Tate & Lyle admits profit will be hit by corn fungus and weaker sales
Shares in Tate & Lyle sank to the bottom of the FTSE 100 index yesterday after the sweeteners group admitted that high world prices for corn – a key raw material for its products – would eat into its profits this year.
Full-year operating profit would be £7m lower, Tate & Lyle warned.
It laid part of the blame on aflatoxin, a fungus that thrived in the the unusually hot and dry conditions on corn fields last summer.
It added: "Corn supplies in the US and Europe remained tight and … prices are expected to remain high with some volatility over the coming months until the new harvest."
Another problem flagged up by the City was a surprise slowdown in sales of sucralose. The company makes about a fifth of its profit from the sweetener, which is derived from sugar and sold under the Splenda brand.
Tate & Lyle admitted that sucralose sales were "not as strong as anticipated and we now expect volumes for the full year to be slightly lower than last year." Analysts say that is mainly because of competition in Europe.
Tate & Lyle concluded: "Despite facing a number of headwinds, and before the impact of exchange rate movements, we expect to make modest progress this financial year."
Aflatoxin: A deadly poison to livestock
Aflatoxin is a naturally occurring carcinogenic byproduct of an olive-green mould that can be fatal to livestock. Caused by the Aspergillus fungus, aflatoxin develops on crops affected by high temperatures. Fears over the fungus have emerged in the US, where corn farmers have been hit by the worst drought in more than 50 years. The toxin can also be found in the milk of animals fed contaminated feed, as well as some spices, nuts, dried fruit and cereals. Level of aflatoxins allowed in foods imported into Europe are limited and products are tested.
- 1 'Kidnapped boy may have been abused and murdered by VIP paedophile ring,' say police
- 2 Ridley Scott on Exodus, Gods and Kings casting: 'I'm not going to get it financed if my lead actor is Mohammad so-and-so from such-and-such'
- 3 Girl, 7, gets Tesco to remove 'stupid' sign suggesting superheroes are 'for boys'
- 4 This letter from a reader explains why women can’t play football
- 5 'You should come to my house and eat cheeses with me': 4-year-old sends adorable love letter to girl at school
Black Friday 2014: Opening times for Asda, John Lewis, GAME, PC World and Argos
Miss Honduras Maria Jose Alvarado's stylist Luis Alfredo Garcia is found stabbed to death
Dr Lam Hoe Yeoh: Voyeur doctor jailed for eight years after using network of hidden cameras to film patients, colleagues and friends on the toilet
'You should come to my house and eat cheeses with me': 4-year-old sends adorable love letter to girl at school
Scientists predict green energy revolution after incredible new graphene discoveries
Ukip says babies born to immigrants in the UK should be classed as migrants – which would include Nigel Farage’s own children
Rochester by-election: Ukip gains second MP as Tory defector Mark Reckless holds seat
'Beast of Bolsover' Dennis Skinner takes Ukip MP Mark Reckless to task moments after he is sworn in
The young are the new poor: Sharp increase in number of under-25s living in poverty, while over-65s are better off than ever
Tamir Rice: 12-year-old boy playing with fake gun dies after being shot by Ohio police
Exclusive: UK approved £7m Israeli arms sales in six months before Gaza conflict
iJobs Money & Business
£6000 - £60000 per annum + Bonus and Benefits: Ampersand Consulting LLP: UI De...
£18000 - £23000 per annum + Comission: SThree: SThree, International Recruitme...
Negotiable: h2 Recruit Ltd: A rapidly expanding, global Software/ SaaS Vendor ...
£20000 - £25000 per annum + OTE £Competitive: SThree: SThree Group and have be...