In line with our usual practice, Tate & Lyle PLC issues the following update for the year ended 31 March 2011 ahead of the announcement of the full year results on 27 May 2011.
OPERATING PERFORMANCE – CONTINUING OPERATIONS
The Group continued its encouraging performance through the year with operating performance similar to market expectations, except that corn price rises drove a further increase in co-product income in the final quarter.
We have continued to deliver global volume growth in Speciality Food Ingredients across all the major product categories through the year. Within Bulk Ingredients, sweetener volumes remained strong and margins improved in industrial starches, particularly in Europe where the market has tightened following a poor potato harvest. The higher co-product income primarily benefits the Bulk Ingredients division.
SALE OF FORT DODGE
On 30 March 2011 we sold our ethanol facility at Fort Dodge, Iowa to Cargill for a cash consideration of US$57 million (£36 million). Following the impairment taken in the year to 31 March 2010, which took the book value of the facility to £17 million, and after additional costs of approximately £3 million, the sale leads to an accounting gain on disposal of around £16 million. Additionally, £20 million of the £25 million exceptional charge booked in the first half of the current financial year in respect of long term contracts relating to the facility will be reversed. Thus we expect an exceptional credit of £36 million in the second half of the current financial year and an exceptional credit for the full year of £11 million. The sale crystallises tax losses of around £65 million, the bulk of which we expect to recover in cash over the coming two financial years; the reported tax rate will not change as a result of the sale as a deferred tax asset was booked at the time of the impairment charge.
As discussed at the half year results and again at the Interim Management Statement in February, working capital demands on the business have been increased by our decision to keep our US silos full in response to the anticipated tight supply situation running up to the next harvest. In February, we expected that net debt at 31 March 2011 would be at a similar level to that reported at 30 September 2010. With the sale of Fort Dodge, accordingly we now expect the year end net debt to be lower.
A conference call will be held today at 8.00am GMT, hosted by Javed Ahmed, Chief Executive and Tim Lodge, Chief Financial Officer. Participants are requested to dial in at least 5 minutes before the commencement of the call. Dial in details are as follows:
Participant dial in number: +44 (0) 1452 555 566
Conference ID: 54273374
A replay of this call will be available from two hours after the end of the live call until
6 April 2011.
Replay dial in number: +44 (0) 1452 55 00 00
Replay passcode: 54273374#
For more information contact Tate & Lyle PLC:
Chris McLeish, Group VP, Investor and Media Relations
Tel: +44 (0) 20 7977 6211 or Mobile: +44 (0) 7919 102 730
Andrew Lorenz or Nick Hasell (Financial Dynamics), Media Relations
Tel: +44 (0) 20 7269 7291