Tate & Lyle shares rise as company exceeds cost synergy targets

Investing.com -- Tate & Lyle PLC (LON:TATE) shares rose 4.3% on Thursday after the food ingredients company reported first-half results that met lowered expectations while announcing it would exceed its cost synergy targets from the CP Kelco acquisition.

For the six months ended September 30, 2025, Tate & Lyle reported revenue of £1.02 billion, down 3% YoY in constant currency, reflecting softer market demand, particularly in North America. Adjusted EBITDA fell 6% to £215 million, with margins contracting 80 basis points to 21.0%. Adjusted earnings per share came in at 21.3p.

The company generated strong free cash flow of £98 million, representing a cash conversion of 71%, though lower than the 94% achieved in the same period last year. Net debt stood at £952 million, down slightly from £961 million at March 31, 2025, with a net debt to EBITDA ratio of 2.3 times.

"Over the last six months we have made strong progress driving the benefits of the CP Kelco combination and setting the business up for future growth," said Nick Hampton, Chief Executive. "Despite this encouraging progress, performance in the first six months of the year has been disappointing, impacted by softer than expected market demand, notably in North America."

The company now expects to exceed its target of $50 million in run-rate cost synergies from the CP Kelco acquisition by the end of fiscal 2027. It has also increased its five-year productivity savings target by $50 million to $200 million by March 2028.

Tate & Lyle maintained its full-year outlook, continuing to expect revenue and EBITDA to decline by low-single digit percentages compared to the previous year. The company declared an interim dividend of 6.6p per share, up 0.2p from last year.

The company said it would consider initiating a share buyback program when its net debt to EBITDA leverage falls below 2.0 times, reinforcing its commitment to shareholder returns alongside its progressive dividend policy.