Final Results

Treatt PLC
11 December 2000

     
                                                                              
                                  TREATT PLC                                  

                            PRELIMINARY STATEMENT                            

                     For the year ended 30 September 2000                     

Treatt PLC, the manufacturer and supplier of flavour and fragrance
ingredients, announces today its preliminary results for the year ended 30
September 2000. 

SUMMARY

* Group turnover increased by 7% to £24.1m (1999: £22.4m)

* Profit before tax increased by 6% to £2.72m (1999: £2.57m)

* Earnings per share increased by 4% to 19.3p (1999: 18.5p)

* Total dividend increased by 10% to 7.8p (1999: 7.1p)

For further information please contact:

Treatt PLC                                                       01284 702500
Hugo Bovill, Managing Director

GCI Financial                                                    0207 398 0800
Margaret Jervoise/Richard Sunderland

The full text of the Chairman's Statement, Operating and Financial reviews,
Preliminary figures and a background note are attached.


CHAIRMAN'S STATEMENT


2000 was a satisfactory year for Treatt.  Profit before tax increased by 6 per
cent to £2.72 million (1999: £2.57 million).  Earnings per share for the year
at 19.3 pence has increased by 4 per cent on 1999.  The Board is recommending
a final dividend of 5.3 pence (1999: 4.9 pence), giving a 10 per cent increase
in the total dividend for the year to 7.8 pence (1999: 7.1 pence).  

A good performance at Florida Treatt has assisted the increase in Group
profits.  The increased sales of the Group's citrus specialties into the
U.S.A. market and export sales of the Florida produced Treattarome(tm) range
made a strong contribution to their successful year. Sales of aroma chemicals
by R.C.Treatt also grew strongly. Last year we referred to a possible
Millennium effect. We believe this resulted in lower sales of essential oils
to some of our major customers during the second half of this year. Sales of
distributed aroma chemicals in the UK continued to grow strongly.  

The Group has continued to invest in plant and machinery expanding our
distribution operations.  This additional capacity is now in place and is
already beginning to show benefits. As referred to in last  year's statement
we continued to invest heavily in information technology albeit more slowly
than we had originally envisaged.


Prospects
Current year trading has started better than last year with some major
customers calling for deliveries that we expected to make in the preceding
year. As we previously forecast there has been further significant
consolidation in the flavour and fragrance industry but it is too early to
predict its effect. The aroma chemical distribution side of our business
continues to grow whilst we have discussions with our partners about widening
our geographical coverage.  We have strengthened the Florida sales team and we
expect to see the benefit over the coming years.


People
Stephen Ashton our Finance Director resigned in September to take up the
position of Finance Director of Marks & Spencer Ventures.  We have benefited
enormously from Stephen's period as our Finance Director and his enthusiasm
and energy will be greatly missed. We wish him well in his new appointment.

We are pleased to say that Mark Bottjer, aged 40, joined the Company as Group
Finance Director on 7 December 2000.  Mark has spent the last two years
working at an operational and corporate level with Associated British Foods
plc, having qualified as a Chartered Accountant in 1986. 

In July we appointed David Coverdale as director of I.T. to design and
implement our I.T. strategy. David has worked as an I.T. Director for the
Prudential, Unum, Granada and Matthew Clark.

Finally I would like to thank all of our employees, in England, Florida and
Singapore for their continued commitment and skill. Delivering increased
profits, whilst implementing the changes required by our capital investment
and re-engineering programme demands both of these qualities.  We are
fortunate to have such an experienced and dedicated team.


GEOFFREY BOVILL
Chairman
8 December 2000

OPERATING REVIEW


During 2000 the Group's main blending and distribution facilities in the U.K.
have undergone major changes in order to improve our customer service and to
increase our production capacity.  These changes have already proved
worthwhile. 


Trading
R.C. Treatt
Growth at RC Treatt was mainly in aroma chemical sales within the U.K. 
Overall chemical sales increased by over 15 per cent as the volume of orders
rose by 13 per cent.  Last year we referred to a possible Millennium effect. 
It became apparent during the last financial year that some of our major
customers were over stocked as a result of actions taken to ensure they had
adequate inventories at the end of December 1999.  We believe these actions
caused our sales of essential oils in particular to drop substantially.  This
effect was countered by increased sales to other customers so that turnover
overall rose by 7.5 per cent.

