Tate & Lyle rises by a sweet 17.4%: Exchange rates help profits

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The Independent Online
WORLD sugar prices face a positive outlook and any production problems should send them higher, according to Stuart Strathdee, managing director of Tate & Lyle's international division, writes Rupert Bruce.

He said there were no surplus stocks and that the sugar price, at about 10 cents a pound, was well below its 40-year average of 16 cents. He believes that the price can rise to 13 cents before encountering consumer resistance.

The sugar and artificial sweetener company, which is chaired by Neil Shaw, saw pre-tax profit for the year to 25 September rise 17.4 per cent to pounds 222.5m. But pounds 19.1m of that was attributable to a currency windfall, in particular the effect of a stronger US dollar on North American profits. Fully diluted earnings per share rose to 32.7p from 26.2p. The dividend is 13p after 12p.

There were improved profits in the UK and profit recoveries in the group's US businesses.

Tate & Lyle Sugars in the UK benefited from the devaluation of the pound and cost-cutting. Its profit before interest was pounds 64.4m ( pounds 49.9m).

A prolonged strike at Staley in the US marred significant productivity improvements. Improved margins helped the business return a dollars 130m ( pounds 92m) profit before interest after dollars 118.7m.

Margins at Domino Sugar came under pressure after a record beet crop in the US, and a glut of potato starch in Europe and slack demand depressed prices and profits.

Group turnover rose to pounds 3.82bn from pounds 3.37bn. The shares rose 9p to 395p in response to figures that were at the top end of expectations.

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