sweeteners and starches maker Tate & Lyle yesterday said the cost of re-opening a factory and tough trading in Europe had reduced earnings growth in its first half.
The group posted adjusted pretax profit of £179m, up 2 per cent, stifled by the cost of restarting a second plant for its zero-calorie sucralose sweetener Splenda in Alabama, United States, earlier this year.
First-half sales rose 7 per cent to £1.63bn, despite uncertainty around the wider economy and corn quality and pricing.
Chief Executive Javed Ahmed said the group made progress against the backdrop of a strong first half last year, softer market conditions in Europe and the steep change in fixed costs associated with the restart of its Alabama facility.
“We continue to do fine in Europe but we just haven’t seen a lot of growth,” he said.
Tate & Lyle said it continued to expect to make progress this financial year.
The company dusted down its McIntoch sucralose plant in Alabama earlier this year as its sole plant in Singapore was struggling to cope with demand.
Shares in the group, which had a strong run into the results, rising 19 per cent since September 10, fell in early trade.
Graham Jones, analyst at Panmure Gordon, said the results were pretty much in line with his expectations.
“The company is very healthy, has high margins and its shares have been strong in the run up to the results, so I wouldn’t read too much into a slight decrease in its stock,” he said.