Tate & Lyle reported improved third-quarter revenues on Thursday, boosted by strengthening global demand, and forecast final profits “modestly” up on the previous year.
Group revenues improved 8% in the three months to 31 December. Within that, sucralose revenues dipped 3% but food and beverage solutions rose 8% and primary products was ahead 9%.
Within food and beverages, North America saw double-digit revenue growth, Tate & Lyle said, helped by strong demand for in-home products and improving demand in out-of-home consumption. There was also strong growth in Asia Pacific, especially in China.
The Covid-19 pandemic dented trading in sucralose, with demand impacted by lower consumption of out-of-home products.
However, full-year adjusted pre-tax profits are still expected to come in “modestly ahead” of the prior year, Tate and Lyle said, “benefiting from continued momentum in food and beverage solutions, cost discipline and significantly higher year-on-year commodities profits”.
Chief executive Nick Hampton said: “This was a quarter of strong performance and strategic progress. Food and beverage solutions, and primary products, both delivered topline growth supported by excellent operational execution and cost discipline.
“While the operating environment remains uncertain and out-of-home consumption continues to be below pre-pandemic levels, the business has positive momentum.”
As at 0900 GMT shares in Tate & Lyle were ahead 3% at 682.0p.
Akhil Patel, analyst at Shore Capital, said: “Overall the group has delivered a strong performance.
“We do not have forecasts in the market at this time, having withdrawn forecast as lockdown commenced. However, we do anticipate expectations to be upgraded today, driven by the beat in commodities. We will look to reintroduce forecast shortly – that said, we expect Tate & Lyle’s stock to perform well today.”
