Newspaper article The Evening Standard (London, England)

Tate & Lyle Climbs on Sweeter Profit Outlook

Newspaper article The Evening Standard (London, England)

Tate & Lyle Climbs on Sweeter Profit Outlook

Article excerpt


AT LAST! Some good news for shareholders from Tate & Lyle , up 15 1/2 pat 524p. The price this week climbed back above 500p for the first time sinceSeptember, and now we know why.

The sugar refiner and sweeteners maker says pre-tax profit for the four monthsto the end of January was marginally ahead of expectations, largely because ofa strong performance in America. Second-half pre-tax profits will be broadlysimilar to the [pounds sterling]115.2 million of the first six monthsthe first positive news from T& L for a long time.

It issued three profit warnings last year because of a slowdown in sales of itsartificial sweetener Splenda and higher corn prices. The share price virtuallyhalved, and the company lost its place in the Footsie 100.

Not everyone was impressed by today's news, however. ABN Amro has downgraded T&L from buy to hold, but tweaked its target from 490p to 510p. The broker says abetter trading performance in the US sweeteners business and fewer losses oncurrencies had been offset by weaker sugar trading and slightly lower Sucraloseprofitability.

Citigroup, meanwhile, repeated its hold on the shares and 470p target.

The rest of the market shrugged off the overnight setback for the Dow,concluding that US Federal Reserve chairman Ben Bernanke's gloomy commentsabout the plight of the US economy offered nothing new. The FTSE 100 posted arise of 17.7 to 5897.0 IMI ran into profit-taking after a strong run yesterday,the price drifting 3p to 413p. Speculators point out the industrial machinerygroup has dropped back from a peak of 637p last year, leaving it vulnerable totakeover.

Some are linking it with US conglomerate Honeywell; others say the shares havebeen inspired by Melrose's offer of 70p a share for FKI , up 3/4 p at 71 3/4 p. …

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