UK: Tate & Lyle profits hit by exceptional items
- Operating profit down 26%, PBT down 28%
- Adjusted operating profit up 2%
- Sales up 7%
Tate & Lyle adjusted earnings edge up
Tate & Lyle plc has booked a drop in half-year profits, which were dented by one-off charges and investments.
The company today (8 November) revealed operating profit fell 26% to GBP187m (US$299.9m) and profit before tax slipped 28% to GP172m in the first six months of the year. The bottom line was dented in particular by an exceptional charge of GBP2m, compared to a GBP66m exceptional gain last year.
Adjusted operating profit, which strips out the impact of this and other charges, rose 2% in the period to GBP195m.
Sales were up 7%, climbing to GBP1.63bn.
CEO Javed Ahmed emphasised that the company made "solid" progress against a number of headwinds: "Tate & Lyle made progress in the first six months against the backdrop of a strong first half last year, softer market conditions in Europe and the step change in fixed costs associated with the restart of our Splenda Sucralose facility in McIntosh, Alabama and business transformation initiatives."
TATE & LYLE PLC
STATEMENT OF HALF YEAR RESULTS
For the six months to 30 September 2012
|Six months to|
|30 September (Unaudited)|
|% change in|
|£m unless stated otherwise||
|Sales||1 631||1 540||+ 7%|
|Adjusted operating profit2||195||194||+ 2%|
|Adjusted profit before tax3||179||177||+ 2%|
|Adjusted diluted earnings per share3||30.7p||30.7p||+ 1%|
|Operating profit||187||255||- 26%|
|Profit before tax||172||241||- 28%|
|Profit for the period (on total operations)||167||177||- 5%|
|Diluted earnings per share (on total operations)||35.1p||37.0p||- 4%|
|Dividend per share||7.4p||7.1p||+ 4.2%|
Javed Ahmed, Chief Executive, said:
"Tate & Lyle made progress in the first six months against the backdrop of a strong first half last year, softer market conditions in Europe and the step change in fixed costs associated with the restart of our SPLENDA® Sucralose facility in McIntosh, Alabama and business transformation initiatives. Despite facing a number of headwinds this year, I am pleased that the business continues to perform solidly."
Speciality Food Ingredients sales up 5% (6% in constant currency) with adjusted operating profit 7% lower than the strong first half last year after absorbing the step change in fixed costs and a softer first quarter
Bulk Ingredients adjusted operating profit up 6% (7% in constant currency) with strong performance from sweeteners more than offsetting more normal co-product returns following £19 million of additional income in the comparative period
Business transformation programme continues with encouraging initial customer response to our new global Commercial and Food Innovation Centre in Chicago and the launch of our new venture fund
4.2% increase in interim dividend to 7.4p (2011 - 7.1p)
In Speciality Food Ingredients, while we expect continued challenging market conditions in Europe, overall we expect to achieve steady volume growth and solid sales growth for the full year.
In Bulk Ingredients, we expect the firm demand for liquid sweeteners in the US to continue and demand in our other food markets to remain stable. In Europe, higher corn prices are expected to reduce isoglucose margins in the second half. Market conditions in US ethanol are expected to remain challenging.
As usual, the outcome of the 2013 calendar year sweetener pricing rounds will influence performance in the final quarter of the financial year.
Overall, while recognising the current level of uncertainty around the wider economy and corn quality and pricing, we continue to expect to make progress this financial year.
Original source: Tate & Lyle
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