23rd Jul 2008 07:00
Chairman's Annual General Meeting and Interim Management Statement At the Annual General Meeting of Tate & Lyle PLC, to be held in London today,Sir David Lees, Chairman, will make the following statement: INTERIM MANAGEMENT STATEMENT The Group has made a satisfactory start to the financial year with profit beforetax for the continuing operations (note 1) in the first quarter broadly in linewith the equivalent period in the prior year. At our Food & Industrial Ingredients, Americas division, we benefited fromimproved by-product returns driven by volatile and exceptionally high cornprices, which have reduced since the end of June. These were partially offset bysome additional costs as we commission new technology at the Loudon, Tennesseecorn wet mill. Food & Industrial Ingredients, Europe's improved co-product prices compensatedfor higher energy prices. The Food Systems businesses (Hahn and Cesalpinia)continued to perform well. Sucralose sales volume growth was strong and consistent with our capacityutilisation targets. As anticipated, sales values increased at a lower rate.Higher energy costs were offset by efficiency gains. The Singapore facility wascommissioned in June 2007, and so the first quarter of the current financialyear includes the impact of a full quarter of costs associated with this newplant. The EU sugar businesses, as has been widely reported, are operating in a verydifficult market while surplus stock is absorbed in anticipation of the firstreduction in the EU reference prices which will take place on 1 October 2008(when the raw sugar reference price will also reduce). Gas prices at the UKrefinery have been higher than expected, further validating the investment inthe biomass boiler which will be commissioned at the end of the currentfinancial year ending 31 March 2009. We are increasingly confident that, duringthe second half of the financial year, market equilibrium between supply anddemand for EU sugar will be restored, which should lead to progressively firmerrefining margins. On 2 July we announced the sale of the international sugar trading business toBunge Limited. The approvals required have now been obtained and the sale isunconditional. As already announced, the working capital in the business willremain with, and be collected and paid by, Tate & Lyle through to 31 March 2009at which point it will be assumed by Bunge upon final completion of thetransaction. At 31 March 2008, the net operating assets attributable to thebusiness being sold had a value of £106 million and related primarily to workingcapital. The business sold reported an operating profit of £4 million for the threemonths, which compares with a loss of £6 million for the six month period ended30 September 2007 and with a £9 million loss for the year to 31 March 2008. Theresults of international sugar trading have now been reclassified intodiscontinued operations. As a consequence the sale will have an impact on thecomparison of the continuing operations' profits with the equivalent period inthe prior year in both the first and second half years. As previously advised, the Group's tax rate is sensitive to the geographical mixof profits, with profits from the UK covered by tax losses while US profits aretypically taxed at between 37% and 39%. The disposal of international sugartrading increases the tax rate of the continuing operations as this businesscontributed to earnings in the UK. Given these factors and the performance of UKsugar refining, we would now anticipate a tax rate for the full year in theregion of 31% for the continuing operations. Group net debt at 30 June 2008 was £967 million compared with £1,041 million at31 March 2008. OUTLOOK FOR THE CONTINUING OPERATIONS The general deterioration in global economic conditions, particularly in the USAand specifically in raw materials and energy, makes any statement about theoutlook more difficult than usual. Nevertheless, with three months of thefinancial year behind us and with three of the four divisions having started theyear in line with our expectations, we are on track to make progress for theyear as a whole. Note 1: Continuing operations do not include international sugar trading as,following the announcement of its sale on 2 July 2008, it has been classified asa discontinued operation. END A conference call will be held today at 8.00am BST, hosted by Iain Ferguson,Chief Executive and John Nicholas, Group Finance Director. Participants arerequested to dial in at least 5 minutes before the commencement of the call.Dial in details are as follows: Participant dial in number: +44 (0) 1452 586 513 (UK freephone 0800 694 1503)Conference ID: 57096658 Replay dial in number: +44 (0) 1452 550 000 (UK freephone 0800 953 1533)Replay passcode: 57096658# A replay of this call will be available from two hours after the end of the livecall for 7 days until 29 July 2008. For more information contact Tate & Lyle PLC: Tim Lodge, Director of Investor RelationsTel: 020 7626 6525 or Mobile: 07798 837317 Rowan Adams, Director of Corporate Communications (Media)Tel: 020 7626 6525 or Mobile 07713 067 542 Copyright Business Wire 2008Related Shares:
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