Tate & Lyle unveils restructuring plans

LONDON (ShareCast) - Food ingredients maker Tate & Lyle (LSE: TATE.L - news) is set to implement a restructuring process, which will see the company leave the majority of its European bulk ingredients business and make changes to its Splenda sucralose division. The FTSE 250 group said it will receive €240m (£172.58m) from Archer Daniels Midland, after agreeing to exit bulk ingredients plants in Bulgaria, Turkey and Hungary that are operated by both groups as part of a European corn wet-milling joint venture.

As part of the deal, which is expected to be completed in the summer and which will bring the proportion of profits Tate earns from specialty ingredients up 5% to 55%, the London-listed company will also take full ownership of a more specialty-focused plant in Slovakia.

In a statement released on Tuesday, Tate added that in a bid to reduce productions costs, it will close a Singapore facility in the spring of 2016 and consolidate production of all its Splenda sucralose at a facility in Alabama.

Following the move, the company, which forecast one-time net charges of approximately £125m, said it expected the business to achieve breakeven in the year to March 2016 and to return to "modest profitability" in the year ending March 2017.

The group added it would recommend an unchanged final dividend for the year ended March 2015 that would make the total for the year 28 pence per share, up 1.4% year-on-year.

Tate & Lyle shares were up 0.69% to 658.00p at 08:59 on Tuesday.