Oranges are not Treatt’s only fruit

Reporting a 12% boost in revenues to £63.3 million (2009: £56.3m) and pre-tax profit 29% higher at £4.5 million (2009: £3.5m) for the year ended 30 September 2010, Treatt said that towards the end of the 2009 financial year there was a weakening of demand and this trend continued into the first quarter of the 2010 financial year. However, in January 2010 demand began to recover and sales rose sharply, reaching record levels in terms of both volumes and value Looking ahead, chairman James Grace reported that "to fully set out the prospects for the current year is not easy". Treatt's most significant raw material is orange oil, with the value of sales of orange oil products representing 17% of revenue As a result of unprecedented climatic conditions, including a drought in Brazil and a freeze in Florida, coupled with high demand for orange oil co-products, orange oil prices have risen from their more usual $2 a kilogram to reach historic highs of well over $6/kg. This volatility can lead to significant stock profits but also to high levels of risk in terms of managing the group's supply pipeline when prices fall back, grace said. However, the new financial year has started very well with both sales and margins significantly up and "as the world continues to eat, drink and buy cosmetics, regardless of economic conditions ... Treatt remains well placed to take advantage of competitive opportunities".