Tate and Lyle

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Tate & Lyle has completed its transformation to become a growth-focused speciality food and beverage ingredients business with the sale of its remaining interest in Primient for $350m (£279m).

The deal follows the group selling a controlling interest in Primient - a producer of food and industrial ingredients made from plant-based, renewable resources in North America and Latin America - to KPS Capital Partners in 2022.

This morning, Tate & Lyle announced it had reached an agreement to offload the remaining 49.7% in the business, which has been producing corn-derived products for use in carbonated beverages, confectionary products, packaging applications and animal feed in the US for more than 100 years.

CEO Nick Hampton said the sale represented “an important milestone” for the group.

“With this sale, the transformation of Tate & Lyle into a fully-focused speciality food and beverage solutions business is complete. We are now well-positioned to capture the significant growth opportunities ahead as we look to provide our customers with the solutions they need to meet growing consumer demand for healthier, tastier and more sustainable food and drink.”

The group intends to return the proceeds from the sale to shareholders via a buyback programme.

Tate & Lyle revealed the deal at the same time as reporting full-year results for the 12 months ended 31 March 2024.

Revenues fell 6% to £1.6bn on lower volumes from soft consumer demand and destocking by its customers, along with a prioritisation of margin.

Adjusted EBITDA increased 7% to £328m, with pre-tax profits up 48% to £226m.

“In challenging market conditions, it’s been another year of robust financial performance and strategic progress, with strong profit growth and productivity delivery, excellent cash generation, and further progress to transform the business,” Hampton said.

“The actions taken over the last six years have created a higher quality and more resilient business, with the agility to navigate the challenging economic environment and softer consumer demand we saw last year.”

Looking ahead, Tate added it expected to grow from its new base and anticipated good volume growth in the 2025 financial year as customer destocking came to an end and consumer confidence gradually improved.

However, revenues are forecast to be slightly lower in the year to 31 March 2025 as input cost inflation turns to deflation.

Shares in Tate & Lyle are up 2.4% to 693.5p this morning.

Morning update

Bakkavor reset plan pays off

Bakkavor has upgraded its profit expectations for this year as inflation continues to moderate and revenues improve.

Group like-for-like revenues increased by 3.2% to £543.3m in the 13 weeks to 30 March, driven mostly by a 4.1% uptick in the UK to £458.4m.

The prepared food manufacturer said volume also strengthened in the UK during the first quarter thanks to improving consumer confidence, successful innovation and excellent service.

Revenues in the US fell 5.8% to £57.7m in line with expectations as the group focused on accelerating profit improvement in the region.

Bakkavor added it had seen a “strong” profit performance in Q1 as a result of the return to volume growth in UK and continued focus on operational efficiency across the group.

It lifted adjusted operating profit forecasts for the year to a new range of £103m to £108m.

Bakkavor also revealed it had sold its bakery business in China in April to further simplify operations in the region, generating a £3.5m profit on disposal.

And the group acquired UK houmous supplier Moorish to complement its dips business. Bakkavor added there was “an attractive opportunity” to extend the £2m revenue brand into a broader range of Mediterranean products.

CEO Mike Edwards said: “Last year we executed a dynamic plan to reset the business and I am delighted that the momentum this has created across the group has underpinned our strong Q1 performance.

“All three regions are making excellent progress against the group’s strategic priorities of rebuilding margins and reducing leverage and, as a result, we are confident in delivering our increased guidance for 2024.”

Coca-Cola Europacific Partners appoints CFO

Coca-Cola Europacific Partners has appointed its group controller Ed Walker as CFO following the recent resignation of Nik Jhangiani earlier this month.

Walker has been with CCEP since its formation and prior to that held several roles in the Coca-Cola system, including CFO of the Coca-Cola bottler in Canada.

He will assume the role as CFO effective 1 July, with Jhangiani supporting the transition until August and CCEP’s half year results.

CEO Damian Gammell said: “Ed has fantastic and broad finance experience across the Coca-Cola system. I have worked with him for many years so I know he will continue to drive the business forward.

“He will be a great addition to the executive team and I wish him all the best in his new well-deserved role.”

Walker added: “I am very excited to be part of the next phase of our journey at CCEP in what is truly a great company.

“It continues to be a genuine privilege to work with so many talented and dedicated people across the business, and I look forward to collaborating with them closely to achieve our shared goals.”

Growing English wine demand benefits Gusbourne

English wine producer Gusbourne has narrowed losses as it registered a double-digit boost to revenues in 2023.

Revenues increased 13% to £7.1m in the year ended 31 December 2023, helping operating losses shorten from £2.1m to £1.4m.

UK wine sales rose 16.5% to £4.9m, with “strong” double-digit growth across the DTC and trade channels, in spite of the challenging macroeconomic environment in the second half.

Overseas sales were also up 7% to £1.5m.

CEO Jonathan White said: “2023 saw significant financial, operational and strategic progress for Gusbourne resulting in another year of double-digit revenue growth.

“Good performances were achieved across all three of the group’s distribution channels as we continue to expand our customer base both in the UK and overseas, reinforcing the Gusbourne brand as a leading light in the dynamic and fast-growing English fine wine market.

“Trading in 2024 has continued in line with our expectations. Whilst the macro-economic environment remains complex with subdued consumer confidence still causing hesitancy and cautiousness in many markets, consumer interest in Gusbourne and English wine generally continues to grow across the globe, strengthening our confidence in the group’s future prospects.”

Morning shares

The FTSE 100 is down 0.1% to 8,359.21pts so far today.

Bakkavor shares started off on a positive footing following the Q1 update, rising 0.8% to 134p.

Other risers included Glanbia, up 4.5% to €18.44, McBride, up 2.3% to 119.6p, and M&S, up 1.6% to 292.6p.

Fallers so far included Pets at Home, down 3.9% to 271.8p, C&C Group, down 2.5% to 170p, and Imperial Brands, down 1.5% to 1,931p.

Yesterday in the City

The FTSE 100 fell 0.6% to 8,369.07pts yesterday.

M&S ended the day 4.4% higher at 285.7p after its profits beat analyst expectations and its turnaround stepped up a gear.

Other fmcg risers included Glanbia, up 9.4% to €18.44, and Naked Wines, up another 5.7% to 60.2p.

Fallers included Pets at Home, Nichols and SSP Group, down 5.9% to 282.8p, 3.7% to 1,030p and 3.7% to 183p respectively.