Tate & Lyle's share price slumped four per cent in early trading after a depressing set of full-year results signalled little turnaround in profits.
The FTSE 250-listed group is predicting profits will stay flat next year. admitting that it had endured "very challenging" last 12 months as it continues to restructure its business.
In the year ended 31 March 2015 the food ingredients company announced falls across the board in sales, profit and earnings.
On a constant currency basis sales fell 11 per cent from £3.1bn to £2.7bn with profit before tax suffering a 28 per cent fall to £224m.
Earnings per share fell 29 per cent to 37.7p - down from 55.7p a year earlier.
Why it's interesting
The company is shifting towards a stronger focus on its speciality food ingredients business. Depressingly for investors, that strategy struggled to reap rewards in the past year with a 29 per cent drop in operating profit to £149m.
While Tate & Lyle reassures shareholders that it is making "solid strategic progress", such progress was held back by supply constraints and price erosion in Splenda sucralose. A factory for the sweetner in Singapore took an extended shutdown following an industrial accident, disrupting the supply chain, contributing towards a 73 per cent drop in profit and forcing it to consolidate production into one facility.
Splenda is situated in an "extremely competitive market", yet despite all these challenges the group is pushing ahead with its plans and expects Splenda to return to profit by the end of next year.
What Tate & Lyle said
It has been a very challenging year for the group, but with the necessary actions underway we are firmly focused on improving our performance and continuing the evolution of Tate & Lyle into a global speciality food ingredients business supported by cash generated from bulk ingredients.
The fundamentals of our speciality food ingredients business and demand for our products remains strong. We have a portfolio of products with leading market positions, an expanding global footprint, and a steady flow of new products focused on major consumer trends, particularly in the health and wellness space; our speciality food ingredients business is well-positioned for the future.
- Chief executive Javed Ahmed
After a year marred by a string of profit warnings, Tate & Lyle has steadied the ship somewhat. But it's still a ship weighed down by unwanted sacks of sugar and sinking profits.