The company, which sells sweeteners including corn syrup to food and soft drink makers, had warned last month that a cold spring in the United States had hurt sales.
Tate reiterated on Thursday that it expects to deliver profitable growth for the full-year to March 31 driven by higher sales and profit in its specialty food ingredient business, which includes zero-calorie sweeteners like Splenda.
Results for the continuing operations are adjusted to exclude exceptional items, post-retirement benefit interest and amortisation of intangible assets acquired through business combinations. Except where specifically stated to the contrary, this commentary relates only to the adjusted results for the continuing operations. A reconciliation of statutory and adjusted information is included at Note 15.
While the overall results for the Group were held back by a soft beverage season in the US which reduced demand for sweeteners across both divisions, Tate & Lyle performed solidly in the first half with good sales growth in Speciality Food Ingredients supported by particularly strong volume growth in emerging markets.
Sales increased by 7% (3% in constant currency) to £1,737 million (2012 – £1,631 million). Adjusted operating profit was 4% lower (6% in constant currency) at £187 million (2012 – £194 million) with adjusted profit before tax down 3% (5% in constant currency) at £173 million (2012 – £178 million). On a statutory basis, profit before tax decreased by £10 million to £158 million (2012 – £168 million).
Net debt at 30 September 2013 decreased by £143 million to £336 million (31 March 2013 – £479 million),driven by the strong free cash flow generated during the period. Our average four quarter cash conversion cycle for the period ended 30 September 2013 increased by 1 day to 43 days (31 March 2013 – 42 days),primarily as a result of our prudent policy of holding high corn inventories for security of supply during mostof the previous harvest year. Within this, the cash conversion cycle for the first half of this financial year at 39 days was seven days shorter than the second half of the previous financial year.
