Speciality Food Ingredients sales up 4 percent (up 4 percent in constant currency) at £983 million with adjusted operating profit in line with the prior year (up 1 percent in constant currency) at £213 million:
- Continued strong growth in Asia and Latin America
- Acquisition of Biovelop, and in China, the formation of Tate & Lyle Howbetter and agreement to acquire Winway Biotechnology
- Bulk Ingredients adjusted operating profit 5 percent lower (4 percent lower in constant currency) at £172 million due to soft beverage season and unusually cold and prolonged winter in the US
- Adjusted profit before tax 2 percent lower (flat in constant currency) at £322 million
- Balance sheet remains strong with reduction in net debt of £126 million to £353 million (2013 – £479 million)
- Final dividend of 19.8p proposed making a total dividend of 27.6p (2013 – 26.2p) up 5.3 percent on prior year
- Successful deployment of upgraded IS/IT platform across Europe with US and Singapore on track for the summer
- Board approval of capital investment of £100 million over the next two years in Speciality Food Ingredients to expand capacity for existing and pipeline products
Javed Ahmed, chief executive, said: “During the year, we continued to make steady progress in executing our strategy. The delivery of solid profit growth in starch-based speciality ingredients and Food Systems, along with another year of strong growth in emerging markets, was offset by the impact of the cold spring in the US last year followed by the recent severe and prolonged winter, and an increasingly competitive market for SPLENDA® Sucralose. While we will continue to face sucralose pricing headwinds in the current year, our strong innovation pipeline, robust balance sheet and continued growth in emerging markets means we are well placed to deliver growth over the longer term.”
In Speciality Food Ingredients, we expect to deliver volume growth across all major product categories but a lower profit contribution from SPLENDA® Sucralose is expected to offset a good performance elsewhere in the division. Profits in this division are expected to be more evenly weighted between the first and second halves than the previous financial year.
In Bulk Ingredients, we now anticipate a slower start in the US in our first quarter associated with the prolonged and severe winter, combined with lower European sugar prices in our second half, to outweigh a better performance across other product categories.
Overall, and before the impact of currency movements, while we expect the Group’s performance for the full year to be slightly lower than the comparative period, we are well placed to deliver growth in the longer term.