Treatt PLC Update on Site Relocation (5122M)
17 Septiembre 2019 - 1:00AM
UK Regulatory
TIDMTET
RNS Number : 5122M
Treatt PLC
17 September 2019
17 September 2019
TREATT PLC
Update on Site Relocation
Treatt Plc (the 'Group' or 'Company'), the manufacturer and
supplier of innovative ingredient solutions for the flavour,
fragrance, beverage and consumer products industries, announces
that it has entered into a construction agreement with Readie
Construction Limited for the development of its new head office
facility on Suffolk Park, Bury St Edmunds (the 'Contract').
Construction is due to commence this month with completion
scheduled for Summer 2020; occupation will take place shortly
thereafter.
The Contract is on a fixed price basis and comprises the design
and build of works associated with the new building including
laboratories, manufacturing and warehouse facilities, offices and
collaborative working spaces. Contract negotiations with other
suppliers for the provision of plant and machinery for the new site
are also proceeding well.
The development of the detailed relocation plan, with the
deliverables of driving further innovation, product development,
teamwork and process efficiencies as well as a step-change in
capacity, is now almost complete. The latest estimate for the
relocation budget and expenditure to date are set out in the table
below.
A further update on the relocation project will be provided when
the Group announces its full year results for the year ending 30
September 2019 on 26 November 2019.
Daemmon Reeve, CEO of Treatt, commented:
"We are extremely pleased to have entered into a contract with
Readie Construction Limited to build our new head office facility.
This marks a significant step in Treatt's history and will provide
our teams with the facilities and positive working environment to
underpin our ambitious future growth plans."
The Company's estimate of overall project costs are estimated as
follows:
Spend to date
Total spend
Capital Expenditure: Budget To 30/9/18 To 31/8/19* to date
GBP'000 GBP'000 GBP'000 GBP'000
Land 3,823 3,823 0 3,823
Buildings 17,483 198 609 807
Plant & machinery 16,891 126 1,093 1,219
Existing site disposal (4,965) 0 0 0
Net capital expenditure 33,232 4,147 1,702 5,849
Note Procurement, installation
1 & commissioning 2,855 335 205 540
Net Relocation Costs 36,087 4,482 1,907 6,388
----------- ------------
Other exceptional items:
Note
2 Accelerated depreciation (non-cash) 434 217 199 416
Note
3 One-off relocation costs 2,052 554 225 778
2,486 771 424 1,194
----------- ------------
* Extracted from unaudited management accounts.
Note 1: Management's view is that these costs do not fall to be
capitalised and will be expensed as exceptional items with the
remaining costs expected to be incurred in the year ending 30
September 2020.
Note 2: Accelerated depreciation relates to the reduction in the
estimated useful lives of assets which will not transition to the
new site and has been accounted for in the current year ending 30
September 2019 and the prior year ended 30 September 2018.
Note 3: Other exceptional items include initial design costs,
duplicated costs of working, additional staffing resources and
costs associated with the physical transfer of the business to the
new site. The remaining costs are expected to be incurred in the
years ending 30 September 2020, 2021 and 2022.
In accordance with IAS 23 'Borrowing costs' and in addition to
the above, the interest charges incurred on funds utilised on the
relocation project prior to its completion, expected to total
GBP0.6m, fall to be capitalised in the year ending 30 September
2020 rather than expensed.
Enquiries:
Treatt plc +44 (0)1284 702500
Daemmon Reeve Chief Executive Officer
Richard Hope Chief Financial Officer
Brokers
Investec Bank Plc
Patrick Robb +44 (0)20 7597 5970
David Anderson
Alex Wright
Public relations
DRD Partnership
Lawrence Dore +44 (0)20 3865 5971
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END
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