Tate & Lyle shares have fallen almost 12% after the ingredients maker posted a drop in revenue from falling prices.
Turnover was down 4% to £357m in the three months to 31 December, despite a 4% rise in volumes for its biggest division, food and beverage.
As a result, the FTSE 250 company said revenue for the year to March 2025 is expected to fall by a mid single-digit percent, while underlying profit growth will be “towards the lower end of our guidance range of 4% to 7%”.
Tate & Lyle’s buyout of CP Kelco, a leading provider of pectin, was completed in November with the new business delivering £66m in revenue since then. It will operate as one business from 1 April.
Under the new structure, Tate & Lyle is targeting cost savings of $50m by the end of the 2027 financial year, as well as the identified revenue synergies over the medium term.
The business said that while market demand remains stable, it has not seen the acceleration in demand it expected in the second half of the year.
“The muted consumer demand environment and ongoing geopolitical uncertainties reinforce the importance of the steps we have taken to reposition Tate & Lyle over the last six years,” said CEO Nick Hampton. “In this environment, we remain focused on delivering profitable volume growth.”
The sucralose business performed strongly with revenue up 19% to £41m. This was due to a growth in orders, although the business expects these to unwind in the final quarter.
Tate & Lyle said it had made “good progress” against its cost savings target of $150m across five years.
No comments yet