(Sharecast News) - Tate & Lyle reported weaker first-half results as softer market demand, particularly in North America, weighed on sales and earnings, but its shares were rising as it reported strong progress integrating CP Kelco and accelerating actions to drive growth and efficiency across the enlarged group.
Group adjusted revenue fell 3% year on year to £1.02bn in the six months ended 30 September, while adjusted EBITDA declined 6% to £215m, reflecting lower volumes, growth-related investments, and the timing of cost synergies weighted toward the second half.

Adjusted profit before tax dropped 10% to £126m and adjusted earnings per share stood at 21.3p.

Free cash flow was £98m, compared with £127m a year earlier, with cash conversion of 71%.

Statutory revenue rose 32% to £1.02bn following the consolidation of CP Kelco, while operating profit decreased 5% to £98m and diluted earnings per share from continuing operations fell 28% to 12.5p.

The interim dividend was lifted by 0.2p to 6.6p per share, in line with policy.

"Over the last six months we have made strong progress driving the benefits of the CP Kelco combination and setting the business up for future growth," said chief executive Nick Hampton.

"Customer engagement is high, we are tracking ahead of our planned revenue and cost synergies, and the fundamental growth drivers of our business remain strong."

He acknowledged that "performance in the first six months of the year has been disappointing, impacted by softer than expected market demand, notably in North America," and said the company was "accelerating a series of targeted actions to drive top-line growth and improve performance".

Tate & Lyle said the integration of CP Kelco, acquired earlier in the year, was proceeding ahead of plan, with cost synergies expected to exceed the $50m target by the 2027 financial year.

Run-rate synergies of $30m had already been achieved, with the group still expecting up to $70m of annual revenue synergies by 2029.

Productivity savings over the five years to March 2028 had been increased by $50m to $200m.

The company said its cross-selling pipeline had more than doubled in value since the first quarter, supported by strong demand for formulation expertise in sweetening, mouthfeel, and fortification.

It said it was investing in customer segmentation, sensory science, digital tools, and applications development to support new business wins.

Free cash flow remained strong, helping to reduce net debt slightly to £952m and lower leverage to 2.3 times EBITDA.

Hampton said the company remained focused on "execution, delivering for our customers and growth," adding that the combination of Tate & Lyle and CP Kelco "provides a unique platform to meet growing consumer demand for healthier, more nutritious and sustainable food and drink".

The group reiterated its full-year guidance for the period ending 31 March, expecting revenue and EBITDA to decline by a low single-digit percentage at constant currency compared with pro forma comparatives.

At 0956 GMT, shares in Tate & Lyle were up 6.59% at 402.91p.

Reporting by Josh White for Sharecast.com.

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