Another demanding year brought out the best in our people, who succeeded in delivering a major transformation of the business while also delivering a strong financial performance. In our 2022 Annual Report, Chair Gerry Murphy shares his thoughts on another challenging year.
It has been another challenging year with the global pandemic, disruption to global supply chains and rapidly increasing inflation all presenting hurdles to progress. We made big demands of our people again this year and it is to their huge credit that they not only delivered strong financial results but also the transformational event of separating the company into two standalone businesses, Tate & Lyle and Primient.
I know I speak for the whole Board in expressing my appreciation for our people’s achievements and the hard work it took to deliver them. I’d also like to thank Nick and his team for the clarity of leadership they provided, guided as ever by our purpose, which continued to be the glue that bound people together when we weren’t able to meet in person. Keeping people informed, connected and focused on what’s important is essential in challenging times, and Tate & Lyle’s communications to, and interactions with, colleagues during the year were second to none. I have no doubt that the humanity and empathy that emanated from leadership have been instrumental in galvanising the whole Company to deliver a landmark year for Tate & Lyle.
The business is now fully focused on creating healthier and tastier food and drink, a growing trend across the world that is here to stay.
CREATING TWO STRONGER BUSINESSES
A long time in the planning and preparation, the separation of the Group into the two standalone businesses of Tate & Lyle and Primient – announced in July 2021 and completed on 1 April 2022 – was a complex transaction that’s been well executed. It is ultimately about giving two companies with quite different characteristics the right ownership, capital structure and corporate objectives for their respective businesses. Primient is better controlled by a shareholder whose principal interest is to invest in a stable, cash-generative business; while Tate & Lyle is better served by investors looking for investment in growth. We are grateful for the support of our shareholders and are excited by the prospects for both companies.
A PROGRESSIVE DIVIDEND FROM OUR NEW BASE
As a result of the transaction, which was approved by shareholders at a general meeting on 30 September 2021, we returned approximately £500 million to ordinary shareholders on 16 May 2022 by way of a special dividend with an associated share consolidation. More details can be found on page 41. Looking ahead, as previously announced and consistent with the sale of a controlling stake in Primient, the Board has decided to reduce the dividend to reflect the smaller earnings base of the new Tate & Lyle. The pay-out ratio, excluding any Primient earnings, has been maintained and the dividend per share reduced by around 50% before the share consolidation. The Board intends to operate a progressive dividend policy from the new base. Reflecting this and the impact of the share consolidation, the Board is recommending a final dividend for the year ended 31 March 2022 of 12.8p (2021 – 22.0p) per share, bringing the full year dividend to 21.8p per share (2021 – 30.8p). This will be paid on 5 August 2022 to shareholders on the Register of Members on 1 July 2022.
Turning to this year’s results, what really stands out is the continued strong growth of our Food & Beverage Solutions business, which is the heart of the new Tate & Lyle. This reflects a sustained period of investment in capabilities and people, and in building a management team focused on growth. As well as delivering strong organic growth, I’m pleased with the steps we are taking to grow by acquisition. The integrations of the stevia and tapioca businesses in China and Thailand respectively, acquired in the 2021 financial year, are progressing well, and in March 2022 we announced the acquisition of Quantum Hi-Tech (Guangdong) Biological Co., Ltd, a leading prebiotic dietary fibre business in China.
These acquisitions are important as they expand our business and presence in the higher growth markets of Asia, and add new products to our portfolio to support our customer solutions offering.
LESSONS LEARNT FROM THE PANDEMIC
The pandemic has continued to pose immense challenges for our people and the communities where we operate. But it has also taught us some lessons that we are keen to retain in the years to come. As a Board, we are planning to operate more nimbly and flexibly. Like the rest of the company, we’ve learnt to use technology and virtual meetings to do routine tasks efficiently, with correspondingly less stress on people and their families, and less impact on the planet. We’ll get together physically slightly less often, but when we do, we will be more thoughtful about it because, through the pandemic, we all learnt from its absence the value of being together.
Human interaction can be suspended for a while, but it is ultimately irreplaceable. Keeping this front of mind will be central to Tate & Lyle in the future, as will the resilience and agility we all had to find in ourselves and with each other.