Sweeteners manufacturer Tate & Lyle says it remains on track for a "good performance" in the full-year ending March 31st, in spite of its third quarter statement reporting pretty mixed trading.
In Speciality Food Ingredients, the firm saw steady sales growth but the rate of volume growth was, as expected, lower than that in the first half.
Corn-based speciality sweeteners and starches saw good sales growth on higher volumes, sucralose volumes increased but were below the strong levels of the first half, while Food Systems saw good sales growth with volumes flat on last year.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
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
In its Bulk Ingredients division, North American liquid sweetener volumes benefited from robust levels of domestic and Mexican demand, while in Europe, Tate & Lyle said it was able to increase liquid sweetener margins.
However, the firm did say that while industrial starch margins were ahead of last year, volumes fell due to the softening in demand from European paper and board customers reflecting the "uncertain economic environment". Furthermore, the group said that US ethanol margins began to weaken towards the end of the period on the back of lower prices in anticipation of the expiry of the blenders' tax credit.
"The group has performed well during the first nine months of the financial year. While we recognise the wider uncertainties in the global economy, we remain on track to deliver a good performance for the full financial year," the firm said.
Net debt was flat over the quarter at £410m, but the company said that it expects net debt at the year-end to be higher than the £464m reported last year, as corn prices and exchange rates drive a net cash outflow in the final three months of the year.
BC
