LONDON, May 28 (Reuters) - British sweeteners and starches manufacturer Tate & Lyle posted a 4 percent rise in full year profit to beat analyst expectations, helped by a one-off legal settlement, and said it expects to see further profit growth.
Tate & Lyle, whose brands include zero calorie sweetener Splenda, said on Thursday adjusted profit before tax for the year to end-March rose to 329 million pounds ($497 million) from 318 million pounds in the previous year.
A Reuters poll of 16 analysts showed Tate & Lyle was, on average, expected to report an adjusted pretax profit of 322.8 million pounds for the full year.
“Despite having entered the year facing a number of headwinds we have made progress,” Chief Executive Javed Ahmed said, citing challenges such as corn price volatility.
“Looking ahead, we will continue to build on the foundations we have laid and expect to deliver another year of profitable growth,” he said.
Overall sales rose 5 percent to 3.26 billion pounds, while adjusted operating profit rose 3 percent to 358 million pounds over the year. Profit was partially helped by a 4.5 million pound payment after the company won a case against London-based Whitefox Technologies over equipment used in its U.S. plants.
Tate & Lyle said it expects to see further growth in sales and profits in its speciality product division, whose products include artificial sweetener sucralose and food ingredients, due to stronger demand for healthier and convenience foods. Sales in the unit rose 7 percent to 947 million pounds over the year
The company’s bulk ingredient division’s sales rose 5 percent to 2.3 billion pounds on strong sales in countries such as Mexico, while adjusted operating profit rose 6 percent to 182 million pounds on the back of a strong performance from bulk sweeteners in the US and Europe.
It expects profits within the unit to be more evenly distributed between the first and second half compared to the prior year, with improved bulk sweetener unit margins in the U.S. to offset a slower start in volumes.
The company also bumped up its full year dividend by 5.2 percent to 26.2 pence.
Shares in Tate & Lyle, which have risen by almost 26 percent over the past year, closed at 849 pence on Wednesday, valuing the company at 3.94 billion pounds.