Tate & Lyle PLC (LSE:TATE) shares sank over 8% to 579.34p as the ingredients maker warned that profits for the year would be at the lower end of its previous guidance, amid pricing pressure and the absence of an anticipated surge in demand.
The FTSE 250-listed group said revenue for the year to end-March 2025 is expected to fall by a mid-single digit percent compared to last year, and underlying profit (EBITDA) growth to be "towards the lower end of our guidance range of 4% to 7%".
In the third quarter, ending 31 December, volume from its Food & Beverage Solutions division rose 4% but revenue fell 4%, which it said primarily reflected its process of passing through lower input costs to customers.
Findings from the usual annual contract renewal process are that market demand remains "broadly stable" but the group has "not yet seen the acceleration in demand we expected in the second half of the 2025 financial year", resulting in "some pricing pressure".
The Sucralose business performed "strongly", it said, thanks to customer orders though these are expected to partly unwind in the final quarter.
T&L hailed cost savings during the quarter, with "good progress" against a five-year US$150 million productivity target.
CP Kelco, the US acquisition completed in November, performed "in line" with expectations, delivering strong volume growth over the 2024 calendar year and delivering the anticipated progress on margin recovery.
Progress on the integration so far "reinforces our confidence in delivering the targeted run-rate cost synergies of US$50 million by the end of the 2027 financial year, as well as the identified revenue synergies over the medium term", the group said.