Sweet year for Tate

Building on the progress made in 2002, British sweeteners and starch group Tate & Lyle continues to move forward, reporting an 18 per cent rise in annual profit on Thursday for the year ended 31 March 2003.

The firm, which produces branded sugars and syrups, soft drink sweeteners and industrial starches, saw pre-tax profits rise to £187 million pounds (€263.3 million) for the year, while the underlying figure before exceptional items and goodwill amortisation rose 43 per cent to £228 million pounds above forecasts of £205-216 million.

But Sir David Lees, the company's chairman, warned that profit growth in 2003 will be primarily dependent on 'our ability to improve efficiency, to further reduceour cost base and to continue the development of the market for our value added and branded products.'​

Continuing activities for sweeteners and starches in Europe saw profit before exceptional items and interest rise by 23 per cent from £87 million to£107 million, mainly boosted by the activities of its cereal sweetener and starch business in Europe, Amylum.

The integration and cost reduction project delivered benefits exceeding £35 million, well ahead of the £20 million target. The benefits were primarily generated by lower manning levels, and purchasing andmanufacturing efficiencies but also helped by a rise in volumes for both sweeteners and starches.

Together with Amylum, Staley - Tate & Lyle's​ major starch and sweetener business in the US - also made a signficant contribution to the company's overall results.

Tate & Lyle reports that despite continuing difficult market conditions in Staley's cereal sweetener and starch business, growth was experienced in nearly all major product lines, particularly in higher value added food ingredients. Higher corn costs were covered by price increases, and cost reduction initiatives continue to enhance results.

Food ingredients generated improved results, particularly through working closely with customers on product development. Increased sales were made to export markets and benefits were seen from further integration with Amylum in Europe, especially from unifyingresearch and development.

Overall, net debt for the company was reduced by £168 million to £471 million. The chairman proposed a dividend of 18.3p per share, an increase of 2.8 per cent, to shareholders.