MARKET REPORT: Tate & Lyle shoots to the top of the FTSE250

Tate & Lyle shot to the top of the FTSE250 after upgrading its profit forecasts. 

Shares in the group rose 9.5 per cent, or 65.8p, to 756p as it predicted that full-year profit growth from its core business making ingredients and flavourings will be ‘in the low double-digit percent range’. 

The upgrade came as the company posted a revenue rise of 18 per cent in the three months to the end of December, mostly as a result of strong sales in its food and beverage business which saw revenues jump 19 per cent. 

Tate also flagged strong demand for its new products as revenues in the division climbed 54 per cent during the quarter. 

Looking ahead, the group’s boss Nick Hampton flagged that several customer contracts had been renewed which helped the company offset inflation. 

He added that the firm was on track to complete the sale of a controlling stake in its North American Primary Products business, which makes items such as sweeteners and starches used in paper and packaging, by the end of March. The business, which was valued at around £1.2billion, will be controlled by private equity firm KPS Capital. 

Analysts greeted the update positively, with broker Jefferies saying the figures and outlook were ‘reassuring’. Meanwhile, Bank of America reiterated the stock as one of its ‘top picks’, saying Tate was becoming ‘a much better quality business’. 

The FTSE100 dropped 0.15 per cent, or 11.38 points, to 7661.02 while the FTSE250 slumped 0.72 per cent, or 159.04 points, to 22048.71. 

Fears over high inflation and the potential for aggressive interest rate hikes from central banks made traders jumpy, sparking volatility in US markets later in the trading day. The tech-heavy Nasdaq Composite fell almost 3 per cent in New York, while the Dow Jones Industrial Average dropped 1.4 per cent and the S&P 500 was almost 2 per cent down. 

Expectations of steeper interest rate hikes were supported by analysts at Goldman Sachs, who predicted seven increases from the Federal Reserve this year from five previously. 

South African coal miner Thungela Resources hit a record high, rising 9.9 per cent, or 52.2p, to 579.6p as surging demand for thermal coal helped to push it back into profit in 2021.

It was the opposite story at pharma giant GlaxoSmithKline, which dropped 1.3 per cent, or 21.6p, to 1619.4p after Brian McNamara, the head of its consumer healthcare division, pocketed around £1.8m after selling 55,000 shares in the group shortly after its full-year results. 

Mid-cap chemicals firm Victrex slipped 2 per cent, or 40p, to 2010p as it flagged that its performance in the automotive market had been hit by supply chain disruptions in the industry. 

Good Energy, a green electricity supplier, managed to fend off an attempt by its biggest investor to remove its chairman. 

Ecotricity, a rival which owns 25 per cent of Good Energy, had filed a motion to oust William Whitehorn as chairman as well as a second proposal to stop the company from selling some of its assets without shareholder approval. 

However, both proposals were rejected by investors at a meeting yesterday but the shares fell 2.8 per cent, or 7.5p, to 257.5p. 

Insurance group Lancashire Holdings saw its premiums surge 50 per cent to a record £902m last year as it expanded. However, it suffered a pre-tax loss of £42m from a £4.3m profit in 2020 as a series of natural disasters including hurricanes, winter storms and tornados in the US, as well as flooding in Europe, caused a rise in claims. Shares rose 1.6 per cent, or 8.5p, to 548p.