The ingredients group grew underlying operating profits to £358m (a 4% rise) in the year to end March - marginally ahead of analyst expectations – thanks to solid performances by its Speciality and Bulk Ingredients business arms.
"Despite having entered the year facing a number of headwinds we have made progress," said Tate & Lyle chief executive Javed Ahmed.
“Three years ago we set out to build a high quality business, one capable of generating sustained growth over the long term,” he noted. “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.”
"Looking ahead, we will continue to build on the foundations we have laid and expect to deliver another year of profitable growth," said Ahmed.
Speciality Ingredients
In its end of statement, Tate & Lyle revealed a 7% growth in sales for its speciality food ingredients (SFI) business – adding that trends to more healthy-lifestyle products and urbanisation in emerging markets had driven demand for convenience foods containing its stabilising and preservative products.
However, the firm said operating profit for its SFI business had remained broadly in line with last year at £213 million (down by from £214 million in 2012)
Bulk success
Despite the continuing price volatility of corn, Tate & Lyle reported a 6% jump in operating profits (up to £182 million) for its Bulk Ingredients business – with the firm noting that improved bulk sweetener unit margins in the US are expected to offset a softer start in US bulk sweetener volumes and lower isoglucose margins in Europe.
“A good underlying performance from sweeteners in both the US and Europe is expected to more than offset the impact of the costs associated with handling higher levels of aflatoxin following the severe drought in the US in 2012 and continued challenging market conditions in US ethanol,” said Tate & Lyle in an investor statement.