Sweeter outlook despite drop in Tate & Lyle sales

TATE & Lyle is betting on its higher-margin speciality sweetener business to help to support profitable growth for the full year after yesterday reporting a fall in first-half profits.

The company, which sells sweeteners including corn syrup to food and soft drink makers, had warned last month that a cold spring in the US had hurt sales.

Tate reiterated that it expects to deliver profitable growth for the full-year to 31 March driven by higher sales and profit in its speciality food ingredient business, which includes zero-calorie sweeteners like Splenda.

The speciality business accounts for about 30 per cent of the group’s total sales and its products include high-intensity sweeteners, modified starches and oat proteins. Tate’s much-larger bulk ingredients business sells high-fructose corn syrup, industrial starches and ethanol.

The second-half performance in the bulk ingredients business should be better than in the year-ago period, Tate said.

Tate & Lyle’s adjusted earnings from continuing operations fell two per cent to 29.9p per share for the six months to 30 September. Analysts on average were expecting 29p, according to a company-provided consensus.

Sales rose seven per cent to £1.74bn.

The company said it was too early to judge the impact of a new tax on soft drinks in Mexico, passed by the country’s Congress last month to try to tackle obesity levels.

Tate said it was too early to know whether the tax would be fully passed on to consumers and if so, how they would react.