Sweeteners firm Tate and Lyle returned full year profit numbers in line with expectations as it saw steady top-line growth across a number of its markets.
Adjusted profit before tax in the year ended March 31st was £323m, up 23% (26% on a constant currency basis) from £263m the year before. That was adjacent to the £323.6m expected by the market. Reported profit before tax was £379m, up from £245m the year before.
Sales crested the £3bn mark at £3,088m, up 14% (16% on a constant currency basis) on the previous year's figure of £2,720m. The market had pencilled in a figure of £3,001m for sales.
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In Speciality Food Ingredients, sales increased by 10% (12% in constant currency) to £887m (2011 - £805m) with sales volumes up by 4%. Within Bulk Ingredients, sales increased by 15% (18% in constant currency) to £2,201m (2011 - £1,915m).
In Speciality Food Ingredients, adjusted operating profit increased by 4% (5% in constant currency) to £214m (2011 - £206m) with good sales growth partly offset by higher input costs.
In Bulk Ingredients, adjusted operating profit increased by 10% (13% in constant currency) to £172m (2011 - £157m), driven by an improved performance from industrial starches in Europe and exceptionally strong returns from co-products,
Adjusted diluted earnings per share rose 23% to 56.4p from 45.7p the year before, beating market forecasts of 55.24p.
Net debt at the end of the reporting period had grown to £476m from £464m a year earlier. The company said the reason for the increase was higher levels of working capital in the business, investment in its business transformation programme and the restart of its previously mothballed SPLENDA Sucralose facility in McIntosh, Alabama.
Looking ahead, the group expects the Speciality Food Ingredients division to achieve good sales growth, although operating margins in this division are expected to be slightly lower reflecting the additional fixed costs associated with the restart of McIntosh and its share of the investment in the business transformation programme.
In Bulk Ingredients, management anticipates improved bulk sweetener margins in both Europe and the US to broadly offset its expectation of more normal co-product returns and the impact of softer market conditions in industrial starches in Europe and ethanol in the US.
"Overall, taking into account the current level of economic uncertainty and despite a step change in fixed costs associated with the investment necessary to transform the business, we expect to make progress during this financial year," the company said.
The full year dividend has been hiked by 5.1% to 24.9p from 23.7p the year before. This was a little stingier than the market had been expecting, with the consensus forecast being for a full year pay-out of 25p.
JH
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