Sucralose inventor Tate & Lyle expects to beat inflationary pressures despite fall in demand for artificial sweetners
Tate & Lyle has posted a robust third quarter update amid inflationary headwinds, propped up by its food and beverage solutions division.
Its performance over the three months to December 2022 was in line with half-year trading, with a 19 per cent boost in food and beverage solutions offsetting an eight per cent fall in its sucralose business.
The ingredients giant is also grappling with inflation, which it is managing through higher prices, productivity and cost cutting.
This has eaten into the margins of its sweetener products on the shelves.
The FTSE 250 company’s outlook for full-year ending in March is unchanged and it expects a positive outcome from the 2023 calendar year pricing round.
Last year, Tate & Lyle posted adjusted profit before tax of £145m – at a rate of 14 per cent growth – with revenues hitting £1.3bn.
Revenue growth in food and beverage solutions has been powered by strong mix management, the pricing through of input cost inflation and acquisitions.
In North America, Tate & Lyle enjoyed continued revenue growth despite supply chain disruption.
It also benefitted from strong double-digit growth in both the regions of Europe and Asia, Middle East, Africa and Latin America.
Tate & Lyle is bullish over its sucralose business, and earlier this year it snapped up Quantum Hi-Tech dietary fibre business in China.
The company wants to expand its presence into Chinese and Asian markets.
Chief executive Nick Hampton said: “Tate & Lyle continues to perform well with Food & Beverage Solutions delivering another strong quarter of double-digit revenue growth.
“We have successfully renewed 2023 calendar year customer contracts to recover higher input costs and, despite ongoing economic uncertainty, we continue to deliver against our strategy as a growth-focused speciality food and beverage solutions business.”
Shares in the company are up 5.53 per cent in this morning’s trading on the FTSE 250 following the announcement.