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(Sharecast News) - Tate & Lyle reported a robust first-half performance on Thursday, with adjusted revenue up 4% at £857m.
The FTSE 250 company said the food and beverage solutions (FBS) segment showed impressive growth, with a 5% rise in revenue to £707m.
However, the sucralose segment experienced a 5% decrease in revenue, reaching £89m on an adjusted basis.
EBITDA was ahead 7% at £178m, as FBS again led the way with a 10% increase, achieving £153m, while the sucralose segment saw a 14% decline to £28m in EBITDA.
The EBITDA margin improved by 70 basis points, reaching 20.8%.
Tate & Lyle's profit share from its Primient joint venture increased 32% to £17m.
Profit before tax jumped 16% year-on-year to £156m, and earnings per share saw a 19% increase to 30.1p.
The company generated £77m in free cash flow, a £15 million increase reflecting a cash conversion rate of 69%, up by 14 percentage points.
In terms of statutory performance, overall revenue was up 1%.
Operating profit for the period reached £123m, up 8%, while profit before tax surged 92% to £130m, and diluted earnings per share increased 90% to 25.4p.
Tate & Lyle said it had allocated an 11% higher budget for investment in innovation and solution selling.
The company reported an impressive four-percentage-point increase in solutions and new business wins by value, accounting for 22% of the pipeline.
Additionally, a significant investment was underway in expanding dietary fibre manufacturing capacity at a facility in Slovakia.
In response to the positive results, Tate & Lyle increased its interim dividend by 0.8p per share to 6.2p, reflecting one-third of the prior year's full-year dividend.
"Tate & Lyle delivered a robust financial performance in the first half despite challenging market conditions and made good progress on its growth-focused strategy," said chief executive officer Nick Hampton.
"Food and beverage solutions performed well with double-digit profit growth.
"Revenue was higher benefiting from a combination of our focus on mix and margin expansion as well as the recovery of inflation, partially offset by softer consumer demand and customer destocking."
In sucralose, Hampton said underlying customer demand remained steady, with the lower first-half performance reflecting the phasing of orders in the comparative period.
"To deliver our commitment to 'science, solutions, society', we increased investment in innovation and solution selling, announced a major expansion of growth capacity for dietary fibres, and expanded the use of renewable energy across our operations.
"These investments strengthen customer partnerships and drive long-term growth."
Nick Hampton said the strategic repositioning of Tate & Lyle to focus on speciality food and beverage solutions was enhancing the quality of the business and driving performance.
"Our strong ingredient portfolio and solutions capabilities in sweetening, mouthfeel and fortification mean we are well-placed to benefit from the long-term trends towards healthier, tastier and more sustainable food and drink."
At 0910 GMT, shares in Tate & Lyle were up 0.53% at 659p.
Reporting by Josh White for Sharecast.com.
