Thursday preview: Tate & Lyle outlook bright ahead of trading update

Tate & Lyle will update the market on its latest trading results on Thursday.

The food and sweetener products group last month reported a fall in third-quarter profits as it battled against high corn prices.

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.

Try 6 free issues of MoneyWeek today

Get unparalleled financial insight, analysis and expert opinion you can profit from.

Start your trial

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

Analysts at Investec have painted a brighter future for the group, as it upgraded its forecasts and increased its target price to 860p.

"While the pressures are increasing, these feel like medium-term risks and, in the meantime, Tate should be the beneficiary of post-event forex upgrades, which we reflect in our forecasts and target this morning," the broker said Wednesday.

"Elsewhere we expect US corn refining economics to have been solid in the first quarter of the new contract year."

Investec also expects the group to benefit from a partnership with Coca-Cola which rolls out Classic Sprite with Tate & Lyle's stevia sweetener across Europe.

However, the broker retained its 'hold' rating as it cautioned that competition was hotting up with the emergence of a 'mid cal' segment in soft drinks, sponsored by Coca-Cola and Pepsi.

A day ahead of the company's trading update Tate a& Lyle revealed a partnership with digital agency Maynard Malone to design and develop a new website, coinciding with the launch of its new Taste Experience range of sugars.

Thursday March 28th

INTERIMS

Earthport, James Halstead

INTERIM DIVIDEND PAYMENT DATE

BHP Billiton, Clinigen Group, Downing Absolute Income VCT 2, Downing Distribution VCT 1, Downing Income VCT 3, Downing Income VCT 3 E Shs, Hargreaves Services, Jupiter Primadona Growth Trust, Ruffer Investment Company Ltd Red PTG Pref Shares

QUARTERLY PAYMENT DATE

Anglogold Ashanti Ltd., BP, MedicX Fund Ltd., Premier Energy & Water Trust, Royal Dutch Shell 'A', Royal Dutch Shell 'B'

INTERNATIONAL ECONOMIC ANNOUNCEMENTS

Balance of Payments (GER) (07:00)

Bloomberg Consumer Confidence (US) (12:45)

Chicago PMI (US) (12:45)

Continuing Claims (US) (12:30)

GDP (Final) (US) (12:30)

Initial Jobless Claims (US) (12:30)

International Reserves (EU) (11:00)

M3 Money Supply (EU) (09:00)

PMI Retail (EU) (09:00)

PMI Retail (GER) (08:55)

Retail Sales (GER) (07:00)

Unemployment Rate (GER) (08:55)

GMS

Ceres Power Holdings, Zhaikmunai LP GDR (Reg S)

FINALS

Bilfinger Berger Global Infrastructure Sicav S.A.(DI), Chesnara, Hilton Food Group, Inditherm, Public Power GDR SA (Reg S), RCG Holdings Ltd, Signet Jewelers Ltd., Trap Oil Group

ANNUAL REPORT

Macfarlane Group, National Express Group, New Europe Property Investments

SPECIAL DIVIDEND PAYMENT DATE

Ferrexpo, Octopus Titan VCT 1, Octopus Titan VCT 2, Octopus Titan VCT 3

EGMS

Exillon Energy, Hiscox Ltd., Treatt

AGMS

Helius Energy, Independent Inv Trust, IRF European Finance Investments Ltd (DI), Lecico Egypt SAE GDR (Reg S), Pursuit Dynamics

UK ECONOMIC ANNOUNCEMENT

GfK Consumer confidence (00:01)

Nationwide house price index (07:00)

Index of Services, January (09:30)

TRADING ANNOUNCEMENTS

Electrocomponents, Tate & Lyle

FINAL DIVIDEND PAYMENT DATE

Hazel Renewable Energy VCT 1, Hazel Renewable Energy VCT 2, Henderson Opportunities Trust, SVM Global Fund, SWP Group, Temple Bar Inv Trust