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Investing.com -- Treatt plc (LON:TET) on Thursday lowered its full-year 2025 guidance, now expecting profit before tax and exceptional items (PBTE) of £9-11 million, down from its previous forecast of £16-18 million.
The revised guidance implies second-half PBTE of £6.4 million, representing a 46% decrease compared to Jefferies’ estimate of £11.9 million and a 49% drop versus consensus expectations of £12.4 million.
The flavor and fragrance ingredients company also reduced its sales forecast to £130-135 million, down from the previously guided range of £146-153 million.
Second-half sales are now expected to reach £66 million, assuming the lower end of the full-year guidance, which marks a 19% decline compared to analyst expectations of £82 million and an 18% year-over-year decrease.
Treatt attributed the downgrade to several factors, including a foreign exchange headwind of approximately £0.5 million.
The company highlighted continued challenging demand in its Heritage segment due to sustained high citrus oil prices affecting buying patterns and leading to reformulation.
These pricing pressures have impacted both short-term purchasing behavior for value-added citrus products and citrus margins.
Additionally, weaker consumer confidence in the United States, coupled with geopolitical and tariff uncertainty, is negatively affecting the overall beverage market in North America.
Jefferies maintains a "Buy" rating on Treatt shares with a price target of 350 pence, representing a 38% upside potential from the current share price of 253 pence.
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