(Alliance News) - Tate & Lyle PLC shares on Friday rose after the company reported quarterly revenue growth in its Food & Beverage Solutions and Sucralose businesses.
Shares were up 8.3% at 747.60 pence each on Friday in London, making it the best performer in the FTSE 250 in early trade.
The London-based food and beverage ingredients maker said trading in its third-quarter was in line with expectations.
Revenue for its Food & Beverage Solutions business grew 19% at constant currency in the three months to December 31.
Tate & Lyle put this down to higher volume, price mix, the benefit of acquisitions and excellent growth from new products. The performance of new products, specifically, remained "strong" in the quarter with 19% higher revenue.
Meanwhile, Sucralose revenue was up 8%, reflecting a good customer mix and solid demand.
For total continuing operations, revenue grew 18% in the third quarter, due to positive momentum from the first half.
Furthermore, the food and beverage ingredients maker said that it remained on course to complete the sale of a controlling stake in its Primary Products business and its subsidiaries, NewCo, to KPS Capital Partners LP at the end of March.
The sale was originally announced in July and will create two focused, standalone businesses, Tate & Lyle and NewCo. Tate & Lyle and KPS will each own 50% of NewCo with KPS having Board and operational control.
The company expects to receive gross cash proceeds of USD1.3 billion from the sale.
It intends to return GBP500 million to Tate & Lyle's shareholders through a special dividend and associated share consolidation, it said.
The company's outlook for the year remains unchanged.
"We enter 2022 in a strong position. Our new business pipeline in Food & Beverage Solutions is healthy and in both our businesses we have renewed 2022 calendar year customer contracts that offset inflation. In addition, the transaction we announced last year to create two focused businesses is progressing well and we remain on track for completion at the end of March," said Chief Executive Nick Hampton.
By Abby Amoakuh; abbyamoakuh@alliancenews.com
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Tate & Lyle (TATE)