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Tate & Lyle - A strong start to the year

Nicholas Holt | 21 July 2016 | A A A
Tate & Lyle - A strong start to the year

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Tate & Lyle plc Ordinary 25p

Sell: 650.40 | Buy: 650.80 | Change 4.40 (0.68%)
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Tate & Lyle have announced a strong set of Q1 results, with profit ahead of the same period last year in constant currency. Shares opened up 0.5% in early trading.

The Speciality Food Ingredients division saw profits ahead of the comparative period. Excluding SPLENDA, profits were slightly ahead as improving margins outweighed the effect of lower volumes. Strong volume demand in Europe, Middle East and Africa was more than outweighed by softer demand in North America and Asia Pacific.

Profits from SPLENDA Sucralose were significantly higher than a year previously, with strong volume growth following the sell down of inventory as a result of the consolidation of the sucralose manufacturing footprint.

Bulk Ingredients performed strongly with profit well ahead of the comparative period due to solid demand in the US, and strong manufacturing performance. Commodities performance was broadly in line.

Less than 2% of group revenues are generated form the UK with the majority of revenues being US dollar based. Group reported earnings would increase strongly if currency rates were to remain at current levels. It is estimated that a 1 cent change in the Sterling:US dollar exchange rate will lead to a £1.3 million change in adjusted profit before tax.

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 disclosure for more information.