SWEETENER and starches maker Tate & Lyle said it expects annual profit to rise, after building on an encouraging start to the year over the summer.
Chief executive Javed Ahmed said he expects “progress” in full-year pre-tax and operating profits, driven by growth in the speciality sweeteners and starches business including its sucralose sweetener Splenda.
These businesses, estimated to make 55 per cent of group profit, were balanced by a more mixed picture in its bulk ingredient business where corn sweeteners saw good demand but industrial starches and ethanol had more difficult trading.
“The encouraging start to the year has continued in the second quarter, particularly within Speciality Food Ingredients, with good operating performance and solid demand in a number of our markets,” Ahmed said.
Ahmed, who took over in October 2009, has promised to focus on the group’s fast-growing speciality sweeteners and starches at the expense of its sugar and bulk commodity ingredients.
As part of this strategy, the group agreed to sell its European sugar operations in July to privately owned American Sugar Refining for £211m, breaking a 150-year link to sugar, and hopes to sell its remaining sugar business in Vietnam and molasses unit in Britain by end-2010.
Analysts have said an eventual sale of its bulk ingredients business is possible.
Polly Barclay at broker JP Morgan Cazenove said: “This positive update but cautious outlook is in line with expectations given Tate is up an absolute 15 per cent in the month of September.”
City A.M. Reporter