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Tate & Lyle hit by lower demand for sugar in coronavirus lockdowns

Unsurprisingly, sweeteners and ingredients for products sold in supermarkets have done better than those for out-of-home consumption

Tate & Lyle -
Closed cinemas have hit sweetener sales

Tate & Lyle PLC (LON:TATE) has seen lower demand for sweeteners and starches because of the coronavirus lockdowns in Europe and North America.

There was limited impact on trading in March from the Covid-19 pandemic and the food ingredients maker said results for the 12 months to 31 March will generally better than guidance when announced later this month.

Unsurprisingly, demand patterns in April have been significantly altered by measures put in place by governments to reduce the spread of the virus, the FTSE company said, but the financial impact has been lessened by various mitigating measures. 

Overall, demand was lower, though sales of food and drink ingredients and Sucralose sweetener both performed well in the past month, with the first part of the month seeing higher demand for supermarket products as people prepared for fewer trips out of the home.

Sales of bulk sweetener have fallen 26% due to reduced consumption out of the home from the closure of bars, cinemas, restaurants and sporting events.

Industrial starch volume was down 9% as demand for paper and packaging has been reduced following the closure of schools, offices and a general decline in economic activity, while sales of ethanol have been effected in the Commodities segment by sharply lower market prices.

Tate & Lyle said it had access to more than US$1bn of cash on hand and via its bank facility, plenty of covenant headroom on borrowings and no debt maturity until 2023.

Quick facts: Tate & Lyle

Price: 639 GBX

LSE:TATE
Market: LSE
Market Cap: £2.99 billion
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