Sweet smell of success as Treatt lifts profits 31%

TREATT, the USM-quoted supplier of essential oils, has reported better than expected pre-tax profits of pounds 1.7m for the year to September 1993, up 31 per cent on the previous year.

Turnover - which reached pounds 15.4m - rose significantly in the developing markets of the Far East, many of which are also important sources of Treatt's raw materials. Sales in the US improved substantially as well, taking the Florida subsidiary set up three years ago into profit for the first time.

Treatt imports basic essential oils such as sandalwood, clove and citrus, refines them and produces blends for customers to add to products ranging from detergents to food and drink.

It will not name its customers since they usually need to keep product ingredients a secret from competitors.

Treatt has announced it will double distilling capacity, which should reduce costs significantly, from mid-1994.

The company has seen steady improvements in margins in the four years since flotation, thanks to the fashion for natural ingredients. Natural flavours and perfumes sell for up to 50 times more than artificial versions.

Hugo Bovill, managing director of the family-run firm, said this trend was important, but the greater potential lay in developing country markets where 85 per cent of the world's population accounted for only a quarter of world consumption of essential oils.

Treatt's share price closed up 13p at 180p.