Investors flocked to Tate & Lyle (TATE) today to send its shares up 6.7% after the ingredients group reassured the market with a steady first quarter trading update.

The sucralose producer said its trading performance was in line with expectations in the three months to 30 June and full-year guidance remained unchanged.

Tate had a miserable financial year in 2014-15, issuing three profit warnings as it suffered from low US volumes and falling sweetener prices. Adjusted pre-tax profits slumped 30% to £224m and sales plunged 14% to £2.7bn for the year ended 31 March.

Today’s quarter one update settled the City’s nerves and sent Tate’s stock up 34.5p to 544.5p. Jefferies analyst Martin Deboo said the “steady as she goes message” was reassuring, while Robert Waldschmidt at Liberum added it was a “solid start” in what was a transition year.

“While no further blow-ups is a clear relief, Tate still needs to demonstrate that the business can deliver sustainable, profitable growth and improve cashflow generation to cover future dividends and support debt repayment or M&A,” Waldschmidt said.

In the first quarter, Tate said its speciality food ingredients business made an “encouraging” start to the year and performed ahead of the comparative period, with Splenda performing “solidly”.

Sweetener demand helped the bulk ingredients division in the period but was offset by the impact of commodities, including the continuation of low US ethanol margins.

“Overall, before the impact of exchange rate movements and the final timing of the completion of the Eaststarch transaction, expectations for the group’s full-year performance remain unchanged from our guidance in May,” Tate said.

In April, Tate signed an agreement with Archer Daniels Midland Company to realign the corn milling Eaststarch joint venture in Europe. The move saw the company exit the plants in Bulgaria, Turkey and Hungary and take full control of more speciality-focused plant in Slovakia.

Tate said today that the process of obtaining regulatory approval for the re-alignment was “progressing well” and expected to complete by the end of the second quarter.

The group raised $400m (£256m) in a private corporate bond placement last week to refinance existing debt and underpin future growth.

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