Sucralose producer Tate & Lyle (TATE) has seen its stock rise 2.3% so far today to 622p on the back of a pre-close trading update for the fourth quarter.

Tate stuck to the guidance, given at the third quarter, in the brief statement to the London Stock Exchange of full-year pre-tax profit “modestly below” the range of £230m to £245m. Analyst consensus is looking for a figure of £225m.

The group said its adjusted operating profit had been held back in the year ended 31 March as expected as it suffered operational and supply chain issues in the first half and battled in an “extremely competitive market” for its Splenda brand.

However, Tate added the launch of its new low-calorie sugar innovation Dolcia Prima had registered “encouraging early interest and engagement” from customers. But given the relatively long development and adoption cycles for new ingredients, the group did not expect it to have any material effect on performance during the next financial year.

Net debt at the year end is expected to be about £500m, higher than the £466m reported at 31 December as a result of investment in working capital as we continue to rebuild inventories and adverse exchange translation of £20m thanks to a strengthening US dollar.

Martin Deboo at investment bank Jefferies said the “reassuringly dull” Q4 update brought an end to Tate’s “annus horribilis” in 2014-15 in which the group issued three profit warnings as it suffered from low US volumes and low sweetener prices.

Tate added in the statement that a decision on what it would do with Splenda was “imminent” as a review into the sucralose brand reached its conclusion. Jefferies has argued that Tate has three possible choices: fix, close or sell the business.

Deboo said closing the plants was an unattractive proposition as it would incur massive one-off costs running into the hundreds of millions. He added it might be able to find a buyer for the assets despite eroding profits but warned the group would need to think carefully about exiting from what remains the “world’s top-selling sweetener”. It left Jefferies preferred outcome of fixing the business, with a more focused approach potentially putting Sucralose back on a path to “modest but sustainable” profitability.

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