Tate & Lyle PLC mulls split as it emerges profitably from pandemic

 PLC () reported a 1% rise in full-year revenue and a 6% improvement in pre-tax profits, to £2.8bn and £335mln respectively.

The sweeteners firm, in a statement, said it grew profits, strengthened its financial position and increased the dividend despite the challenges created by the Coronavirus pandemic. It noted that the impact of the pandemic started to ease through the second half of its financial year.  

It also noted a changing market amidst the pandemic as its observed accelerating consumer demand for healthier food and drink.

Talking strategy, the company said it is mulling a separation of its ‘primary products’ and its food and beverage products businesses.

“We are exploring the potential to separate our Food & Beverage Solutions and Primary Products businesses through the sale of a controlling stake in Primary Products to a long-term financial partner,” said chief executive Nick Hampton.

“This transaction would create two businesses, each able to focus on its own strategic and capital allocation priorities – focused on Food & Beverage Solutions, and Primary Products in partnership with a new investor with a long-term commitment to growing the business.”

Financials

’s primary products saw a 5% boost to profit to £158mln, meanwhile profits at sweeteners and starches were down 13%, whilst commodities trading saw a 98% increase in profit.

Profits on sucralose were down 9% due to price pressures and higher production costs.

Meanwhile, the food and beverage business saw profits up 12% to £177mln with the company highlighting a 3% increase in volumes, whilst revenue increased by 6%.

Group free cash flow was marked at £250mln, up around £3mln. Net debt stood at £417mln, down £34mln.

The company is to pay a 22p per share final dividend, marking a 5.8% improvement on last year – with the total dividend for the year up 4.1% at 30.8p.