Too much sweetener turns profits sour for Tate & Lyle

 
Sarah Spickernell
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The company faces stiff competition from China (Source: Getty)
Tate & Lyle has warned investors its full-year profits will be below expectations, after low demand for its sweeteners hurt business in the US during the third quarter.
It said an influx of cheaper products from Chinese manufacturers was leading to an oversupply of its own products, and that the fall in sugar prices in Europe had exacerbated the resulting loss.
Not only that, but a decline in biofuel prices has hindered progress for the company's ethanol business.
“We now expect Group profits for the full financial year to be modestly below the range stated in September 2014 of £230 to £245million,” the company said in a statement. It added that it expects the trend to continue in the fourth quarter.
The outlook is not all bad, however – the UK sugar manufacturer said its speciality food ingredients performed in line with expectations during the three months to 31 December, and that solid growth in Europe and Asia had driven volumes higher than in 2013.
“Customer demand for new products launched from our innovation pipeline remains high, with these new products delivering another quarter of strong volume growth,” the company said.

Shares have had a volatile time over the last 12 months, plunging to a three-year low in September after supply chain issues resulted in a profit warning being issued by the company. Shares have been climbing since then but still remain lower than they were at this point last year.

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