FDBusiness.com

Tate & Lyle has issued a trading statement for the three months ended 31 December 2015, noting that the Group remains on track to deliver full year guidance.

Speciality Food Ingredients performed steadily with volume ahead of the comparative period. Strong volume growth in Europe and Asia Pacific more than offset softer demand in North America and Latin America. In Food Systems, volume continued to grow and also benefited from the acquisition of Gemacom in December 2014, however margins declined as a result of the sharp increase in certain ingredient costs. SPLENDA Sucralose volume was ahead of the comparative period although, as expected, pricing was lower year-on-year.

In Bulk Ingredients, North American sweetener volume in the quarter was slightly ahead of the comparative period. As previously communicated, the bulk sweetener pricing round will deliver modest margin gains in the fourth quarter. Commodities continue to have a material adverse impact on performance especially due to further weakness in the US ethanol market. As a result, the company now expects a small loss from Commodities for the full year.

Tate & Lyle said that its outlook for the full year remains unchanged. As previously communicated, the Group’s adjusted profit before tax from continuing operations in constant currency and on an equity accounting basis is expected to be broadly in line with that of the 2015 financial year at £193 million.

At reported rates, adjusted profit before tax is expected to be modestly below this figure.

The longer term outlook for the business remains positive, Tate & Lyle said. In Speciality Food Ingredients it expects the market to grow at mid-single digits, and over time the company’s objective is to grow modestly ahead of the market and to drive margin expansion, supported by increased utilisation of new capacity, growing revenues from new products, and a gradual return to growth in North America. While in the near term it expect sweakness in commodity markets to persist, Tate & Lyle said it will continue to target stable earnings from core Bulk Ingredients and to manage Commodities to dampen volatility.

Tate & Lyle plc is a British-based multinational agribusiness. The company was formed in 1921 from a merger of two rival sugar refiners, Henry Tate & Sons and Abram Lyle & Sons. The firm employs over 5,600 people.