Tate & Lyle upgrades FY profit guidance after strong H1

Tate & Lyle upgraded its guidance on profit for the full year on Thursday following a strong first half, as it posted a 26% jump in pre-tax profit for the six months to 30 September.

Pre-tax profit rose to £161m from £128m in the same period a year ago, on sales of 1.4bn, up 6%. Adjusted pre-tax profit came in at £169m compared with £140m the year before, while adjusted diluted earnings per share came in at 27.6p versus 24.3p. Shore Capital had been expecting adjusted pre-tax profit of £160m.

The company's Speciality Food Ingredients business delivered broad-based volume growth in the core business, including North America, despite challenging market conditions in that region. Meanwhile, New Products once again delivered double-digit sales growth as customers look for ways to reduce sugar, calories and fat in food and drink.

The Bulk Ingredients business had another period of "excellent" performance, well ahead of a strong comparative period, with improved overall earnings resulting from disciplined commercial execution and margin expansion.

Chief executive Javed Ahmed said: "We have made a strong start to the year, with good performance across the group and higher adjusted diluted earnings per share.

"Turning to the outlook, we expect underlying adjusted profit before tax in constant currency for the full year to be modestly higher than we anticipated coming into the year driven by the strong first half performance.”

Investec said: "The interim results provide some evidence that Tate is steadily turning around the business after several difficult years. We are pleased to see the company re-gaining some market share in SFI and investing in emerging markets (Tate expanded sales and applications facilities in Singapore, Shanghai and Mexico City).

"Longer term, however, the brokerage said it remains worried about pricing dynamics in Sucralose and lack of geographic and product diversification."

At 1000 BST, the shares were up 2% to 677.50p.