7th Nov 2024 11:22
(Alliance News) - New-look Tate & Lyle PLC on Thursday backed its outlook, after reporting a "strong financial performance" in the first half of its financial year.
The provider of ingredients to food and beverage producers said pretax profit in the six months to September 30 fell 13% to GBP104 million from GBP119 million a year before, as revenue weakened 9.6% to GBP775 million from GBP857 million.
Adjusted earnings before interest, tax, depreciation and amortisation, however, rose 4.4% to GBP188 million from GBP180 million.
Tate & Lyle raised its interim dividend by 3.2% to 6.4 pence per share from 6.2p.
"It has been a momentous six months for Tate & Lyle. The combination with CP Kelco, preceded by the sale of Primient, transforms our business into a fully-focused speciality food and beverage solutions business directly aligned to attractive structural and growing consumer trends for healthier, tastier and more sustainable food and drink," Chief Executive Nick Hampton said.
"The business has continued to perform well delivering a return to volume growth, continued strong profit growth and excellent cash generation."
Tate & Lyle in June moved to acquire nature-based ingredients company CP Kelco US Inc. The USD1.8 billion takeover of the Atlanta, Georgia-based company will create a "leading global speciality food and beverage solutions business", Tate & Lyle said at the time.
The deal with JM Huber Corp consists of a USD1.15 billion cash portion, funded from new and existing debt facilities and cash resources, and USD645 million from the issue of 75 million new Tate & Lyle shares, giving a value of USD8.60 per Tate & Lyle share.
Consumer and industrial products firm Huber will "become a long-term shareholder" of Tate & Lyle, with a 16% stake on completion of the acquisition of CP Kelco.
CEO Hampton added: "Since the announcement of our combination with CP Kelco in June, we have seen a very positive response from our customers who recognise the much broader innovation and solutions capabilities we will offer. A joint team has developed a comprehensive integration plan which is focused on three priorities - serving our customers, clarity for our people and delivering performance.
"The combination with CP Kelco will significantly strengthen Tate & Lyle's position at the centre of the future of food. Our combined business, with its leading positions across sweetening, mouthfeel and fortification, deep scientific and solutions expertise, and unrelenting focus on the customer, creates a strong platform from which to accelerate delivery of our growth-focused strategy and create long-term value for shareholders."
In May, the company sealed the sale of its remaining stake in Primary Products Investments LLC, or Primient, for USD350 million. The near 50% stake was sold to KPS Capital Partners LP.
A new executive committee for Tate & Lyle will come into effect once the CP Kelco deal is sealed. It will include CEO Hampton and finance chief Sarah Kuijlaars. Jerome Bera and Didier Viala, both from CP Kelco, will be president of Europe, Middle East, Africa and chief solutions development officer, respectively.
Looking to the full year to the end of March, Tate & Lyle expects revenue to be "slightly lower" at constant currency, but expects Ebitda to rise by between 4% and 7%. Revenue in financial 2024 totalled GBP1.65 billion, while Ebitda amounted to GBP301 million, or GBP328 million on an adjusted basis.
Shares in the company were 0.1% higher at 774.50 pence each in London on Thursday morning.
By Eric Cunha, Alliance News news editor
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