Shares in ingredients group Tate & Lyle plc fell today (30 May) after a hike in IT costs overshadowed a set of annual results that beat some City expectations.
Tate & Lyle is investing in its shared services and IT divisions and today said the project would cost GBP70m more than the GBP45-60m it projected.
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The news came as Tate & Lyle reported lower annual profits amid one-off costs related to the programme and to a new innovation centre in the US. However, adjusted pre-tax profits for the year to 31 March rose 4% to GBP329m. Adjusted operating profit was up 3% at GBP358m.
Sales increased 5% to GBP3.26bn, with revenue from speciality ingredients up 7% at GBP947m.
“The underlying business continues to perform well and that despite having entered the year facing a number of headwinds we have made progress,” chief executive Javed Ahmed said. “Looking ahead, we will continue to build on the foundations we have laid and expect to deliver another year of profitable growth.”
Investec analyst Martin Deboo said the results were “modestly ahead of expectations” but said the hike in costs from the IT and shared services project were “material and a concern for us”.
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By GlobalDataShares in Tate & Lyle were down 2.18% at 830.5p at 15:40 BST.
