Sweet side to Brexit for Tate & Lyle as falling pound boosts profits
Food ingredients maker Tate & Lyle enjoyed a sterling sweetener after the Brexit-hit pound boosted profits by £15 million.
The firm said pre-tax profits leapt 83% to £128 million in the six months to the end of September, while sales rose 13% to £1.321 billion over the period.
Tate & Lyle, which reports in pounds but trades in a mix of foreign currencies, said its full-year results could enjoy an uplift of £40 million if sterling remains weak.
The company behind Splenda sweeteners said its two core operations had driven growth, with adjusted operating profits at its speciality food ingredients and bulk ingredients divisions rising 12% and 36% respectively.
Shares were up more than 3%.
Chief executive Javed Ahmed said the company's performance was helped in part by strong soft drink sales in America, which led to a robust demand for its US bulk sweetener.
"Speciality food ingredients performed well and consistent with our 2020 ambitions, delivering double-digit profit growth in the core business," Mr Ahmed said.
"All regions delivered solid volume performance other than North America, where volume was held back by lower demand. Sales from new products continued to gain good traction.
"Bulk Ingredients performed particularly well, driven by solid demand, robust margins and strong manufacturing performance."
The update comes after the firm reported an 82% slump in annual profits in 2015 after the market for its main sweetener business turned sour.
Analysts at Liberum said: " Tate is now on the path of sustained recovery with management clearly focused on improving returns, cash flow and margins, especially in speciality food ingredients."