18th Jul 2007 07:00
CHAIRMAN'S AGM AND INTERIM MANAGEMENT STATEMENT At the Annual General Meeting of Tate & Lyle PLC to be held in London today, SirDavid Lees, Chairman, will make the following statement: Trading Update Trading in the current financial year has started in line with our expectationswith total operating profit at constant exchange rates for the first threemonths similar to the prior year. Profit from continuing operations* at constant exchange rates was below theexceptionally strong first quarter of the prior year. Sales of SPLENDA(R) Sucralose in the first quarter were ahead of the comparatorperiod with customer de-stocking thus far having less of an effect thananticipated. The predicted increase in fixed costs arising from the start ofproduction at the new Singapore facility impacted profits which nevertheless forthe quarter were ahead of last year. At this stage of the year we continue toexpect satisfactory sales growth for the year but that any increase in operatingprofit is likely to be modest and second half weighted. Profits from continuing operations* in the Ingredients divisions for the quarterwere somewhat below last year. Whilst the main operations at Ingredients,Americas were ahead of the prior year, this was more than offset by lowerreturns from ethanol and citric acid. Profit from the continuing operations* inIngredients, Europe was better despite higher raw material prices. While cornprices in America have reduced following US Department of Agriculture forecastsof a good harvest this year, prices for both wheat and corn in Europe havesignificantly increased. European sales prices will be increased where possiblein order to offset these higher costs. Profits from continuing operations in the Sugar division as a whole weresignificantly lower than the comparative period principally due to a return to amore normal level of profitability in sugar trading and continuing difficultmarket conditions in the EU and Vietnam. The Group generated positive free cash flow for the three months to 30 June2007. There have been no material changes to the Groups net assets since 31 March2007. Transaction Update In the last three months, certain previously announced transactions have beencompleted or progressed as contributors to our strategy of creating a strongervalue added business building on our low cost commodity base whilst, at the sametime, reducing the impact of our exposure to volatile markets. The sale of Tate & Lyle Canada Ltd for a net consideration of £131 million wascompleted on 21 April 2007. The profit on disposal was £55 million, subject toclosing adjustments, and will be reflected as an exceptional item in the resultsfor the first half year. On 15 June 2007 we completed the acquisition of an 80% holding in Germanspecialty food ingredients group G. C. Hahn & Co for a total cash considerationof £78 million. This investment will broaden both our value added productoffering and our customer base. In early May we announced that we were in exclusive discussions with Syral SAS(a subsidiary of Tereos of France) for the disposal of our interest in thefacilities of Food & Industrial Ingredients, Europe in the UK, Belgium, France,Spain and Italy. We announced today that we have signed an agreement for thedisposal of these facilities for a consideration of EUR 310 million (£209million), subject to closing adjustments. The disposal is expected to result inan exceptional loss of approximately £20 million after restructuring costs. Thetransaction, which is subject to antitrust approval, will reduce the impact ofour exposure to volatile markets and to the EU sugar regime. The disposal of our interest in Occidente, our joint venture cane sugar producerin Mexico, is being explored with a number of interested parties. At 31 March2007 Tate & Lyle's share of the net operating assets of Occidente was £42million. Tate & Lyle's share of the operating profit for the year to 31 March2007 was £6 million. Further announcements on this transaction will be made asappropriate. Outlook As advised in our preliminary results statement we regard 2007/8 as a year oftransition. The development of our core Ingredients and Sucralose businesses isprogressing satisfactorily and our expectations for these businesses have notchanged. As described above, we are experiencing market weakness affecting our sugar,ethanol and citric acid businesses and a challenging European cereals market. Inaddition, the strength of sterling is likely to adversely impact our reportedresults and as a consequence, our current expectation of continuing operations*results for the year to 31 March 2008 is slightly lower than when we announced our results for theprevious financial year in May. Taxation We have made good progress in improving our tax management and will beimplementing revised financing arrangements over the next few months. The partyear impact in 2007/08 is likely to be modest and is dependent on expectedregulatory approval. The anticipated full-year saving in 2008/09 should besubstantial. Return of Capital to Shareholders Subject to the renewal of authority from shareholders at today's AGM, the Boardintends to commence an on-market share buy back programme for an amount of up to £275 million. In deciding on the quantum of the buy back programme, the Boardtook into consideration the future capital expenditure requirements of thebusiness, discussions with the credit rating agencies and the importance weattach to maintaining our investment grade rating. END * continuing operations relates to the Group as a whole less results relating toRedpath, Eastern Sugar and those facilities of Food & Industrial Ingredients,Europe which are being sold as announced today and referred to above. \* TFor more information contact Tate & Lyle PLC: Mark Robinson, Director of Investor RelationsTel: 020 7626 6525 or Mobile: 07793 515861 Ferne Hudson, Head of Media and Public RelationsTel: 020 7626 6525 or Mobile: 07713 067433\* T About Tate & Lyle: Tate & Lyle is a world leading manufacturer of renewable food and industrialingredients. It uses innovative technology to transform corn, wheat and sugarinto value-added ingredients for customers in the food, beverage,pharmaceutical, cosmetic, paper, packaging and building industries. The Companyis a leader in cereal sweeteners and starches, sugar refining, value added foodand industrial ingredients, and citric acid. Tate & Lyle is the world number-onein industrial starches and is the sole manufacturer of SPLENDA(R) Sucralose. Headquartered in London, Tate & Lyle is listed on the London Stock Exchangeunder the symbol TATE.L. In the US its ADRs trade under TATYY. The Companyoperates more than 60 production facilities in 23 countries, throughout Europe,the Americas and South East Asia. In the year to 31 March 2007, it employed6,900 people in its subsidiaries with a further 2,300 employed in jointventures. Sales in the year to 31 March 2007 totalled £4.0 billion. Additionalinformation can be found on http://www.tateandlyle.com. SPLENDA(R) is a trademark of McNeil Nutritionals, LLC Copyright Business Wire 2007Related Shares:
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