The spread of the aflatoxin fungus, according to a report in the Financial Times, will lead to higher corn costs in coming months, which will have the knock-on effect of reducing operating profit by around £7m for the full year.
“We have taken a number of steps to mitigate the impact of aflatoxin, a fungus caused by the unusually hot and dry conditions last summer,” the company said.
“The impact of aflatoxin from the new harvest corn was felt particularly in the third quarter while we implemented a number of actions including adjustments to our corn sourcing programme. We expect a further small increase in net corn costs in the final quarter of the financial year, and estimate the impact of aflatoxin will be to reduce operating profit by around £7m for the full year.”
In January, shares in Tate & Lyle hit a five-year high of 812p as analysts argued that its transformation into a specialist ingredients maker had not been fully reflected in the price.
The company, which now has a market capitalisation of about £3.7bn, has spent recent years changing itself from what was in effect a commodity sugar company into a producer of speciality ingredients sold to the food and drink industry.
