Tate & Lyle Annual Profit Up, Sucralose Sweetener Growth Seen to be Modest
Tate added that the higher costs of production as it ramps up output from its new Singapore sucralose plant and increased patent defence costs will limit profit growth in the current year for the sweetener.
24/05/07 British sugar and sweeteners maker Tate & Lyle reported a 14 percent rise in annual profit on Wednesday, but warned that profit growth this year from its zero-calorie sweetener sucralose will only be modest.
The London-based group posted underlying pretax profit before amortisation and exceptional items of 336 million pounds ($663 million) for the year to end-March, at the top of an analyst forecast range of 322 million to 336 million pounds.
Tate added that the higher costs of production as it ramps up output from its new Singapore sucralose plant and increased patent defence costs will limit profit growth in the current year for the sweetener.
"We expect any growth in operating profits of the division in the year ending 31 March 2008 will be modest and second half year weighted," the group said.
Sucralose accounts for just over a fifth of group profit and a warning of slow growth back in January undermined Tate's shares and brought a promise of a revised strategy.
Tate's shares fell to a low of 525-1/2p in early March on continued worries over sucralose, but then recovered slowly after a reassuring trading update in late March and closed on Tuesday at 645p.
The group posted a 7.5 percent rise in its annual dividend to 21.5 pence a share.
