Annual Results In Line, but Uninspiring Outlook

Sweetener and starch manufacturer Tate & Lyle reported in-line annual results to the end of March 2016, showing a 1% increase in constant-currency adjusted pretax profit, consistent with management's guidance for a similar level to the previous year. We are increasing our estimates for exceptional reasons: higher-than-expected proceeds from the sale of assets, driving debt levels down, and higher expected foreign exchange benefits from this year onwards, given Sterling's weakness in recent months. As a result, our fair value estimate increases 10% to GBX 550, but we are retaining our no-moat rating and its stable trend.