City likes taste of Tate & Lyle as soft drinks hit sweet spot

Shares in Tate & Lyle, the company best-known for sugar but which no longer makes the white stuff, sprung up 7% earlier after the sweeteners maker upped its profit forecast.

Tate, which sold its sugar business six years ago and now focuses on making ingredients like glucose syrup and locust bean gum, was toasting strong demand for soft drinks in the United States and the weak pound.

Chief executive Javed Ahmed said those factors meant “we expect adjusted profit before tax in constant currency for the full year to be higher than we anticipated coming into the year”, and the shares rose accordingly.

They were already up 24% since the Brexit vote in June sent the pound plunging, and on Thursday rose 51p to 829p.

The company’s sales increased by 13% to £1.3 billion in the six months to October.

However, after stripping out the impact of weaker sterling, the rise was just 1%.

Tate argued that, since it generates less than 2% of its revenues in the UK, the European Union referendum result was “not expected to have a material near-term impact on our business”.