Tate & Lyle: On track to deliver full-year profits, sale volumes pick up

08 Feb 2018 --- Tate & Lyle has said it remains on track to deliver full-year profit growth in line with guidance after sales volumes picked up the pace in the final three month period of last year. The food ingredients maker said decisions taken to invest in the longer term development of its specialty ingredient business in the first half of the year ending March 2018 would moderate profit growth in the second half.

In recent years, Tate & Lyle has focused more on specialty food ingredients such as sweeteners and texturants, which carry higher margins than its much larger and more commoditized business of bulk ingredients.

The company said sales volume growth accelerated in both its specialty food ingredients and bulk ingredients divisions in the final three-month period of last year.

The company also noted that sweetener volume in North America grew in the three-month period and profit growth is expected to be “robust” for the full-year.

Tate & Lyle added that its SPLENDA Sucralose business performed as anticipated with profit in line with the comparative period.

The group highlighted that the 2018 calendar year bulk sweetener pricing round is now substantially complete with margins broadly in line with the previous year.

Tate & Lyle shares have come under major pressure amid the uncertainty over the future trading relationship between the United States and Mexico, which could impact the company's sales to Mexican soda makers, according to Reuters.

In a trading statement this morning for the three months ended December 31, 2017, the Group reported that it saw volume momentum in its Speciality Food Ingredients and Bulk Ingredients divisions and remains on track to deliver progress in adjusted profit before tax in constant currency for the year ending 31 March 2018, in line with guidance.

In Speciality Food Ingredients, the core business delivered good volume growth, including a continuation of modest volume growth in North America. In Food Systems, profit improved although volume was lower. SPLENDA Sucralose performed as anticipated with profit in line with the comparative period. In the division overall, decisions taken in the first half, particularly to invest behind the longer term development of the business, will moderate profit growth in the second half.

In Bulk Ingredients, sweetener volume in North America grew and profit growth is currently expected to be robust for the financial year ending 31 March 2018. The 2018 calendar year bulk sweetener pricing round is now substantially complete with margins broadly in line with the previous year.