In a statement covering the period from April 1 to June 30, the first quarter of its financial year, the company said: “In Bulk Ingredients, as expected, we experienced somewhat lower volumes in US bulk liquid sweeteners, although this was offset primarily by a stronger performance from EU bulk liquid sweeteners, where high sugar prices and lower corn costs resulted in higher margins than expected.”
The situation had been similar for its Speciality Food Ingredients division, where volumes and sales grew ahead of the wider speciality food ingredients market, said the company.
‘Strong volume growth’
“We experienced strong volume growth in Europe and emerging markets although this was partially offset by a softer performance in the US, where lower than expected sweetener sales resulted in slightly lower margins.”
It attributed weak US sucralose sales to US soft drinks being hit by cold spring weather.
Commenting on its statement, Shore Capital analyst Clive Black said: “Tate’s has a sound strategy to our minds that has materially bolstered the financial constitution of the group through a focus upon better cost control, tight working capital management and a judicious allocation of capital.”
The company announced on July 16 a food systems joint venture, Tate & Lyle Howbetter, with the acquisition of a 51% equity interest in Jiangsu Howbetter Food Co in China.
Tate & Lyle said the move provided a “solid platform on which to accelerate the growth of our Food Systems business in China”.
Acquisition of Biovelop
The business also referenced the acquisition of Sweden’s beta glucan manufacturer Biovelop in May, which it said “broadens our health and wellness offering”.
Tate & Lyle said its outlook for the full financial year remained unchanged and it continued to expect another year of profitable growth. Operating profit for the first year had been in line with expectations, it said.
It said it had reduced net debt from £479M to £426M from March 31 to June 30.