27th May 2021 09:07
(Alliance News) -Â Tate & Lyle PLC on Thursday lifted its dividend for the recently ended financial year, but warned that earnings will take a hit in the year ahead.
Shares in Tate & Lyle fell 5.2% to 772.20 pence in London, making the stock the worst performer in the FTSE 250 early Thursday.
Revenue for the year ended March 31 rose fell 2.6% to GBP2.81 billion from GBP2.88 billion the year before, and pretax profit fell 4.4% to GBP283 million from GBP296 million.
The sweetener and food ingredients maker said demand for its products was closely linked to the imposition and easing of lockdowns in its largest markets of North America and Europe during the year.
Demand for products used in out-of-home consumption was hit in April and May, partially offset by stronger at-home consumption, and then improved as lockdowns eased from June. However, Tate & Lyle noted that, as it finished the year, out-of-home demand remained below pre-pandemic levels.
Because of the year's "robust" performance, Tate & Lyle is recommending a final dividend of 22.0p, up from 20.8p a year before, to bring the full-year payout to 30.8p per share, an increase of 4.1%.
"This increase brings dividends back to a level consistent with the board's progressive dividend policy, notwithstanding the pandemic," the company flagged.
For the year ahead, Tate & Lyle expects growth in adjusted operating profit before Commodities to be in the mid-single digit range in constant currency.
However, reflecting "significantly lower Commodities profits" and an increase in the adjusted effective tax rate, adjusted diluted earnings per share are expected to fall at constant currency. For the recently ended year, adjusted diluted EPS rose 12% at constant currency to 61.2p.
"Despite all the challenges thrown at us by the pandemic, we progressed our strategy, grew our profits, strengthened our financial position and increased our dividend," said Chief Executive Nick Hampton.
He added: "Since we announced our strategic priorities in 2018, we have delivered three years of consistent progress and built a strong platform for future growth. We are exploring the potential to separate our Food & Beverage Solutions and Primary Products businesses through the sale of a controlling stake in Primary Products to a long-term financial partner."
Tate & Lyle back in April said it was exploring a break-up by selling a controlling stake in its Primary Products business. On Thursday, the company said talks with potential new partners for Primary Products are ongoing.
By Lucy Heming;Â [email protected]
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