Tate & Lyle battling against high corn prices

Sweeteners and food products group Tate & Lyle said that third-quarter profits, while lower than they were last year, were in line with its expectations.

Sweeteners and food products group Tate & Lyle said that third-quarter profits, while lower than they were last year, were in line with its expectations.

However, the company did warn about the elevated levels of volatile corn prices and the impact of the hot summer last year.

The company said that adjusted profit before tax was down year-on-year in the three months to December 31st due to the step change in fixed costs associated with its "business transformation initiatives", which include the restart of the McIntosh facility and the development of the Commerical and Food Innovation Centre in Chicago.

Advertisement - Article continues below

The press release on Friday said: "The group has made a solid start to the final quarter. Despite facing a number of headwinds and before the impact of exchange rate movements, we expect to make modest progress this financial year."

In Speciality Ingredients, the division which makes sweeteners such as SPLENDA sucralose and dietary fibre product PROMITOR, Tate said that it has achieved good sales growth with volume growth outperforming the wider market. Full-year operating profit in this division is expected to be flat.

The Bulk Ingredients division, which manufacturers products such as high-fructose corn syrup and acidulates, has seen "solid" demand in North America for liquid sweeteners.

Corn prices

The firm said that corn during the third quarter was affected by aflatoxin, a fungus caused by the unusually hot and dry conditions last summer, but it has taken a number of steps to mitigate the impact.

The statement said: "We expect a further small increase in net corn costs in the final quarter of the financial year and estimate the impact of aflatoxin will be to reduce operating profit by around £7.0m for the full year. We will continue to take action to manage the risks posed by aflatoxin during the first half of next financial year up to the new harvest."



Investment strategy

Broker safety – your questions answered

Cris Sholto Heaton answers more of your questions about the safety of stockbroker accounts
25 Mar 2020
Investment strategy

How demographics affects stock valuations

New research suggests that stock and bond valuations are driven by the age of the population – at least in the US.
24 Feb 2020
Stocks and shares

Do you own shares in Sirius Minerals? Here’s what you need to do now

Mining giant Anglo American has proposed a cash takeover of Yorkshire-based minnow Sirius Minerals. Unhappy shareholders must decide whether to accept…
20 Feb 2020

Why investors should be “cautiously bullish” for 2020

Analysts have been out in force making rosy predictions for stockmarkets in 2020, but while there is certainly a case for optimism, investors should r…
17 Jan 2020

Most Popular


The end of the bond bull market and the return of inflation

Central bank stimulus, surging post-lockdown demand and the end of the 40-year bond bull market. It all points to inflation, says John Stepek. Here’s …
30 Jun 2020

This chart pattern could be extraordinarily bullish for gold

The mother of all patterns is developing in the gold charts, says Dominic Frisby. And if everything plays out well, gold could hit a price that invest…
1 Jul 2020
Global Economy

How “pent-up demand” could drive a V-shaped economic recovery

“Pent-up demand” is usually a myth. But not this time. The Covid lockdown has created genuine pent-up demand, says Merryn Somerset Webb. That’s now be…
29 Jun 2020