London / UK. (tl) Tate + Lyle PLC, a leading global provider of speciality food ingredients and solutions, announced its trading statement for the period from 01 April 2015 to 30 June 2015, which is the first quarter of the financial year. The Group’s trading performance in the first quarter was in line with expectations and guidance for the full year remains unchanged.
Speciality Food Ingredients made an encouraging start to the year and performed ahead of the comparative period. «Splenda» Sucralose performed solidly as we continued to pursue volume only where we see value. The consolidation of sucralose manufacturing into our facility in Alabama, USA, is progressing as planned supported by good customer engagement. Volume growth for Food Systems was ahead of the comparative period benefiting from the acquisition, last year, of Gemacom in Brazil. Volume across the balance of the Speciality Food Ingredients business was slightly behind the comparative period, with volume improving as we exited the quarter. We continued to take steps to address the impacts of the supply chain disruption experienced last year and we expect volume growth to strengthen through the remainder of the year as the additional capacity comes on-line in the second half. The volume of new products grew strongly.
Bulk Ingredients, excluding commodities (ethanol and co-products), performed steadily and slightly ahead of the comparative period supported by solid sweetener demand. However, this was more than offset by the impact of commodities, including the continuation of low US ethanol margins. The process of obtaining regulatory approval for the re-alignment of the Eaststarch joint venture in Europe is progressing well and we expect to complete this transaction around the end of the second quarter of the financial year.
Sale of EU Sugars; Update on Litigation
As previously announced and disclosed in our 2015 Annual Report, American Sugar Holdings (ASR) raised a number of claims totalling in the region of 40 million GBP relating to its acquisition of the Group’s EU Sugars business in September 2010. A trial of these proceedings was held in the Commercial Court in London in early May 2015, with the judge’s verdict expected later in the year.
Financial Position and Balance Sheet
Net debt was slightly lower than the position at 31 March 2015 aided by the translation effects of a stronger sterling. Following the quarter end, on 21 July 2015, we priced a 400 million USD debt private placement with notes to be issued maturing in eight, ten and twelve years, extending the average maturity of our debt by approximately two years. The transaction is expected to complete on 29 October 2015.
Overall, before the impact of exchange rate movements and the final timing of the completion of the Eaststarch transaction, expectations for the Group’s full year performance remain unchanged.