Tate & Lyle sees annual profits rise by 5%
Food ingredients maker Tate & Lyle has bolstered annual profits in a sign that its plans to shore up the business were bearing fruit.
The company said adjusted pre-tax profits were in line with expectations, stepping up 5% to £193 million for the full year to March 31.
It was boosted in part by a 4% rise in speciality food ingredient sales to £897 million, while bulk ingredients sales slipped 1% to £1.46 billion, as it felt the impact of lower corn costs and weak ethanol prices in America.
Shares were up more than 1%.
The turnaround comes after it reported an 82% slump in annual profits in 2015 after the market for its main sweetener business turned sour.
Chief executive Javed Ahmed said the firm had driven home a "solid financial performance".
"The group made solid progress during the year delivering improved earnings. A number of major structural change initiatives were also completed to further strengthen the business, drive higher quality earnings, and position the group for long-term growth."
Earnings for its Splenda Sucralose business grew 4% to £156 million over the period, as the firm "pursued a rigorous value-based approach".
But the firm said it had faced losses in its ethanol business in the wake of the low oil price and high inventory levels for ethanol, which had put pressure on prices.
Meanwhile, North American bulk sweetener volumes grew 1%, thanks to a strong supply chain performance and growing demand in Mexico.
Mr Ahmed added: " Speciality Food Ingredients performed well, benefiting from improved mix, good volume growth in the Asia Pacific and Europe, Middle East and Africa (EMEA) regions, and improved Splenda Sucralose performance. Sales of new products launched from the innovation pipeline continued to grow strongly."
Analysts at Jefferies said Tate & Lyle's "underlying momentum" was robust despite facings more "adverse headwinds from ethanol".
They added that the stage was now set for "much better" full-year results in 2017.