Tate & Lyle Share News (TATE)

- Solid start to Q4 trading- Price falls to deepen for its Splenda sucralose sweetener product - Full-year expected to be broadly in line with last yearFood and sweetener company Tate & Lyle said it made a solid start to the final quarter, despite weakness in Splenda sucralose pricing, and expected full-year profits for the year ending on March 31st 2014 to broadly match the previous year. "We are pleased with the progress we are making and particularly the underlying strength of our speciality food ingredient (SFI) business. Splenda sucralose aside, in the 2014 financial year we expect to see profit growth in all product categories across SFI," it said in a company statement.Price declines in Splenda sucralose were expected to accelerate in the final quarter and the company now expected prices in the 2015 financial year to be around 15% lower than this financial year. That came as a result of the renewal of a number of contracts - some of which were multi-year - during the period against a backdrop of heightened competition driven, the firm believed, by an overhang of unsold Chinese sucralose. However, "We continue to see good long-term opportunities for growth in the market for Splenda sucralose leading to operational efficiencies as we continue to fill our McIntosh facility," it said.In a separate statement the group said it has signed a 30-year agreement with McNeil Nutritionals to develop and grow the global market for sucralose and its Splenda brand. Net debt at December 31st 2013 was £253m, down from £336m at September 30th.Shares in Tate fell 138.5p to 648p at 09:45 in London as analysts said downgrades to earnings forecasts were likely on the back of the Splenda weakness.As regards cash flows, Tate&Lyle added that based on current corn prices and exchange rates, they expected the payment for new crop corn held in its silos to result in a net outflow in the final quarter.Re-rating story takes a hitBroker Jefferies said in a note: "We now think earnings growth in FY15 is likely to be only modestly positive at best.""A weaker third quarter, lower unit margins in US sweeteners going forward and a collapse in Sucralose pricing all made for grim reading." Credit Suisse chipped in. The latter was particularly significant given that, in their opinion "the only real growth business is 40% of the profits, and until that % increases the shares are unlikely to rerate". In reaction to all of the above the Swiss broker lowered its profit before tax (PBT) estimate for the current fiscal year to £309m, from £337m, pointing out that they were already comfortably below consensus. CJ/AB