Tate & Lyle plummets as US sweetener weakness prompts profits warning

6th Feb 2015 07:42

Sweeteners maker Tate & Lyle, famous for making Splenda sucralose, disappointed investors on Friday with a profit warning on the back of weakness in the bulk ingredients division, which accounts for around two-thirds of sales.The performance of bulk ingredients in Tate & Lyle's third quarter ended 31 December 2014 was behind the previous year and below the company's own projections due to lower sweetener volumes in the US as a result of capacity constraints in the wider US transportation network.Meanwhile, weakened EU sugar prices affected bulk sweetener prices in Europe, and the company experienced a sharp deterioration in ethanol margins near the end of the period.The other speciality food ingredients division performed in line with expectations, with volumes up on the previous year on the back of solid growth in Europe and Asia Pacific.However, with the tough conditions affecting bulk ingredients expected to continue into the fourth quarter, Tate & Lyle said it now expects adjusted pre-tax profits for the year ending 31 March to be below previous guidance of £230m-245m.The earlier forecast, given in September, still represented a significant drop on the £322m reported the previous financial year.The stock was down 14.3% at 569.5p in early trading.