November 13/London/Business Monitor International Ltd. (BMI) -- British ingredients producer Tate & Lyle has posted strong growth in profits for the first half of its fiscal year thanks to stronger margins and higher corn prices. For the six months to September, Tate & Lyle's adjusted operating profits increased by 13% in constant currency terms, with the firm aided by shifting the manufacture of its core sucralose brand to a single plant in low-cost Singapore. However, despite the favorable operating environment, sales for the group were flat on a constant currency basis, indicating that restoring top-line growth momentum may be harder than increasing profitability.
Tate & Lyle has generally been seen by investors as a boring commodity play, which does well when demand for its key commodities such as sugar and starch is booming, but suffers when demand wanes. The firm has made moves to alter this perception -- notably by focusing on value-added ingredients and as part of this process it has also been selling off its sugar refining operations. In July 2010, it agreed to sell a large chunk of its sugar business to American Sugar Refining for 211 million pounds.