Sour European markets dent Tate sales
Wednesday 12 May 1999
The figures tell a tale of two cycles. Staley, the company's US-based speciality sweeteners business, benefited from lower raw material costs and higher prices. However, the commodity sugar businesses, in particular the European Amylum operation, experienced tough markets.
Group sales fell by pounds 108m, including a pounds 57m currency hit, to pounds 2.1bn. Underlying pre-tax profits rose 10 per cent to pounds 96m, including pounds 5m from asset sales. US sales accounted for 77 per cent of profits.
Larry Pillard, chief executive, said Tate would make UK job cuts as part of a programme to save pounds 15m annually within two years. He stressed the presence in speciality sweeteners - "Our strategy is to add value to carbohydrates" - but the speciality side yields only 30 per cent of profits.
Amylum, which makes starches from potato and wheat, delivered flat profits despite pounds 300m investment. The European sweeteners industry has overcapacity and Tate's rivals are investing in new plant. Yesterday Tate's shares fell 7.5p to 436p as a Italian rival warned of poor trading but still planned to raise capacity. "They're walking into the valley of death in Europe," said David Lang of Investec Henderson Crosthwaite.
Although the capital expenditure benefits are yet to kick in, a turnaround at Amylum depends on European rivals collectively raising prices - unlikely in the next six months. A poor potato harvest this summer would exacerbate Amylum's difficulties.
HSBC Securities forecasts pre-tax profits for the year of pounds 215m and earnings of 32.1p per share. On a long-term view the shares are good value on a forward p/e of 13.5, but do not expect them to skyrocket just yet.
The Microsoft mogul told fans a few home truths during his Reddit AMA
- 1 Woman falls to her death as she celebrates marriage proposal at the edge of Ibiza cliff
- 2 Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
- 3 Ball pool for adults opens in London
- 4 Baldness could soon be treated using stem cells, scientists hope
- 5 Amal Clooney gives excellent response to fashion question at European Court of Human Rights
Woman falls to her death as she celebrates marriage proposal at the edge of Ibiza cliff
Boris Johnson claims porn-obsessed Islamic jihadists are 'literally w*****s'
Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
Teenager brandishing fake gun taken down by police after demanding airtime on Netherlands' NOS TV station
Ball pool for adults opens in London
9 reasons Greece's experiment with the radical left is doomed to failure
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
Have we reached 'peak food'? Shortages loom as global production rates slow
Greece elections: Syriza and EU on collision course after election win for left-wing party
British grandmother Lindsay Sandiford faces execution by firing squad in Indonesia
Liberal Democrat minister defends comments suggesting immigration causes pub closures
iJobs Money & Business
£30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...
£13000 per annum: Recruitment Genius: This Pension Specialist was established ...
£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...
£25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...