Thursday preview: Tate & Lyle to report annual sales growth

Food and sweetener company Tate & Lyle is expected to deliver solid sales growth in its annual results Thursday.

In a trading update ahead of its results for the year ended March 31st 2013, the company said it has performed strongly driven by its speciality food ingredients (SFI) division.

Jefferies International expects to see continued momentum in SFI, with volume growth up 6.0% in the second half from 4.0% in the first half, boosted by starch-based specialty ingredients.

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"Following Tate & Lyle's reassuring full-year trading update on March 28th, we do not expect significant surprises in the full-year numbers that the company will report on 30 March, 2013," the broker said in a note last week.

Profits of bulk ingredients are expected to rise 3.0% despite a £7.0m hit to full-year profits due to aflatoxin, a poisonous fungus to livestock that thrived in the unusually hot and dry conditions on corn fields last summer.

Concerns over the over the fungus have emerged in the US, where corn farmers have been hit by the worst drought in more than 50 years.

"The market will be looking for an update on co-product income in F-14 and any further impact from aflatoxin," Jefferies added.

The analyst recommended a 'buy' rating for the stocks and a target price of 980p.

Thursday May 30th

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