Shares in Tate & Lyle tumbled 16 per cent after tough competition in the sweeteners sector and supply-chain problems forced the group into a fresh profit warning.
In its second profit alert this year, Tate said declining demand for its Splenda sucralose sweetener and the resulting fall in the price it can get for its goods will hit full-year results.
It warned in February about the issues but the situation has worsened while costs to fix its supply chain have risen. The problems mean pre-tax profit for the year to end-March 2015 will be between £230 million and £245 million, against about £293 million analysts had expected.
The news is further pressure for chief executive Javed Ahmed, who has run the group since 2009 and oversaw the sale of its sugar business — including rights to use the Tate & Lyle brand — to American Sugar Refining in 2010.
Ahmed today said he has kicked off a review of the business, led by its chief financial officer. He added: “The group’s performance in the first half has been extremely disappointing as we have faced significant manufacturing and supply-chain challenges.”
Mike van Dulken at Accendo Markets said: “Shareholders have said enough is enough, and dealt the shares the same punishment as they did in February. This has taken them abruptly off seven-month highs, following an impressive 20 per cent seven-week recovery recently.” The shares fell 120.5p to 612p.Reuse content