Without the changes implemented in our production area during the year, we
would have been unable to meet customers' expectations in terms of service. 
Our essential oil distillation facilities worked a full two shifts during the
year fulfilling requirements for export markets.

Florida Treatt
2000 was a good year for the Group's American subsidiary, in particular in the
second half with some new wins for the tropical Treattarome(tm) range for
application in juice based drinks.  Whether these are purely seasonal launches
or will become permanent consumer products is as yet unknown.  Florida
Treatt's customer base continues to widen both in the USA and overseas.  We
have consolidated our local management and strengthened our sales team.

Singapore Treatt
Order levels and the general business climate continued to improve during the
year as local economies stabilised and confidence began to return.  Orders and
inquiries from this branch office increased steadily throughout the year.  The
prospects seem brighter.  


Investment for the Future
R.C. Treatt
The changes within our warehouse and blending facility have now been
satisfactorily completed and this will enable us to grow our business whilst
maintaining our levels of customer service.  Our Customer Relationship
Management system which was expected to be fully commissioned by the end of
the financial year has been delayed but will be fully implemented in the
second half of this year.  We continue to believe that investment in I.T. will
ensure profitable growth.  With the appointment of a director of I.T. we
believe that we will be better placed to take advantage of the 
technology.  In the current financial year we will continue to invest by
making improvements to other production areas.

Florida Treatt
The Board has decided that in order to develop the potential of the American
market-place our Florida subsidiary will move to new and larger premises. 
This should take place during the next two years. 

Research and Development
The Group continues to invest in new product development of natural products
while utilising our partners for exclusive development of novel synthetic
molecules.  Several new natural specialties were launched which were well
received by perfumers and flavourists but as is normal for our industry it
will be some years before we see any real contribution from these.  Investment
in research and development in 2000 continued to be in excess of £200,000. 


Markets
Sales in the U.K. were up 15 per cent, due largely to the growing aroma
chemicals distribution business.  In the rest of Europe sales were slightly
reduced as a result of lower sales to some of our major customers due to the
Millennium.  In the Americas sales were up, particularly as a consequence of a
17 per cent growth in our Florida subsidiary.

Sales to the rest of the world rose by 5 per cent as the Pacific Rim countries
started to recover from the economic uncertainty of recent years.  


Products
The Group's range of distributed aroma chemicals continues to grow profitably.
 We have further developed relationships with some of our larger principals
and we look forward to widening our geographical coverage of certain of our
distribution arrangements. 

In 2000 cold pressed orange oil, an orange juice by-product, made up well over
half of the Group's raw materials by weight, but only 13 per cent of sales
value.  Volumes fell by over 17 per cent due to continued oversupply as most
customers had bought oil at historically low prices. 

The TreattaromeTM range of natural distillates, manufactured in Florida,
declined due to the reduction in sales of one product used in a cosmetic
product. Sales of the finished product are still continuing but at a lower
rate than originally foreseen.  We were successful with two tropical
Treattarome(tm) products in the European market for the first time.  There are
now eighteen products in the range and we have recently added a new improved
sugar distillate which can be used in conjunction with artificial sweeteners
to give the flavour of sugar without the calories.  We are pleased by
customers' reaction to this product.


Raw Materials
Towards the end of the year the prices of the Group's raw materials began to
strengthen slightly. They had been at historically low price levels.  Orange
oil, the Group's primary raw material, has remained at the historically
expected U.S. $0.90 per kilo.  Irrespective of raw material price levels we
continue to pursue our long term aim of building a business that can grow
profitably whatever the price level.

FINANCIAL REVIEW

Performance Analysis
Profit  and Loss Account
Profit before tax increased 6 per cent in addition to Group turnover
increasing by 7 per cent to £24.1 million (1999: £22.4 million).  These
increases have come from most of the Group's markets, apart from sales into
Continental Europe, which we believe is due to a Millennium buying pattern
from major customers.  We expect this area to return to growth in 2001.  

