SHARES in sugar and sweeteners group Tate & Lyle closed 24p lower at 460p yesterday. They had earlier slid 34p on a warning that current year results would fall substantially below the previous year before exceptional items.
The company also issued a profit warning at its annual meeting in February which lowered analysts' profit projections and hit the share price. This has fallen over the past month or so from a five-year high of 580p.
Unveiling first-half underlying profits of #76.5m before tax, down from #113.6m before exceptionals (a one-off charge of #83.2m) for the same time last year, chief executive Larry Pillard said: ''In the second half difficult trading conditions, especially in our US sugar operations, will adversely affect profits.''
The interim dividend is unchanged at 5.3p.
The company highlighted a number of reasons behind the forecast profit decline, but the chief among them was lower margins from its US sugar operations.
Tate also had to swallow the bitter pill in its first half when a beet disease hit its Western Sugar plant in the US, depressing volumes and raising production costs.
It is expected to cost the company $25m (#15m) for the whole year instead of the $20m (#12m) expected earlier.
The results, which were at the lower end of analysts expectations, combined with a poor forecast, overshadowed the positive news of the acquisition of a German food ingredients unit which will enhance earnings next year.
Tate is paying $219m (#132m) for the unit from Haarmann & Reimer (H&R), part of the Bayer group.
H&R produces 20% of the world's citric acid, crucial to a variety of foods and drinks.
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