Tate & Lyle on track despite cold US spring hitting drinks market

 
City A.M. Reporter
TATE & Lyle yesterday said an unusually cold spring in the US had hit first-quarter volumes but did not prompt it to alter full-year profit forecasts.

The sweetener-maker, whose brands include Splenda and Tasteva, said that the expected cold start to the US summer resulted in lower volumes within the beverage sector, which mainly affected bulk ingredients.

Its speciality food ingredients business saw volumes and sales rise faster than the wider market thanks to growth in Europe and emerging markets, which made up for a softer performance in the US, it said.

Overall, adjusted operating profit was in line with its expectations.

Analysts said the company’s comments were reassuring following US-based starches and sweeteners maker Ingredion’s profit warning last week.

“We believe investors will be encouraged to see Tate taking a softer US market in its stride,” Jefferies analysts said.

Tate & Lyle has shifted its focus in recent years, developing the more profitable speciality food ingredients business, including sweeteners and starches, which accounted for almost 30 per cent of sales last year, away from its bulk ingredients operations.