Tate & Lyle lifts profits as CP Kelco deal kicks in
Tate & Lyle has posted a rise in profits and free cash flow for the year to 31 March 2025, as the FTSE 250 firm integrates its $1.8bn acquisition of ingredients maker CP Kelco and declares its long-running transformation “complete”.
The sweetener producer reported a four per cent increase in earnings before interest, tax, depreciation and amortisation (EBITDA), while free cash flow jumped to £190m, up £20m on last year, with a strong conversion rate of 82 per cent.
Meanwhile, Tate’s core earnings, including CP Kelco, EBITDA rose five per cent, as the integration of the pectin and gums producer, which was acquired last November, continues to progress ahead of schedule.
CP Kelco alone delivered a nine per cent rise in EBITDA with margin expansion of one per cent.
Opportunities ahead
Chief executive Nick Hampton said the group is now “right at the centre of the future of food”, with a product portfolio aligned to key long-term trends such as healthier, tastier, and more sustainable food and drink.
“With significant opportunities ahead, we are confident in the growth potential of our business”, he said.
Innovation-led revenues rose nine per cent, while new solution wins were up 21 per cent by value. Productivity benefits also came in ahead of target, delivering $50m in cost efficiencies.
The group ended the year with net debt EBITDA of 2.2 times, ahead of expectations, while returning £216m to shareholders through a buyback.
The full year dividend was raised 3.7 per cent.
Today’s report confirms guidance from Tate’s March trading update, which flagged a five per cent dip in revenue, but stronger margins and profit growth as the Kelco deal began to pay off.
Analysts will now be looking at how quickly the combined business can deliver its growth promise, with Tate confirming this morning it remains confident in meeting synergy targets.