Tate & Lyle profits plunge amid restructuring

The company said it expected no increase in earnings over the coming year, as pre-tax profit fell to £224m (€314m) from £322m (€451m) a year earlier, in line with the updated guidance it gave in February. Full-year sales were down 14% to £2.7bn (€3.8bn) from £3.1bn (€4.3bn) last year.

Tate & Lyle’s chief executive Javed Ahmed said the year to March 31, which was marked by three profit warnings, had been “very challenging” for the group.

Adjusted operating profit for the company’s beleaguered Splenda sucralose business was down £46m (€64m) for the year. Splenda sucralose now accounts for 6% of Tate & Lyle’s profit, down from a 20% share in 2010.

Ahmed said: “With the necessary actions underway we are firmly focused on improving our performance and continuing the evolution of Tate & Lyle into a global Speciality Food Ingredients business supported by cash generated from Bulk Ingredients.”​

The company’s profits were also hit by supply chain disruption during a particularly harsh US winter, lower sugar prices in Europe affecting its Bulk Ingredients business, and unfavourable currency exchange rates.

In April, Tate & Lyle said it would move all sucralose production to its Alabama plant and close its Singapore facility by spring 2016, incurring one-off net costs of about £125m (€175m). It said at the time that this should mean its sucralose business would break even within the next financial year and return to profitability by March 2017.

It also said it would exit most of its European Bulk Ingredients business as part of its plan to refocus on specialty, higher added value ingredients like sweeteners and starches.

Despite the flat earnings outlook for the year ahead, the company said it expected its results to pick up in the longer term.

Tate & Lyle share prices were down 4.4% to 573p in early trading.