Tate & Lyle delivered an encouraging performance during the first half with solid demand in a number of our markets. In Speciality Food Ingredients, we delivered good profit growth driven by increased sales volumes across the product portfolio and stable operating margins. Within Bulk Ingredients, we experienced firm demand for corn sugars in the US and Mexico and improved industrial starch margins particularly in Europe. During the first half we experienced exceptionally strong co-product returns as a result of tight market conditions. The dividend is up to 7.1p
Highlights
- Sales in Speciality Food Ingredients up 9% (12% in constant currency)
- Adjusted operating profit up 14% at £194 million (19% in constant currency)
- Adjusted diluted earnings per share up 34% at 31.5p (41% in constant currency)
- Focus, Fix, Grow programme:
- New Commercial and Food Innovation Centre in Chicago to open in first quarter of 2012
- Global Shared Service Centre in Lodz, Poland now operational
- Common global IS/IT platform into build phase
- SPLENDA® Sucralose volumes particularly strong, up 17%; McIntosh facility on track to restart production in first half of next financial year
Outlook
Within Speciality Food Ingredients, we expect to deliver good profit growth for the full year driven by higher volumes and sales growth across all product categories. Profits are expected to be weighted towards the first half as a result of SPLENDA® Sucralose volumes reverting to more normal levels and the costs associated with restarting the McIntosh facility in the second half.
In Bulk Ingredients, we expect the firm demand for corn sugars in the US and Mexico to continue, subject to normal seasonal patterns, and stable demand in our other food markets. Industrial starch, particularly in Europe, is expected to perform better than the prior year. As usual, the outcome of the 2012 calendar year sweetener pricing rounds will influence performance in the final quarter of the financial year.
Profits for the Group for the full year are expected to be more heavily weighted towards the first half than usual, mainly due to the exceptionally strong performance from co-products during the first half.
