UK: Tate & Lyle soured by sweetener sales
Shares in UK sugar manufacturer Tate & Lyle tumbled by more than 15% this morning (23 January) following modest sweetener sales for the year so far.
Tate & Lyle said it expects sales and profits of its Splenda Sucralose to 31 March 2007 will only modestly exceed the prior year, due to "a slower than anticipated acceleration of uptake from major customers".
The company added that although the sucralose product has seen good demand from the food and still beverage sectors, volumes to the US carbonated soft drink sector have not met expectations this year.
Tate & Lyle's overall trading for the nine months to 31 December 2006 exceeded the corresponding period of the prior year, with a strong performance from both commodity and core value added products.
Its Food & Industrial Ingredients, Americas division continued to perform strongly, while Sugars, Europe has been negatively impacted by the oversupply of sugar in the market.
"The lower than expected contribution from SPLENDA® Sucralose means that in the year to 31 March 2007 the growth of value added profits will be significantly below the group's target of 30%," the company said.
At 11.00 GMT, the company's shares were down 16.5% to 603.00 pence on the London Stock Exchange.
just-food reported on Friday (19 January) that shares in Tate & Lyle were up 4% as the sugar and sweetener company was speculated to be an acquisition target for an unnamed private equity firm.
Tate & Lyle also announced this morning that its CEO Iain Ferguson has today purchased 16,428 ordinary company shares at 608.75 pence per share, and that Stanley Musesengwa, its chief operating officer, purchased 16,428 ordinary shares at 608.75 pence per share.
Companies: Tate & Lyle plc
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