The FTSE 250 share fell more than 16%, to 615p, with the news that previously reported supply chain problems have lasted longer than expected.
A warning in July informed investors of a £10mln dent to profits as a result of America’s prolonged and severe winter, but today the company said that the disruption has persisted for longer than anticipated and now it expects to incur additional costs of £20mln, which takes total costs to £40mln for the first half.
Also, as inventories are rebuilt, Tate & Lyle expect further costs of around £10mln for the second half of the year.
It told investors that it now expects full year profits in the range of £230mln to £245mln, some 20% lower than prior predictions by City analysts.
While describing the first half performance as “extremely disappointing” Tate & Lyle chief executive Javed Ahmed also pointed to intense competition facing its SPLENDA sweetener brand as another challenge for the business.
Ahmed has now launched an immediate review into the group’s planning and supply chain processes.
“We remain firmly focused on taking the necessary actions to improve the group’s performance and to deliver on our strategy,” he said in a stock exchange statement.
Traders, meanwhile, have taken what they see as necessary action and as a result Tate & Lyle shares are down sharply.
“Shareholders have said enough is enough and dealt the shares the same punishment as they did in February by lopping another 17% from the share price,” said Mike van Dulken, head of research at Accendo Markets.
“This has taken the shares abruptly off 7-month highs, following an impressive 20% 7-week recovery.”
“Now trading new 3yr lows of 610p we have to wonder whether the downtrend resumes.”