SHARES in Tate & Lyle plunged to a three-year low yesterday after the food ingredients group warned that supply chain issues in the US and fierce competition in the sweetener market meant full-year profits would be lower than expected.
Tate & Lyle said a “severe winter” in the US had disrupted operations at its corn plants and lowered stock levels. The havoc caused to its supply chain means it expects to book around £40m of costs in the first half of the year and a further £10m in the second half.
The FTSE 100 group, which sells ingredients to packaged food and drinks makers, has also had to renegotiate contracts at lower prices to protect its interests in the face of intense competition in the sucralose market from Chinese rivals.
It warned that prices for sucralose – the main ingredient of its Splenda sweetener – would be around 25 per cent lower this year rather than the 15 per cent decline it forecast in February.
Tate & Lyle now expects profits to be between £230m to £245m for the year to 31 March, around 20 per cent lower than analysts’ forecasts.
“Clearly our performance in the first half has been extremely disappointing,” chief executive Javed Ahmed said yesterday. Shares slumped 16.7 per cent to 610p.