Treatt

Treatt Dividend Analysis and Summary

• Final dividend: 3.00p per share (FY24: 5.81p; down 48.4%).
• Total FY25 dividend: 5.60p per share (FY24: 8.41p; down 33.4%).
• Ex-dividend date: 02/04/2026 (derived from the stated record date; UK market holidays on 3 and 6 April shift ex-div to 2 April).
• Record date: 07/04/2026.
• Payment date: 13/05/2026, subject to approval at the AGM on 26/03/2026.
• Dividend cover: c.1.5x on statutory EPS (8.38p); c.2.4x on pre-exceptional basis (adjusted EPS 13.40p).
• Policy: Progressive; Board aims to grow cover back to around 3x as profits recover.

• Coverage and earnings: The cut to 5.60p resets payout to a more defensible level at 1.5x cover after a sharp EPS fall (-63%). On an adjusted basis cover improves to ~2.4x, but still below the longer-term 3x target.
• Cash generation: Operating cash flow of £11.3m covered FY25 dividends (£5.1m) and most capex (£5.2m), indicating the proposed dividend is cash-supported, albeit with limited headroom.
• Balance sheet/leverage: Net debt rose to £5.9m (from £0.7m), largely due to the £5.0m buyback, but leverage remains modest (net debt/adj. EBITDA ~0.36x) with strong interest cover (pre-exceptional ~30x), supporting dividend capacity.
• Profit trajectory: Revenue (-11.8%) and margin pressure (gross margin -340bps) drove PBT declines; management is focused on cost control and pipeline conversion. Near-term dividend growth likely to be cautious until profitability and margins recover.
• Capital allocation: Buyback completed in FY25; focus now on cash generation, disciplined capex, and working capital. The pension buy-in reduces long-term funding risk, marginally improving future dividend resilience.