Ingredients Firm Tate & Lyle Sees Profit Up, But Sales Fall
British food ingredients firm Tate & Lyle on Thursday reported higher annual profits, helped by gains in all its business units and lower costs.
The company, which sells corn syrup and other ingredients to food and drink makers, said profit before tax rose 23 percent to 286 million pounds ($382 million) in the year ended March 31.
Sales, however, fell 2 percent to 2.7 billion pounds, hurt by a 10 percent drop in sales of sucralose sweetener.
Looking ahead, Tate & Lyle expects earnings per share growth for the year ending March 2019 to be at the lower end of a mid-single digit range in constant currency, due to higher costs for energy and transport in North America and commodities.
In order to boost performance, Tate & Lyle said it planned to sharpen its focus on key categories including drinks, dairy and soups, accelerate portfolio development through innovation, partnerships and acquisitions and simplify its business to deliver $100 million in productivity savings over four years.
As these efforts gather momentum, the company said earnings growth would accelerate, while return on capital and cash generation would improve.
In recent years, Tate has been putting more focus on specialty food ingredients, which carry higher margins than its much larger and more commoditised business of bulk ingredients.