Loss-making Tate pushes US sell-off

Tate & Lyle, the world's biggest sugar group, yesterday announced a £228m pre-tax annual loss but sweetened the pill for investors by saying it was making progress with the sale of its troubled US operations.

Tate also put weight into a deflated share price after four profit warnings by expressing optimism about the future of product prices.

Chairman Sir David Lees admitted the group had been through a "difficult" year and accepted that energy prices would continue to put pressure on costs.

However, he said gains in starch and cereal sweetener prices in Europe and North America plus the planned exit from the US "leads us to view the current year with greater confidence".

Tate has been forced to write down £345m in the 53 weeks to March 31 ahead of the expected sale of its loss-making American businesses Western and Domino.

The British group said it had tied up a firm deal to sell Western Sugar to the Rocky Mountain Sugar Growers Co-operative for $96m (£68m).

It is also in advanced negotiations to dispose of its Domino subsidiary but declined to give details of the potential buyer. "Certainly we would not want this [sales talk] to go on for too much longer," said chief executive Larry Pillard.

Before exceptional items, Tate's pre-tax profits fell from £209m to £113m - in line with analysts' expectations - while sales remained flat at £4.1bn. A final dividend of 12.3p keeps the full-year payment level with last year's 17.8p.

The overall group problems were mainly attributed to difficult market conditions in the US where profit margins on cereal sweeteners and starches have been squeezed. The pain was increased by energy costs rising by £45m year on year.

Good progress had been made in disposing of a number of smaller businesses such as Bundaberg. Tate shares ended the day up 15p at 274p.