Soaring profits at Splenda maker Tate & Lyle sweeten flat sales growth

 
Francesca Washtell
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Demand Outstrips Supply For Sugar Substitute Splenda
The former sugar maker now manufactures Splenda (Source: Getty)

The Splenda maker posted soaring profits today that sweetened flat sales growth at the former sugar maker.

The figures

Tate & Lyle's unadjusted pre-tax profits rocketed from £25m to £126m, although on an adjusted basis profit before tax came in at £193m, a rise of only five per cent year on year, although in line with expectations.

However, the ingredients maker posted flat sales growth, growing 0.6 per cent in the year ended 31 March, to £2.36bn.

The company's speciality food ingredients segment, which mostly produces sugar substitutes, posted adjusted operating profit of 10 per cent, while new products sales increased by 34 per cent on a constant currency basis.

Earnings per share rose by eight per cent, from 32p last year to 34.5p in 2016.

Tate and Lyle Tate and Lyle | mobile image

Why it's interesting

Tate & Lyle is on the up after spending much of 2016 trying to recover from a collapse in sucralose prices that drove a pre-tax profit drop of more than 80 per cent in 2015.

In February, the company warned its full-year profits would be hit by falls in the value of the Mexican peso and Brazilian real, saying its adjusted pre-tax profit would be "modestly below" the £193m it had expected, which it reached today.

The group has said that further modest exceptional costs "in relation to the completion of the group's restructuring in the 2017 financial year" will now be lower than the level of £185m announced in April 2015.

What Tate and Lyle said

Chief executive Javed Ahmed said:

This has been a year of solid financial performance and strong project delivery. Both business divisions delivered margin expansion and we completed the major structural change initiatives needed to further strengthen the business and drive higher quality earnings.

We also made progress against the 2020 Ambition we outlined in November 2015.

Turning to the outlook for the 2017 financial year, subject to currency movements, we are confident the group will continue to make progress in line with our plan and towards our 2020 Ambition.

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