Gross margins this year are 32.9 per cent (1999: 32.7 per cent).  Due to R.C.
Treatt purchasing most of its major raw materials in U.S. Dollars, if the
Dollar strengthens between the time materials are purchased and then sold on
to customers, inflated margins in Sterling terms result.  This was the case in
1999 and again in 2000. 

The Group's operating costs rose by 9.2 per cent to £4.7 million. Within this,
payroll costs rose by £130,000; property expenses increased by £70,000 with
the acquisition in July 1999 of the new warehouse; and £150,000 was spent on
recruitment and other costs associated with strengthening the management team
to take the Group forward into the new Millennium.

Costs of over £200,000 were incurred as we re-engineered our distribution
business.  Costs of a similar level are likely to be incurred in the coming
year as we continue this process into other areas of our business.

Interest receivable fell due to lower average cash balances through the year. 
Interest payable remained unchanged as the penalty on early repayment during
the year of the Group's long term fixed rate loans matched the interest which
would have been paid.  However, the remaining five years' interest at 9.71 per
cent per annum has been avoided.

The Group's effective tax rate has risen this year to 28.7 per cent.  The
explanation for this and expectations for the future effective rate are
discussed below.

Earnings per share have risen to 19.3 pence per share, an increase of 4 per
cent on 1999; dividends for the year of 7.8 pence per share are covered 2.5
times (1999: 2.6 times).

Cashflow
For the second consecutive year, the Group has seen a reduction in its net
cash position.  Despite the increase in operating profit, cash inflow from
operating activities fell by over £600,000, as working capital increased by
over £2 million.  This increase was in direct response to contracts placed
with us by customers and taking advantage of sensible purchasing
opportunities.  The cost of servicing the Group's finances remained remarkably
low at £42,000.

The Group's capital expenditure totalled £1,186,000 and has continued to be
funded out of operating cashflows as long term projections did not indicate
the Group needing long term funding.   One third of this investment was in
I.T. and a further third in increased production capacity, as referred to in
the Operating Review.

During the year the Group repaid its one remaining long term fixed rate loan,
due in 2005.  This left the Group's net cash position down by £1,238,000 and
standing at £259,000 net debt, gearing of 1.7 per cent at the year end.

Balance Sheet
Over the year Group shareholders funds have risen to £15,222,000 or £1.51 per
share.  The Group's land and buildings are all freehold or very long
leaseholds. 

Group Tax Charge
The Group's tax charge for the year represents an effective rate of 28.7 per
cent (1999: 27.5 per cent).  The rate has risen to this level due to
depreciation being charged on all buildings, to conform with Financial
Reporting Standard 15.  This creates an additional timing difference between
the charge to depreciation and the charge for tax purposes, giving rise to an
increased deferred tax liability.  Whilst these differences are not expected
to reverse for many years, we have anticipated the forthcoming Financial
Reporting Standard on Deferred Taxation, and made full provision for the
liability.  

Based on current expectations the Group rate is likely to increase further in
2001, as historic tax losses in our U.S. subsidiary are fully utilised and
U.S. taxes become payable.


Treasury Policies
The Group operates a conservative set of treasury policies to ensure 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 Groups' overall hedging activity.

Treatt is potentially vulnerable to a number of different foreign exchange
risks, but these can be broken down into two main categories.  

Firstly the value of the foreign currency net assets of Florida Treatt and
Singapore Treatt can fluctuate with Sterling.  These are currently not hedged,
as the risks are considered less than the cost of putting the hedge in place.

Secondly, with R.C. Treatt exporting to over 80 countries, fluctuations in the
value of Sterling can affect both the gross margin and operating costs.  Sales
are principally made in four currencies in addition to Sterling, with the U.S.
Dollar being by far the most significant.  Raw materials are also mainly
purchased in Dollars and so a Dollar bank account is operated to allow Dollar
denominated sales and purchases to flow through this account.  The R.C. Treatt
cashflows are such that over a period of time Dollar inflows and outflows net
out, but if there is a mismatch in any one accounting period and the Sterling
to Dollar exchange rate moves, an exchange difference will arise. Hence it is
Sterling's relative strength against the Dollar which is of prime importance. 
A policy to minimise the Dollar exposures, where possible, is in place.

