FILE PHOTO: A technician uses an ice cream machine at the Tate & Lyle European Innovation Centre in Villeneuve d'Ascq
By Tanishaa Nadkar and Noor Zainab Hussain
(Reuters) - Shares in Tate & Lyle slipped more than four percent after the food ingredients company forecast broadly flat to low-single figure digit earnings per share growth for 2020.
It expects progress to be limited by lower profit from sucralose products and market challenges in primary products, which consist of high-volume sweeteners, industrial starches and fermentation products.
Shares in the British food ingredients maker were 4.2% lower at 758.8 pence at 1045 GMT, making then one the biggest percentage losers on London's midcap index.
Statutory pretax profit fell 16% to 240 million pounds for the year ended March 31, compared to analysts' expectations of 292.4 million pounds according to Refinitiv IBES.
The company, which traces its roots back to a sugar business in 1859, said it had felt the effects of one-off costs from both the sale of its oats ingredients unit and a simplification drive.
Adjusted pretax profit rose 4% to 309 million pounds, higher than company supplied consensus estimates of 303 million pounds.
Tate & Lyle has focussed more on speciality food ingredients such as artificial sweeteners and other products like starch, which carry higher margins than its much larger and more commoditised business of bulk ingredients.
The company, however, reported an 11% drop in adjusted operating profit from primary products business to 148 million pounds.
Investec analysts said inflation was a headwind for the unit, only partially offset by product mix and cost containment efforts.
The unit was also hurt by lower demand for carbonated soft drinks in the United States and lower commodities prices.
To counter a tough food and drink market, the provider of sweeteners and other ingredients has said last year it was looking to sharpen its focus on categories including drinks, dairy and soups, while simplifying its business and seeking more innovation, partnerships and acquisitions.
Tate & Lyle completed the sale of its oats ingredients business in March as it no longer meshed with the mainstream food categories on which it focuses, taking an exceptional charge of 43 million pounds.
The company, whose founder introduced sugar cubes to the UK in 1875, also took an one time 13-million pound restructuring charge as part of the simplification programme.
(Reporting by Tanishaa Nadkar and Noor Zainab Hussain in Bengaluru; Editing by Bernard Orr/Keith Weir)