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Speciality Ingredients buoy Tate & Lyle

Keith Bowman | 5 November 2015 | A A A
Speciality Ingredients buoy Tate & Lyle

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Tate & Lyle plc Ordinary 25p

Sell: 671.40 | Buy: 672.20 | Change -4.60 (-0.68%)
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Tate & Lyle, which operates through two global divisions, Speciality Food Ingredients and Bulk Ingredients, today (05 Nov 2015) reported half year results. Group adjusted profit before tax rose by 28% to £103 million (2014 - £80 million), with Speciality Food Ingredients enjoying a 28% increase and Bulk Ingredients a 9% fall. Overall group sales retreated by 2% to £1.17 billion, while the half year dividend payment was left unchanged at 8.2 pence per share.

The Chief Executive noted that "We have made an encouraging start to the year. Speciality Food Ingredients performed well as volume momentum built throughout the first half, as anticipated, and our new products targeted at the health and wellness space grew strongly. Bulk Ingredients performed steadily despite the impact of sharply lower ethanol margins." Projects to extend the capacity in Speciality Food Ingredients are on track and are a key focus for the board - 70% of group profits is now generated by Speciality Ingredients, with 30% of sales coming from Asia Pacific and Latin America.

The Chief Executive went on to note that "Overall, with our change programmes progressing as planned and executional disciplines strengthening across the business, we remain on track to deliver the guidance for the full year we set out in May, and for future growth." The share price rose by around 1.5% in early afternoon UK stock market trading.

Performance Highlights:

  • Group adjusted profit before tax up 28% at £103 million (2014 - £80 million)
  • Speciality Food Ingredients adjusted operating profit up 28% at £76 million (2014 - £59 million), improved mix and strengthened executional discipline
  • Volume from New Products increased by 50%
  • Bulk Ingredients adjusted operating profit 9% lower at £42 million (2014 - £47 million), impact of difficult commodity markets
  • Global supply chain performance strengthening
  • Adjusted free cash flow £32 million higher at £92 million (2014 - £60 million)
  • Interim dividend maintained at 8.2 pence per share

This article is not advice or a recommendation to buy, sell or hold any investment. No view is given on the present or future value or price of any investment, and investors should form their own view on any proposed investment. This article has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication. Non-independent research is not subject to FCA rules prohibiting dealing ahead of research, however HL has put controls in place (including dealing restrictions, physical and information barriers) to manage potential conflicts of interest presented by such dealing. Please see our full non-independent research for more information.