Currency accounts are also run for the other main currencies to which R.C.
Treatt is exposed.  Based on estimated future cashflows for each currency a
conservative position is taken with forward contracts in order to protect the
Group's asset base.  This policy will protect the Group against the worst of
any short-term swings in currencies but, like any exporter, there are inherent
risks if there is a substantial movement in currencies.

GROUP PROFIT AND LOSS ACCOUNT



                                                       2000              1999
                                            Notes     £'000             £'000


Turnover - continuing operations                1    24,137            22,443

Cost of sales                                       (16,188)          (15,097)
                                                   _________         _________
Gross profit                                          7,949             7,346

Net operating costs                                  (5,184)           (4,749)
                                                   _________         _________
Operating profit                                      2,765             2,597

Net interest payable                                    (42)              (26)
                                                   _________         _________
Profit on ordinary activities before taxation         2,723             2,571

Tax on profit on ordinary activities            2      (782)             (707)
                                                   _________         _________
Profit on ordinary activities after taxation          1,941             1,864 
 
Dividends                                       3      (786)             (716)
                                                   _________         _________
Retained profit for the year                          1,155             1,148
                                                   _________         _________

Dividends per ordinary share                    3      7.8p               7.1p


Earnings per share - basic                      4     19.3p              18.5p
                   - fully diluted              4     19.1p              18.4p


GROUP STATEMENT OF RECOGNISED GAINS AND LOSSES


                                                      2000               1999
                                                     £'000              £'000



Profit for the financial year before dividends       1,941              1,864

Exchange differences on foreign currency               309                  9
net investments                
                                                  _________          _________
Total recognised gains and losses                    2,250              1,873
                                                  _________          _________

The figures for the years ended 30 September 2000 and 1999 are an abridged
version of the Group's audited financial statements.  The figures for the year
ended 30 September 1999 have been delivered to the Registrar of Companies. 
These statements received an unqualified audit opinion and the auditors'
report contained no statement under section 237(2) or 237(3) of the Companies
Act 1985.

GROUP BALANCE SHEET           
               
                                                      2000               1999
                                                     £'000              £'000

Tangible fixed assets                                5,831              5,117


Current assets

Stocks                                       9,275             8,211
Debtors                                      4,384             3,692
Cash at bank and in hand                       169             1,689
                                           ________          ________
                                            13,828            13,592
                                           ________          ________

Creditors: amounts falling due in one year
Bank loans and overdrafts                     (428)             (710)

Other creditors                             (3,862)           (4,204)
                                           ________          ________
                                            (4,290)           (4,914)
                                           ________          ________

Net current assets                                   9,538              8,678
                                                   ________           ________
Total assets less current liabilities               15,369             13,795

Deferred tax                                          (147)               (37)
                                                   ________           ________
Net assets                                          15,222             13,758
                                                   ________           ________


Share capital                                        1,008              1,008
Share premium account                                1,929              1,929
Profit and loss account                             12,285             10,821
                                                   ________           ________
Shareholders' funds - equity interest               15,222             13,758
                                                   ________           ________




GROUP CASH FLOW STATEMENT
                                                      2000               1999
                                                     £'000              £'000

Operating profit                                     2,765              2,597

Depreciation charge                                    551                505

Increase in stock                                   (1,064)            (1,484)

Net (increase) /decrease in remaining working 
capital and other items                               (888)               426
                                                  _________          _________

Cash inflow from operating activities                1,364              2,044

Return on investments and servicing of  finance        (42)               (26)

Taxation                                              (736)              (679)

Capital expenditure                                 (1,129)            (1,361)

Equity dividends paid                                 (715)              (646)
                                                  _________          _________
Cash outflow before financing                       (1,258)              (668)

Financing - reduction in debt                         (710)              (499)
                                                  _________          _________

Decrease in funds in the year                       (1,968)            (1,167)
                                                  _________          _________


RECONCILATION OF NET CASH FLOW TO DECREASE IN FUNDS:

                                                      2000               1999
                                                      £000               £000


Decrease in funds in the year                       (1,968)            (1,167)
Cash outflow from decrease in debt                     710                499
Exchange difference                                     20                  4
                                                  _________          _________
Decrease in net funds in the year                   (1,238)              (664)
                                                  _________          _________
Net funds at 1 October 1999                            979              1,643

