(Reuters) - British ingredients supplier Tate & Lyle (L:TATE) lifted its full-year profit expectations on Thursday, citing a strong first half when growth in its bulk ingredients and speciality food ingredients businesses helped to drive earnings higher.
The company, which sells corn syrup and other ingredients to food and drink makers, said sales from continuing operations rose 6 percent to 1.4 billion pounds in the six months to Sept. 30, while adjusted profit at constant currencies was 13 percent higher at 169 million pounds.
In recent years, Tate has been putting more focus on speciality food ingredients, which carry higher margins than its much larger and more commoditised business of bulk ingredients.
Speciality ingredient sales rose 5 percent, as a focus by Tate towards large customers helped its North America business return to modest growth. The bulk ingredients business, which sells sweetener to soft drink makers, saw sales rise 6 percent.
"Turning to the outlook, we expect underlying adjusted profit before tax in constant currency for the full year to be modestly higher than we anticipated coming into the year driven by the strong first half performance," CEO Javed Ahmed said.
Ahead of the results, analysts had on an average expected full-year adjusted pretax profit of 286 million pounds, according to a company-compiled consensus. Tate reported profit of 271 million pounds for the year ended March 30.
Tate's shares have lost 6 percent in value this year amid uncertainty over the future trading relationship between the United States and Mexico, which could impact Tate's sales to Mexican soda makers.
The future of the North American Free Trade Agreement (NAFTA), a nearly 24-year-old trade pact between Canada, the United States and Mexico, is in doubt after the latest round of talks in Washington ended in acrimony last month.
Tate said Mexico in particular was a key export market for high fructose corn syrup and ongoing talks between the three countries were expected to stretch at least into the first quarter of 2018.