Tate & Lyle maintains outlook despite US softness in Q1

24th Jul 2013 07:53

Food ingredients firm Tate & Lyle said that adjusted profits were in line with expectations in spite of tough weather conditions in the States in the first quarter.The group, well known for its sugar and SPLENDA sweeteners brands, said on Wednesday morning: "Our outlook for the year remains unchanged and we continue to expect to deliver another year of profitable growth."The company saw "volume softness" in the beverage sector during the period from April 1st to June 30th, impacting its Bulk Ingredients division due to the "unusually cold spring and slow start to the summer in the US".However, this was offset by a stronger performance from bulk liquid sweeteners in the EU, where high sugar prices and lower corn costs resulted in higher margins than expected.Tate's other main division, Speciality Food Ingredients, saw volumes and sales growth outperform the wider market after seeing strong growth in Europe and the emerging markets partly offset by a softer performance in America.The company said its financial position "strengthened" during the period, with net debt falling to £426m by June 30th, from £479m at the end of March.Analysts at Jefferies chose to keep their 'buy' rating for the stock after the statement on Wednesday. "Management had warned that first-quarter volumes would be weak at the time of the full-year results in May and so this will not come as a surprise to the market, especially after [sector peer] Ingredion's profit warning last week (which was partly predicated on weaker US volumes)," they said.The stock was up 1.15% at 833p in early trading.BC