British ingredients supplier Tate & Lyle raised its full-year profit forecast on Thursday after better than expected results.
It put down part of its soaring profits due to the devaluation of the pound – as it does most of its business in US dollars.
Tate manufactures artificial sweetener, speciality food ingredients and bulk ingredients such as corn syrup. Revenues jumped 13 per cent to £1.32bn, sending pre-tax profits up 37 per cent to £140m.
The groups sales inched up one per cent in the first half of this year, while profits rose 22 per cent.
The exchange rate increased Tate's profits by £15m, and the company now expects a £40m boost for the full year.
Its sweetener, Splenda, also benefited from increased sales and lower manufacturing costs.
There was strong demand for its bulk ingredients, but the US market was "sluggish", the firm said.
Why it's interesting
The exchange rate is going to be a tricky one to measure the impact of over the coming months. From our side of the pond, it doesn't look great.
Thinking of going on holiday soon? You won't be able to get as many euros or dollars for your pound, meaning you will have to shell out a little more on your travels.
But for businesses, it depends where they do most of their trading. If they import a lot, the prices could go up due to the drop in the pound's value.
But if, like Tate, they work mostly in dollars, it can really boost profits.
What the company said
Javed Ahmed, chief executive, said: “We continued to strengthen execution across the business, leading to further improvement in customer service and supply chain performance. We expect adjusted profit before tax in constant currency for the full year to be higher than we anticipated coming into the year driven by the strong first-half performance, with performance in the second half remaining in line with our expectations.”
Brexit won't be bad for some businesses, especially if they mainly trade in dollars…