Ingredients innovator Tate & Lyle (TATE) has reiterated that year-to-March 2026 sales and underlying earnings are still expected to decline.
| Share price: 383p (-4%) | PE: 14.5x |
| Market cap: £1.8bn | Yield: 5.1% |
Struggling to deliver top-line revenue growth, the food producer said its Q3 sales performance was crimped by the persistence of ‘muted market demand’. Shares in the FTSE 250 food producer tumbled 4% to 383p on the downbeat news.
Organic growth challenged
Tate & Lyle develops ingredients and solutions which reduce sugar, calories and fat, add fibre and protein, and provide texture to food and drink. Its products are found in beverages, bakery products, snacks, sauces, and dressings.
For the third quarter to December 2025, group revenue rose 15% on a reported basis. This reflected a boost from Tate & Lyle’s 2024 acquisition of pectin-to-speciality gums provider CP Kelco.
However, on a pro forma basis, sales were 2% lower reflecting ‘continued muted market demand’.
For the nine months to December 2025, pro forma revenues fell 2% to £749 million and 5% to £475 million in the Americas and Europe, Middle East and Africa respectively.
Asia Pacific sales edged up 1% to £282 million, driven by higher volume.
Gloomy guidance held
Tate & Lyle left its FY26 guidance unchanged. It expects both revenue and EBITDA to fall by low‑single‑digit percentages versus last year’s pro forma comparatives.
Nevertheless, CEO Nick Hampton insisted Tate & Lyle has made good progress with actions to drive top-line growth and improve performance.
‘Looking further ahead, our leading positions in sweetening, mouthfeel and fortification put us in a strong position to benefit from consumer demand for healthier, more nutritious food and drink,’ he explained.
‘Delivering the benefits of the CP Kelco combination continues to progress well with run-rate cost synergies and revenue synergies tracking in line with our expectations,’ added Hampton.
‘Our 5-year $200 million productivity programme remains on-track with further savings delivered during the quarter.’
Shares in Tate & Lyle have shed over 50% of their value in a transformational past five years for the business.
Downgrades triggered by a recent demand slowdown have hurt sentiment, while a rumoured bid from US private equity group Advent came to nothing.
If management can return the business to tasty top-line growth, there should be brighter days ahead for long-suffering shareholders.
Keep in mind, Tate & Lyle has leading expertise in sweetening, ‘mouthfeel’ and fortification and partners with some of the biggest food and drink companies on the planet.
Read the press release here: https://www.tateandlyle.com/investors-hub
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