Tate & Lyle shares rise amid bottom line boost


Tate & Lyle shares climb as the group enjoys sweetened bottom line despite ‘significant inflation’ across supply chain

  • Tate & Lyle saw its profit and revenue grow over the past year
  • FTSE 250-listed group has completed acquisition of Chinese prebiotic group 

Tate & Lyle shrugged off ‘significant inflation’ across its supply chain to boost its revenue and profit over the past year.

The group, which expects its profit for the current year to fall in line with market expectations, also revealed on Thursday it had completed the acquisition of Chinese prebiotic dietary fibre business Quantum Hi-Tech (Guangdong) Biological. 

Tate & Lyle shares have risen today and were up 2.37 per cent or 17.66p to 762.66p. having fallen by around 18 per cent in the past year. 

Boost: Tate & Lyle enjoyed a boost to its revenue and profit over the past year

The food and drinks ingredients group unveiled revenue for its continuing operations of £1.37billionn for the year to end-March, marking a rise of 18 per cent on a year ago.  

Its adjusted pre-tax profit from continuing operations rose by 14 per cent to £14million.

The company said it mitigated £100million worth of cost inflation in its continuing operations by pricing, productivity, cost discipline and volume/mix.   

Boss Nick Hampton, said: ‘This has been a landmark year for the company. New Tate & Lyle delivered double-digit organic revenue growth across all regions and double-digit profit growth despite significant inflation across the supply chain.

‘Tate & Lyle is now a focused global leader in sweetening, mouthfeel and fortification, and very well-placed to benefit from growing consumer demand for healthier food and drink. 

‘Our strong balance sheet allows us to invest in organic and inorganic growth and the acquisition of Quantum Hi-Tech, a leading dietary fibre business in China, demonstrates our ability to further strengthen our portfolio and deliver on our growth agenda.’ 

The FTSE 250-listed group said it delivered a ‘significant acceleration’ in innovation, with over 35 per cent new product revenue growth.

Adjusted diluted earnings per share were down 4 per cent at 56p, and the group declared a 21.8p a share full-year statutory dividend, down 29 per cent year-on-year. 

Laura Hoy, an equity analyst at Hargreaves Lansdown, said: ‘Tate & Lyle are making good on promises to create a lean, mean, ingredient making machine. 

‘The group’s been reworking its portfolio to streamline its focus on more profitable parts of the business. 

‘The first set of results under this new structure did not disappoint, with both top and bottom line growth on the menu despite inflationary headwinds. 

‘Tate overdelivered on its cost saving programme, and did so years ahead of schedule. This is a promising sign that management’s got a clear vision for the future. 

‘Some of this progress could be muddled by inflationary issues moving forward. Tate’s heavily reliant on corn to make its products, and that’s one of Ukraine’s key exports. 

‘That’s causing prices to rise at a brisk clip and inflation in the final quarter offset some of Tate’s hard-fought efficiency improvements. This could be a sign of things to come if input costs continue to balloon. 

‘However it seems the group’s in a better position than most to survive persistent inflation. This could be a long-term benefit to Tate as it opens the door for the group to acquire struggling businesses to compliment its existing portfolio.’

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