British sweetener maker Tate & Lyle forecast that its revenue would fall “slightly” from last year, it was reported today.
The food ingredients maker pointed to softer demand and persistent de-stocking by customers as factors in the fall.
The company, which is one of the world’s biggest producers of sweeteners, posted a 4% drop in revenue in its third quarter to end of December.
Its shares were also down 1.5%.
Lower Than Expected
The chief executive of Tate & Lyle Nick Hampton said in a statement that volume and revenue were lower than expected.
Hampton said it was due in part to “some customers phasing orders into the fourth quarter when new calendar year contracts, which included the pass-through of input cost deflation, came into effect.”
A rush to stock up on ingredients during the pandemic and higher prices due to inflation helped lift revenue.
However, volumes have fallen over the past year as customers use up stock.
Analysts also said there were signs of destocking headwinds fading, helping a return to volume-led growth and margin progression.
Revenue Expectations
The company supplies ingredients to Splenda, the sweetener in Diet Coke and other sugar-free drinks.
It retained its annual core profit growth forecast of 7% to 9% for the year to end of March.
Revenue is expected to be slightly lower than the £1.75 billion in the previous 12 months, reversing an earlier forecast for small improvement.
Tate & Lyle expect the renewal of customer contracts for 2024 to deliver a sequential improvement in volume growth as the year progresses.
The company reported in May a rise of 22% in full-year profit as higher prices helped mitigate cost inflation.
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