Tate & Lyle wary of euro crisis effects

Sweetener and starches maker Tate & Lyle said it was concerned about the ongoing eurozone crisis after it posted a 38 per cent jump in half-year profit as it saw little impact yet from the global economic downturn.

The London-based group posted a first-half pre-tax profit of £180m for the six months to end-September yesterday, ahead of the consensus forecast of £164m.

Chief executive Javed Ahmed said he expected a good performance for the full year which helped boost its share, but added a note of caution as European leaders were considering the possibility of Greece leaving the euro- zone.

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“Everybody’s concerned in terms of what’s happening in the eurozone at the moment – the biggest challenge for this economy right now, from our point of view, is going to be how to maintain growth,” Mr Ahmed said.

He added while sales of its industrial starches – used in the manufacture of cardboard packaging and paper – had so far escaped the economic downturn relatively unscathed, they were sensitive to the macroeconomy.

“Industrial starches... is something we would watch very closely because the paper and board industry can be cyclical, can mirror the economic downcycle,” he said, adding that this part of Tate’s business had been hit during the global financial crisis three years ago.

But Mr Ahmed said the defensive nature of the food and beverage industry which Tate supplies had stopped the company feeling the effects of a worsening economic environment as yet.