Tate & Lyle, the FTSE 250 firm, has reported a rise in profits and free cash flow for the year to 31 March 2025. This comes as the company completes its integration of ingredients maker CP Kelco, acquired for $1.8bn, declaring its long-running transformation “complete.”
The sweetener producer saw a four per cent increase in earnings before interest, tax, depreciation and amortisation (EBITDA), while free cash flow rose to £190m, up £20m on last year, boasting a strong conversion rate of 82 per cent, as reported by City AM.
Including CP Kelco, Tate’s core earnings, EBITDA, rose five per cent, with the integration of the pectin and gums producer progressing ahead of schedule.
CP Kelco alone contributed a nine per cent rise in EBITDA with a margin expansion of one per cent.
Opportunities ahead
Chief executive Nick Hampton stated that the group is now “right at the centre of the future of food”, with a product portfolio aligned to key long-term trends such as healthier, tastier, and more sustainable food and drink.
“With significant opportunities ahead, we are confident in the growth potential of our business”, he added.
Innovation-led revenues increased by nine per cent, while new solution wins were up 21 per cent by value. Productivity benefits also exceeded targets, delivering $50m in cost efficiencies.
The group concluded the year with net debt EBITDA of 2.2 times, surpassing expectations, while returning £216m to shareholders through a buyback.
The full year dividend saw an increase of 3.7 per cent.
Today’s report echoes the guidance from Tate’s March trading update, which indicated a five per cent decrease in revenue, but stronger margins and profit growth as the Kelco deal started to yield results.
Analysts will now be focusing on how swiftly the merged business can fulfil its growth promise, with Tate confirming this morning that it remains confident in achieving synergy targets.
