Tate & Lyle share price: full-year adjusted pre-tax profit drops

on May 28, 2015
Updated: Oct 21, 2019

Tate & Lyle (LON:TATE) has this morning updated investors on its full-year performance.

**Highlights from the company statement:**
Group adjusted profit before tax in line with February guidance, 30% lower at £224m (2014 ‒ £322m):
Costs from operational and supply chain disruption of £20m
SPLENDA® Sucralose adjusted operating profit lower by £46m (£43m in constant currency)
European Bulk Ingredients adjusted operating profit lower by £17m
Speciality Food Ingredients adjusted operating profit 29% lower in constant currency at £149m (2014 – £213m)
Bulk Ingredients adjusted operating profit 19% lower in constant currency at £133m (2014 – £172m)
Business re-alignment announced on 21 April 2015 to further focus on and strengthen Speciality Food Ingredients:
Re-focus SPLENDA® Sucralose on rigorous value-based strategy and consolidate production into one facility: impairment charge of £113m included in total exceptional charges of £142m (2014 ‒ £14m)
Re-align Eaststarch European joint venture by acquiring full ownership of the more speciality-focused plant in Slovakia and exiting the predominantly Bulk Ingredients plants in Bulgaria, Turkey and Hungary. We will receive €240m in cash on completion of the transaction
Implementation of new supplementary disclosure framework to provide more detail on business performance, including new disclosure on Innovation; volume from new products nearly doubled in the year
Two major new product launches: DOLCIA PRIMA™ Allulose and CLARIA® Functional Clean-label Starches
Speciality Food Ingredients completed two ‘bolt-on’ acquisitions in Asia Pacific and Latin America
Proposed final dividend of 19.8p, making a total dividend of 28.0p (2014 – 27.6p), up 1.4% on prior year
The Board intends to maintain the total dividend payment at 28.0p for the year ending 31 March 2016
The year ahead will be one of structural change as we re-align the Eaststarch joint venture and SPLENDA® Sucralose, embed changes to improve our global supply chain capabilities, and bring on line additional growth capacity for Speciality Food Ingredients. We anticipate that, in this year of change, adjusted profit before tax for the year ending 31 March 2016 will be broadly in line with the 2015 financial year on a pro-forma basis8 assuming the Eaststarch transaction completes in the summer as expected.
The longer term outlook for the business remains positive. We expect the global market for speciality food ingredients to grow at mid-single digits and our objective is to grow modestly ahead of the market via organic growth supplemented by bolt-on acquisitions. We continue to target sustained cash flows from Bulk Ingredients and to dampen volatility where possible. As the mix of the Group moves towards our higher margin Speciality Food Ingredients business augmented by operational improvements, over time we expect to steadily enhance Group profit and returns on capital.
The Board recognises the importance of dividends to shareholders and remains committed to the dividend policy it implemented in 2009. Underpinned by the confidence it has in the strategy of the business, the Board intends to recommend an unchanged final dividend for the year ended 31 March 2015 of 19.8p to make a total for the year of 28.0p, an increase of 1.4%. Further, the Board intends to maintain the total dividend payment at 28.0p for the year ending 31 March 2016.
As of 07:08 BST, Thursday, 28 May, Tate & Lyle PLC share price is 599.50p.

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