Not so Sweet for T&L After £500m Blow
By Tamsin Brown, Daily Mail, London
Jan. 24–More than £500m was wiped from the market value of Tate & Lyle as shares tumbled in the wake of a shock profits warning.
The jolt came because fizzy drinks makers in the US aren’t buying zero calorie sweetener Splenda in the quantities expected.
While it is used in a version of Diet Coke and in Pepsi One, firms are still only ordering relatively small volumes — and it is yet to become a staple of one of the big selling American brands.
Chief executive Iain Ferguson admitted: “We haven’t made the progress we expected to in carbonated drinks.”
The Splenda woes and the weak dollar mean Tate’s profits will now be “modestly” below forecasts.
Analysts cut their earnings estimates for this year and next.
Ferguson says he is confident in the long term future of the Splenda. He needs to be, with the group ramping up its production.
The company has already extended its plant in Alabama and a new factory is being built in Singapore. The shares closed down 112p, or 16pc at 608p each, valuing the firm at £3.5bn.
—–
To see more of the Daily Mail and the Financial Mail on Sunday, or to subscribe to the newspaper, go to http://www.thisismoney.com.
Copyright (c) 2007, Daily Mail, London
Distributed by McClatchy-Tribune Business News.
For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.
TATE, TATYY,