Tate & Lyle sees slight rise in full-year earnings
LONDON (Reuters) - British sweeteners and starches maker Tate & Lyle Plc (TATE.L) expects a small rise in full-year profits, as its food ingredients gain from a trend towards healthier eating, although first-half profits will be flat due to one-off factors.
The London group's first half ending September 30 is being held back by the cost of re-opening a second plant for its zero-calorie sucralose sweetener Splenda and the absence of bumper profits from the high prices gained for its animal feed by-products the previous year.
Analysts said these two impacts will fall away in the second half of its year and see a rise of around 3 percent in annual earnings for the full year through March 2013.
In last year's first half, the company made an operating profit of around 194 million pounds ($313 million).
"Overall, while recognizing the current level of uncertainty around the wider economy and volatile corn markets, we continue to expect to make progress this financial year," the company said in a trading statement on Thursday.
Analyst Dirk Van Vlaanderen at Jefferies, Tate's own broking adviser, said he expects little change to consensus estimates for a 3.1 percent rise in full-year earnings to 56.4 pence a share, but added there was a subtle shift to a more positive tone.
The group said volume of sucralose returned to growth in its second quarter (July to September), but half-year volumes would still be lower due to a tough first quarter, hit by poor trading in Europe and comparisons with a strong year-ago period.
The company dusted down its McIntoch sucralose plant in Alabama earlier this year as its sole plant in Singapore was struggling to cope with demand.
The group was giving the update towards the end of its half-year and ahead of first-half results on November 8.
Tate's shares edged up 1.6 percent to 665 pence by 0725 GMT in a slightly firmer London stock market.
($1 = 0.6193 British pounds)
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