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Sales, profits down at Tate & Lyle

Tate & Lyle has reported its results for the financial year. Adjusted sales for the year were £2,694 million (2014 – £3,147 million), 14% lower than the prior year (11% in constant currency), with adjusted sales in Speciality Food Ingredients down 8% (4% in constant currency) to £908 million (2014 – £983 million) and 17% […]

Tate & Lyle has reported its results for the financial year. Adjusted sales for the year were £2,694 million (2014 – £3,147 million), 14% lower than the prior year (11% in constant currency), with adjusted sales in Speciality Food Ingredients down 8% (4% in constant currency) to £908 million (2014 – £983 million) and 17% lower in Bulk Ingredients (14% in constant currency) at £1,786 million (2014 – £2,164 million). Adjusted operating profit was 29% lower (27% in constant currency) at £247 million (2014 – £349 million), with adjusted operating profit in Speciality Food Ingredients down 30% (29% in constant currency) to £149 million (2014 – £213 million), and 23% lower (19% in constant currency) in Bulk Ingredients at £133 million (2014 – £172 million). Adjusted profit before tax was 30% lower (28% in constant currency), at £224 million (2014 – £322 million), and adjusted diluted earnings per share were 32% lower (29% in constant currency) at 37.7p (2014 – 55.7p).

“It has been a very challenging year for the Group, but with the necessary actions underway we are firmly focused on improving our performance and continuing the evolution of Tate & Lyle into a global Speciality Food Ingredients business supported by cash generated from Bulk Ingredients,” said Javed Ahmed, Chief Executive. “The fundamentals of our Speciality Food Ingredients business and demand for our products remain strong. We have a portfolio of products with leading market positions, an expanding global footprint, and a steady flow of new products focused on major consumer trends, particularly in the health and wellness space; our Speciality Food Ingredients business is well-positioned for the future.”

The year ahead will be one of structural change as Tate & Lyle re-aligns the Eaststarch joint venture and SPLENDA Sucralose, embeds changes to improve  global supply chain capabilities, and brings on line additional growth capacity for Speciality Food Ingredients, the company said. It anticipates that, in this year of change, adjusted profit before tax for the year ending 31 March 2016 will be broadly in line with the 2015 financial year on a pro-forma basis assuming the Eaststarch transaction completes in the summer as expected.

The company said that the longer term outlook for the business remains positive. It expects the global market for speciality food ingredients to grow at mid-single digits and said that its objective is to grow modestly ahead of the market via organic growth supplemented by bolt-on acquisitions. As the mix of the Group moves towards its higher margin Speciality Food Ingredients business augmented by operational improvements, Tate & Lyle said that, over time,  it expects to steadily enhance Group profit and returns on capital.