When Nick Hampton took over as chief executive of Tate & Lyle (TATE) in the spring, he set out three main objectives: improve customer relationships, develop new products, and simplify the business. Encouragingly, this half-year report shows progress.The number of customer meetings has doubled, with around 40 per cent of new products now co-developed, and more products are being sent directly to customers - in turn, cutting down on warehousing needs.
But 'simplifying the business' resulted in around £47m of exceptional charges during this period, the most significant of which was a £40m non-cash impairment taken against the oats ingredients business. A further £2m related to wider restructuring efforts.
But analysts were still impressed that North American food and beverage volumes rose 3 per cent in a flat market, while volumes sold across Asia Pacific and Latin America jumped by 16 per cent. Sucralose volumes grew 7 per cent, beating broker Investec's expectations of 1 per cent, although continued pricing pressure as a result of excess market capacity kept profits down.
Analysts at Investec expect pre-tax profits of £302m during the year to March giving EPS of 50.9p, compared to £301m and 50.1p in FY2018.
TATE & LYLE (TATE) | ||||
ORD PRICE: | 696p | MARKET VALUE: | £3.25bn | |
TOUCH: | 695-696p | 12-MONTH HIGH: | 714p | LOW: 523p |
DIVIDEND YIELD: | 4.2% | PE RATIO: | 15 | |
NET ASSET VALUE: | 302p* | NET DEBT: | 24% |
Half-year to 30 Sep | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
2017 | 1.40 | 161 | 26.8 | 8.4 |
2018 | 1.38 | 113 | 17.6 | 8.6 |
% change | -1 | -30 | -34 | +2 |
Ex-div: | 22 Nov | |||
Payment: | 4 Jan | |||
*Includes intangible assets of £354m, or 76p a share |