Tate + Lyle: Announces Full Year Results

London / UK. (tl) Tate + Lyle PLC, a leading global provider of speciality food ingredients and solutions, announced its results for the full year ended 31 March 2014. Chief Executive Javed Ahmed: «During the year, we continued to make steady progress in executing our strategy. The delivery of solid profit growth in starch-based speciality ingredients and Food Systems, along with another year of strong growth in emerging markets, was offset by the impact of the cold spring in the US last year followed by the recent severe and prolonged winter, and an increasingly competitive market for «Splenda» Sucralose. While we will continue to face sucralose pricing headwinds in the current year, our strong innovation pipeline, robust balance sheet and continued growth in emerging markets means we are well placed to deliver growth over the longer term». Highlights:

  • Speciality Food Ingredients sales up four percent (also in constant currency) at 983 million GBP with adjusted operating profit in line with the prior year (up one percent in constant currency) at 213 million GBP:
    • Continued strong growth in Asia and Latin America
    • Acquisition of Biovelop, and in China, the formation of Tate + Lyle Howbetter and agreement to acquire Winway Biotechnology
  • Bulk Ingredients adjusted operating profit five percent lower (four percent lower in constant currency) at 172 million GBP due to soft beverage season and unusually cold and prolonged winter in the US
  • Adjusted profit before tax two percent lower (flat in constant currency) at 322 million GBP
  • Balance sheet remains strong with reduction in net debt of 126 million GBP to 353 million GBP (2013: 479 million GBP)
  • Final dividend of 19,8 GBPence proposed making a total dividend of 27,6 GBPence (2013: 26,2 GBPence) up 5,3 percent on prior year
  • Successful deployment of upgraded IS/IT platform across Europe with US and Singapore on track for the summer
  • Board approval of capital investment of 100 million GBP over the next two years in Speciality Food Ingredients to expand capacity for existing and pipeline products

Outlook: In Speciality Food Ingredients, we expect to deliver volume growth across all major product categories but a lower profit contribution from «Splenda» Sucralose is expected to offset a good performance elsewhere in the division. Profits in this division are expected to be more evenly weighted between the first and second halves than the previous financial year. In Bulk Ingredients, we now anticipate a slower start in the US in our first quarter associated with the prolonged and severe winter, combined with lower European sugar prices in our second half, to outweigh a better performance across other product categories. Overall, and before the impact of currency movements, while we expect the Group´s performance for the full year to be slightly lower than the comparative period, we are well placed to deliver growth in the longer term.

Tate + Lyle: Announces Full-Year Results

London / UK. (tl) «Tate + Lyle PLC performed well with steady growth across a number of our markets supported by exceptionally strong returns from co-products in the first half», said Chief Executive Javed Ahmed in a statement about the full year results for the year ended March 31, 2012. «This was a year of working hard to achieve a number of our business transformation milestones while at the same time delivering profitable growth. During the year we opened our new global Commercial and Food Innovation Centre in Chicago which will help us to transform the way we interact with customers and represents a key component of the foundations for long-term growth. We also restarted production at our «Splenda» Sucralose facility in the US further reinforcing our position as the leading global provider of sucralose. In the current financial year we expect to make further progress as we build upon the investments we have made and continue to take the steps necessary to transform the business», Ahmed said in the company´s statement.

Financial performance

  • Speciality Food Ingredients sales up ten percent at 887 million GBP (twelve percent in constant currency)
  • Adjusted operating profit up eight percent at 348 million GBP (eleven percent in constant currency)
  • Adjusted diluted earnings per share up 23 percent at 56,4 GBPence (25 percent in constant currency)
  • 5,3 percent increase proposed for the final dividend to 17,8 GBPence, making a total dividend of 24,9 GBPence (2011: 23,7 GBPence)

Operational highlights

  • Good progress on our business transformation programme with a number of key milestones achieved:
    • Global Commercial and Food Innovation Centre in Chicago opened in March 2012
    • Global Shared Service Centre in Lódz, Poland now operational
    • Global IS/IT system – now into the test phase with first roll out in summer 2012
  • Restart of production at «Splenda» Sucralose facility in McIntosh, Alabama

Outlook

In Speciality Food Ingredients we expect to achieve good sales growth, although operating margins in this division are expected to be slightly lower reflecting the additional fixed costs associated with the restart of McIntosh and its share of the investment in the business transformation programme. In Bulk Ingredients, we anticipate improved bulk sweetener margins in both Europe and the US to broadly offset our expectation of more normal co-product returns and the impact of softer market conditions in industrial starches in Europe and ethanol in the US. Overall, taking into account the current level of economic uncertainty and despite a step change in fixed costs associated with the investment necessary to transform the business, we expect to make progress during this financial year.