Tate & Lyle PLC (LON:TATE) shares were higher on Thursday after the ingredients group said it expects its adjusted pre-tax profits for the full year to be “modestly ahead of the prior year” after a strong performance in the final quarter of 2020.
In an update for the three months to December 31, the FTSE 250 firm reported revenue growth of 8%, with growth in its food & beverage solutions (FBS) and primary products businesses of 8% and 9% respectively offsetting a 3% decline in sucralose revenues.
Tate & Lyle attributed the rise in FBS revenues to “higher volume, good price and mix management and continued growth from new products” while primary products benefitted from “strong operational execution, firmer demand and the phasing of some customer orders into the quarter”.
The sucralose business, meanwhile, had suffered from “customer mix and pricing pressure”, the company said, however, it added that volumes in the segment were slightly higher due to customer order phasing.
Looking ahead, the firm said despite the ongoing impact of the coronavirus (COVID-19) pandemic its adjusted pre-tax profit for the full year is expected to be modestly ahead as a result of “continued momentum” in the FBS business as well as cost discipline and “significantly higher” commodities profits year-on-year.
“This was a quarter of strong performance and strategic progress. Food & Beverage Solutions and Primary Products both delivered topline growth supported by excellent operational execution and cost discipline”, chief executive Nick Hampton said in a statement.
“While the operating environment remains uncertain and out-of-home consumption continues to be below pre-pandemic levels, the business has positive momentum. We remain focused on delivering our priorities and are well placed to emerge from this period an even stronger business”, he added.
The company’s shares were up 3% at 680.6p in late-morning trading.