Tate & Lyle sweetened by speciality ingredients gain

Tate & Lyle dished out a tasty set of full-year results, sweetened by strong growth at its core speciality ingredients arm.

Tate & Lyle dished out a tasty set of full-year results, sweetened by strong growth at its core speciality ingredients arm.

Although statutory profits fell, the group grew underlying operating profits 4.0%, marginally ahead of analyst expectations, to £358m in the year to end March.

Speciality food ingredients grew sales 7.0% on the back of trends to more healthy-lifestyle products and urbanisation in emerging markets driving demand for convenience foods containing its stabilising and preservative products.

Chief Executive Javed Ahmed said the underlying business had made progress performed despite facing a number of headwinds.

Group sales rose 6.0% to £3.26bn but margins were squeezed 1.6 percentage points at 22.5% by a step-change in fixed costs due to the resumption of its Splenda Sucralose facility in Alabama, business transformation initiatives, lower sucralose volumes and higher corn input costs.

Tate & Lyle's transformation programme included the opening of the £33m Commercial and Food Innovation Centre in Chicago, which has led to a "step change in the level of customer engagement" as clients visit state-of-the-art laboratories, a demonstration kitchen, sensory testing, analytical facilities and a pilot plant.

Moreover, the group's research and development arm helped launch six "promising" new products, including a stevia-based, natural no-calorie sweetener Tasteva and a salt reduction product, Soda-Lo Salt Microspheres.

T&L also launched a new £30m venture capital fund in January 2013 to back start-up and growing companies working in food sciences and enabling technologies in both developed and emerging markets.

Free cash flow increased from £79m to £110m, after the company lifted the total dividend 5.2% to 26.2p a share.

On the outlook for the current year, Ahmed said: "we will continue to build on the foundations we have laid and expect to deliver another year of profitable growth."

He added: "Three years ago we set out to build a high quality business, one capable of generating sustained growth over the long term.

"We are on track to deliver this but we are not there yet. While we have more work to do, I believe we now have a solid foundation from which we can build."

OH

Recommended

The MoneyWeek Podcast: picking stocks is fun, but you need to do your homework
Investment strategy

The MoneyWeek Podcast: picking stocks is fun, but you need to do your homework

John Stepek talks to Steve Clapham, investor, analyst and author of The Smart Money Method, about the dangers in picking individual stocks and why you…
8 Apr 2021
BP looks set to return more money to shareholders as it beats expectations
Energy stocks

BP looks set to return more money to shareholders as it beats expectations

Oil major BP is to embark on a share buyback programme after significantly reducing its debts. Saloni Sardana looks at what it means for your portfoli…
6 Apr 2021
Deliveroo has hit the market – but it’s not getting the warmest welcome
UK stockmarkets

Deliveroo has hit the market – but it’s not getting the warmest welcome

Food delivery company Deliveroo made its debut on the stockmarket this morning. But with the share price sliding by 30% straight away, it’s not made t…
31 Mar 2021
Three stocks to buy now that will come back stronger after Covid-19
Share tips

Three stocks to buy now that will come back stronger after Covid-19

Professional investor Ed Wielechowski of Odyssean Capital, chooses three compelling stocks that should thrive in a post-pandemic world.
29 Mar 2021

Most Popular

The bitcoin bubble will burst: here’s how to play it
Bitcoin

The bitcoin bubble will burst: here’s how to play it

The cryptocurrency’s price has soared far beyond its fundamentals, says Matthew Partridge. Here, he looks at how to short bitcoin.
12 Apr 2021
Central banks are rushing to build digital currencies. What are they, and what do they mean for you?
Bitcoin

Central banks are rushing to build digital currencies. What are they, and what do they mean for you?

As bitcoin continues to soar in value, many of the world’s central banks are looking to emulate it by issuing their own digital currencies. But centra…
8 Apr 2021
House prices: from boom to even bigger boom
House prices

House prices: from boom to even bigger boom

UK house prices have risen to new to record highs, says Nicole Garcia Merida. Demand continues to outpace supply, but continued low interest rates, th…
9 Apr 2021