Ingredients maker Tate & Lyle has reported an 82 per cent slump in annual profits and warned of a year of change ahead after the market for its main sweetener product turned sour.
Earnings for its Splenda sucralose business fell 73 per cent to £16 million in the year to the end of the March, driving the wider group's adjusted pre-tax profits down by 30 per cent to £224m - in line with an earlier profit warning.
On a statutory basis, including one-off items such as the cost of shutting down its Splenda plant in Singapore, profits fell by 82 per cent to £51m.
Chief executive Javed Ahmed said the sweetener had faced an "extremely competitive market" even though demand for the product remained strong, driven by consumers' appetites for reduced calorie food and drink.
That was because a glut in products over the last couple of years "had led to supply being well in excess of demand".
Mr Ahmed said Tate's performance was also held back by supply chain issues in the first half of the financial year and, in the second half, volatility and lower pricing in some of the markets for its bulk ingredients.
He said: "It has been a very challenging year for the group, but with the necessary actions underway we are firmly focused on improving our performance.
"The year ahead will be one of structural change."
Adjusted pre-tax profits for the year to the end of next March are expected to be in line with the 2015 result amid a shake-up at the group.
The group recorded a £113m impairment charge, largely against property, plant and equipment assets, after the decision last month to shut its sucralose factory in Singapore and consolidate production at its site in Alabama.
The phased closure over the next 12 months had been announced in April.
Tate said the Singapore plant "will not be cost competitive going forward".
Adjusted annual sales at the group were 14 per cent lower at £2.69 billion, while Tate confirmed its final dividend would be flat at 19.8p, leaving the full dividend 1.4 per cent higher at 28p.
Peter Ward, dealer at London Capital Group, said: "Having issued three profit warnings this year, full year results are understandably lacking in sweetness with pre-tax profits falling by around 80 per cent for the full year."
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