Tate & Lyle Plc (TATE.L,TATYY.PK), a maker of sweeteners and starches, Thursday reported lower profit for the year, as the prior year benefited from an exceptional credit. Adjusted earnings increased and the firm raised its dividend.
Javed Ahmed, chief executive, said, "I am pleased to report that the underlying business continues to perform well and that despite having entered the year facing a number of headwinds we have made progress.''
Profit before tax decreased to 309 million pounds from 379 million pounds. The results are on the basis of continuing operations.
Exceptional items generated a net loss of 12 million pounds. In the prior year, exceptional items resulted in a gain of 68 million pounds, largely related to restarting production at Splenda Sucralose facility in McIntosh, Alabama.
Adjusted pre-tax profit was 329 million pounds while it totaled 318 million pounds last year.
Profit attributable to owners of the company fell to 277 million pounds from 305 million pounds in the previous year. Earnings per share dropped to 58.5 pence from 64.3 pence.
Sales increased 5 percent to 3.256 billion pounds from 3.088 billion pounds. The growth was 6 percent on a currency-neutral basis.
In the Speciality Food Ingredients business, sales grew 7 percent to 947 million pounds and volumes grew 4 percent. The segment comprises of starch-based speciality ingredients, high intensity sweeteners and food systems.
In starch-based speciality ingredients, sales increased 13 percent amid rising demand for convenience foods in Asia where value-added starches are used to add mouth-feel and extend shelf-life.
Within high-intensity sweeteners, comprising Splenda Sucralose and no-calorie, natural sweeteners Purefruit Monk Fruit Extract and Tasteva Stevia Sweetener, sales were in line with last year with volume dip of 1 percent.
Sales advanced 5 percent in Bulk Ingredients to 2.309 billion pounds, while volumes decreased 2 percent as the company continued its strategy of diverting grind to produce speciality food ingredients.
Looking ahead, the company expects to deliver another year of profitable growth. In Speciality Food Ingredients, the firm sees good sales and profit growth with volume growth across all major product categories.
In Bulk Ingredients, improved bulk sweetener unit margins in the U.S. are expected to offset a softer start in US bulk sweetener volumes and lower isoglucose margins in Europe, amid continued corn price volatility. Profits within Bulk Ingredients are expected to be more evenly distributed between the first and second half than in the prior year.
Further, the Board recommended a 5.6 percent increase in final dividend to 18.8 pence from 17.8 pence. This makes a full year dividend of 26.2 pence per share, up 5.2 percent on the prior year.
TATE.L is up 0.2 percent in early morning trade at 850.50 pence.
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