Shares in Tate & Lyle (TATE) sweetened up 7.2% to 679p on Thursday after the speciality ingredients supplier put up better than expected results for the first half to September 2020.

A tasty step-up in free cash flow, a £93 million net debt reduction to £358 million and a maintained 8.8p dividend were among the highlights.

While out-of-home demand remains ‘below pre-pandemic levels’, Tate & Lyle has experienced stronger in-home consumption and is also generating palate-pleasing sales growth from new products despite the challenges presented by the Covid crisis.


Tate & Lyle is a global provider of corn-based sweeteners and starch ingredients as well as sucralose zero-calorie sweeteners that has transformed itself into a higher margin and more stable speciality ingredients supplier.

Investors showed appetite for the shares on the news adjusted pre-tax profit perked up 3% on a constant currency basis to £180 million in the half, comfortably ahead of the £149 million called for by consensus. Earnings per share grew by a forecast-busting 9% to 32.1p with a boost from a lower tax charge.

The first half earnings ‘beat’ reflected robust performances from Tate & Lyle’s Food & Beverage Solutions and Commodities operations, which offset lower profits from Sucralose, and Sweeteners and Starches.

While total sales fell 4% to £1.39 billion, reflecting lower demand for products in out- of-home use, the Food & Beverage Solutions division delivered 9% profits growth to £98 million.


According to chief executive Nick Hampton, the half demonstrated ‘the strength, resilience and agility of our business with group profit higher, revenue growth in Food & Beverage Solutions and the interim dividend maintained’.

The Food & Beverage Solutions arm ‘delivered revenue and profit growth as our technical capabilities in sweetening, texture and fibre fortification supported customer demand for products that are lower in sugar, calories and fat, and with added fibre.’

Hampton was also at pains to point out that his charge, which recently agreed to acquire a speciality tapioca food starch business in Thailand, expanding its offering of plant-based, clean-label texturant solutions, has a very healthy new business and innovation pipeline.

‘New products revenues are up 8% and we continue to find creative ways to use technology to support and connect with our customers’, he explained.


Find out how to deal online from £1.50 in a SIPP, ISA or Dealing account. AJ Bell logo

Issue Date: 05 Nov 2020