UK ingredients group Tate and Lyle reaffirmed its full-year outlook despite booking a 6% drop in profit before tax due to an increase in expenses.
The company said today (7 November) that PBT dropped to GBP158m (US$253.1m) in the six months to 30 September, down from GBP186m last year. Adjusted pre-tax profit dropped 3% to GBP173m and operating profit fell to GBP176m, down from GBP126m.
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The company said it was hit by an increase in expenses and weaker sweetener sales into the US beverages market.
Commenting on the result, CEO Javed Ahmed said the group result was “held back” by a soft beverage season in the US. However, he added that the business “performed solidly” in the half, with good sales growth in speciality food ingredients.
Speciality food ingredients sales increased to GBP112m, representing like-for-like growth of 10%.
“We continue to be pleased with the progress we are making in delivering our long-term strategy,” Ahmed said. “As well as broadening the geographic mix of the business, we are increasingly leveraging the investments we have made to strengthen our global innovation capabilities and to collaborate more closely with our customers.”
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By GlobalDataThe company reaffirmed its expectations for “another year of profitable growth”.
“We read the H1 as reassuringly in line with expectations,” Investec analyst Martin Deboo said. “The corresponding challenge is whether Tate can reverse a 6% decline in profits in H1 into the 13% increase in H2 implied by our numbers. We think they can.”
Tate & Lyle shares edged up 1.07%, rising to 802 pence at 14.25 (GMT).
