for the year ended 30
September 2016 of 3.00 pence will be voted on at the Annual General
Meeting on 27 January 2017. Both dividends will therefore be
accounted for in the financial statements for the year ending 30
September 2017.
11. Related party transactions
Treatt Plc, the Parent Company, entered into the following
material transactions with related parties:
Transactions with subsidiaries
2016 2015
GBP'000 GBP'000
--------
Interest received on loan notes from:
Earthoil Plantations Limited 4 14
Earthoil Kenya PTY EPZ Limited 2 6
Dividends received from:
R C Treatt & Co Limited 1,862 3,072
Treatt USA Inc 1,037 1,021
Balances with subsidiaries:
2016 2015
GBP'000 GBP'000
--------
Redeemable loan notes receivable:
Earthoil Plantations Limited 950 950
Earthoil Kenya PTY EPZ Limited 400 400
Amounts owed to/(by) parent undertaking:
Earthoil Plantations Limited 13 (61)
R C Treatt & Co Limited (712) 116
------------------------------------------ -------- --------
The redeemable loan notes were redeemed in full after the
balance sheet date. Interest is receivable at 1% above UK base
rate. Amounts owed to the Parent Company are unsecured and will be
settled in cash.
CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING STATEMENTS
This announcement contains forward-looking statements that are
subject to risk factors associated with, among other things, the
economic and business circumstances occurring from time to time in
the countries, sectors and markets in which the Group operates. It
is believed that the expectations reflected in these statements are
reasonable but they may be affected by a wide range of variables
which could cause actual results to differ materially from those
currently anticipated. No assurances can be given that the
forward-looking statements in this announcement will be realised.
The forward-looking statements reflect the knowledge and
information available at the date of preparation of this
announcement and the Group undertakes no obligation to update these
forward-looking statements. Nothing in this announcement should be
construed as a profit forecast.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR FEWESAFMSESF
(END) Dow Jones Newswires
November 29, 2016 02:00 ET (07:00 GMT)
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