Tate & Lyle to Miss Targets Through Splenda

26/01/07 Tate & Lyle has said that the lower than expected contribution from SPLENDA Sucralose means that in the year to 31 March 2007 the growth of value added profits will be significantly below the Group’s target of 30%. Given this and the impact on overseas earnings of the weakness in the US dollar, Group profit before tax, exceptional items and amortisation for the year to 31 March 2007 is now likely to be modestly below current market expectations, albeit well ahead of the previous year.

In a trading update, the company reported that overall trading for the nine months to 31 December 2006 has continued to comfortably exceed the corresponding period of the prior year, with a strong performance from both commodity and core value added products. However, it is likely that sales and profits of Splenda Sucralose for the year to 31 March 2007 will only modestly exceed the prior year due to a slower than anticipated acceleration of uptake from major customers.

SPLENDA Sucralose has seen good demand from the food and still beverage sectors and international expansion is well underway, now that additional manufacturing capacity is available.  We have an extensive product development pipeline with our customers across several markets, although the process of reformulation is taking longer than expected.  Volumes to the US carbonated soft drink sector have not met our expectations this year and additional resources have been deployed to address this.

As previously stated, Food & Industrial Ingredients, Americas continues to perform strongly. Food & Industrial Ingredients, Europe achieved a satisfactory pricing round for the 2007 calendar year and results for the second half-year are now expected to be similar to the corresponding period of the prior year, albeit after benefiting from a lower depreciation charge. Sugars, Europe will be negatively impacted by the over supply of sugar in the market, a result of the slow surrender of quota to date. Sugars, Americas and Asia continues to trade in line with our expectations, Tate & Lyle said.