Sector movers: Food stocks binned after Tate & Lyle profit warning
Tate & Lyle was dampening the food sector in London on Friday after the sweeteners maker disappointed investors with its second profit warning in just four months.
Dairy Crest Group
620.50p
16:34 12/04/19
Food Producers & Processors
7,605.79
17:14 18/04/24
FTSE 250
19,450.67
17:14 18/04/24
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4,334.00
17:14 18/04/24
FTSE AIM All-Share
745.29
16:54 18/04/24
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4,290.02
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6,365.04
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Premier Foods
149.60p
16:40 18/04/24
Provexis
0.63p
10:39 18/04/24
Real Good Food
1.45p
17:30 19/12/23
Tate & Lyle
636.50p
16:35 18/04/24
Tate & Lyle said it now expects adjusted pre-tax profits for the year ending 31 March to be below previous guidance of £230m-245m.
The profit warning, which is the Splenda sucralose manufacturer's third in a year, was blamed on a weaker-than-expected performance in its bulk ingredients division as capacity constraints in the US transportation network led to lower sweetener volumes.
Meanwhile, weakened EU sugar prices affected bulk sweetener prices in Europe, and the company experienced a sharp deterioration in ethanol margins near the end of the period.
The stock was down 14% at 571.3p by 15:32 on Friday afternoon, nearing its 52-week low of 551.5p reached in December.
Mike van Dulken, the head of research at Accendo Markets, said: "Management obviously needs to do something to stir things up and improve current business trends if it wants to sweeten up investors and deliver a genuine share price reversal."
Other food producers were also out of favour in London, including Provexis, Devro, Real Good Food, Dairy Crest and Premier Foods.
News that Tesco was under investigation could also be hitting sentiment in the food sector on the back of concerns that the supermarket giant has mistreated suppliers. The Groceries Code Adjudicator is looking into whether the company has breached the Groceries Supply Code of Practice.
"The investigation will consider the existence and extent of practices which have resulted in delay in payments to suppliers," a statement said.
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