Net (debt)/funds at 30 September 2000                 (259)               979
                                                  _________          _________



NOTES TO THE PRELIMINARY STATEMENT
 
                                                      2000               1999
                                                     £'000              £'000
1. Turnover by destination:

United Kingdom                                       6,506              5,620
Rest of Europe                                       6,214              6,298
The Americas                                         6,032              5,383
Rest of the World                                    5,385              5,142
                                                  _________          _________
                                                    24,137             22,443
                                                  _________          _________
2. Taxation:


U.K. current year corporation tax charge               667                718
Transfer to/(from) deferred tax                        118                 (4)
U.K. prior year corporation tax                         (3)                (7)
                                                  _________          _________
                                                       782                707
                                                  _________          _________



3. Dividends:
Interim declared of 2.5p (1999: 2.2p) per share        252                222
Final proposed of 5.3p (1999:4.9p) per share           534                494
                                                  _________          _________
Total for the year                                     786                716
                                                  _________          _________


Subject to approval at the Annual General Meeting on 5 February 2001, the
final dividend for the year ended 30 September 2000 will be payable on 10
April 2001 to those shareholders on the Register at the close of business on 9
March 2001 (ex-dividend date 7 March 2001).

4 (a) Basic Earnings Per Share:
Basic earnings per share for the year ended 30 September 2000 is based on the
weighted average number of ordinary shares in issue in the year of 10,077,749
(1999 and 2000) and earnings of £1,941,000 (1999: £1,864,000), being the
profit on ordinary activities after taxation.

(b) Fully Diluted Earnings per Share:Fully diluted earnings per share for the
year ended 30 September 2000 is based on the weighted average number of
ordinary shares in issue in the year, adjusted for the effect of all dilutive
potential ordinary shares of 10,140,429 (1999: 10,120,885) and the same
earnings as above.

BACKGROUND NOTE

Price:154p (8 December)        
No. of Shares in issue: 10,077,749               
Market Cap: £15.5m

The business
Treatt is a supplier of ingredients to the flavour and fragrance industry. 
These ingredients are included by Treatt's customers as part of a flavour or
fragrance which may then be manufactured from a concentrated mixture of
hundreds of different ingredients.

The ingredients Treatt supply are mainly based on essential oils which are
distilled or blended.  There is an infinite number of potential variations of
each of these as a result of different origins and production techniques. 
Aromatic chemicals, and a range of TreattaromeTM natural distillates
manufactured from the named food, are also supplied.  Typical products
including a Treatt ingredient could range from air fresheners, cosmetics,
shampoos and soaps to soft drinks, confectionery and basic pharmaceutical
products.  Treatt is a world leader in the supply of essential oils for these
uses.  Customers range from small companies to large multinationals, including
flavour and fragrance creators as well as consumer products manufacturers.

There are hundreds of different essential oils extracted from many different
botanical materials.  Some examples of common oils are peppermint, lime,
lavender, orange and eucalyptus.  Essential oils have been used as flavour and
fragrance ingredients for centuries and their use for this purpose far
outweighs other uses such as aromatherapy.  

The vast majority of turnover from the Group's U.K. subsidiary R.C. Treatt
consists of export sales.  The Florida Treatt subsidiary sells primarily into
the U.S. market.



Strengths
* Industry-leading new product development and service is maintained through
the company's on-going investment in R&D.
* Treatt is able to source rare and exotic essential oils from around the
world and export flavour and fragrance ingredients to over 80 countries.
* The finest quality raw materials are obtained and the highest standards of
production are maintained through direct working relationships with growers
and producers.
* Customers demands, large and small, can be met at extremely short notice
through Treatt's extensive stockholding of flavour and fragrance raw
materials.
* Consistent product quality, regardless of variations resulting from source,
climate or production technique, is ensured through Treatt's expertise in
blending and distilling essential oils.

Key financial highlights (year end = 30 September)

                          2000       1999       1998       1997       1996    
Pre tax profit (£m)       2.72       2.57       2.17       1.56       1.46    
Turnover (£m)             24.1       22.4       22.1       22.6       29.4    
EPS (p)                   19.3       18.5       15.6       10.5       10.7