Key Takeaways
Tate & Lyle PLC reported a 3% fall in annual adjusted core profit as it continues to evaluate a £2.74 billion ($3.68 billion) takeover offer from U.S. rival Ingredion Inc.
"Our financial performance has been disappointing," Chief Executive Officer Nick Hampton said on Thursday, citing softer market demand and a complex geopolitical landscape. The results come just a week after the London-listed ingredients maker revealed the all-cash approach from Ingredion.
For the fiscal year ended March 31, the company's adjusted core profit fell to £415 million ($557 million), with revenue declining 3% to £2.01 billion. Adjusted pretax profit fell 5% to £238 million, slightly ahead of the £234 million consensus compiled by the company.
The potential deal with Ingredion, a major U.S. producer of sweeteners and starches, would value Tate & Lyle at 615 pence per share. Shares in Tate & Lyle, which makes Splenda sweetener, fell 1.1% to 517 pence in early London trading following the earnings report. The stock had jumped significantly when the takeover talks were first announced last week.
Looking ahead, Tate & Lyle forecast a "modest" rate of sales growth for fiscal 2027, with core profit expected to be flat year-over-year. This outlook is slightly below the £419 million adjusted core profit that analysts had, on average, been anticipating.
The 165-year-old British firm is navigating weaker consumer demand for processed foods while also positioning itself to benefit from the rise of weight-loss drugs, which is shifting consumer habits toward lower-sugar and higher-protein products. The company said it is taking action to mitigate cost inflation through pricing and operational discipline.
The discussions with Ingredion represent the latest in a series of potential U.S. takeovers of British companies. Under U.K. takeover rules, Ingredion has until June 11 to make a firm offer or walk away.
This article is for informational purposes only and does not constitute investment advice.
