Over the last couple of years Tate & Lyle has made efforts to shift focus from its original business model of sweeteners to bulk ingredients. The cooler-than-normal weather conditions experienced by the US in 2013 have led to reduced demand for sweet food types. This has affected Tate & Lyle’s figures due to the company’s high sales-weighting to the American market. The other issue the firm has encountered is the fact that its sales and profits are derived in US dollars, whereas its accounts are reported in sterling. A quick glance at the GBP/USD chart shows that the rate has moved from 1.4900 in early March up to the current levels around 1.6100.
Tate & Lyle has a solid-looking business plan, and the fundamentals have been strong for a long time, which explains why IG client accounts are currently 71% long. The current dividend yield is a respectable 3.55%, and the profits-to-earnings ratio is 12.96. As good as these figures might be, the shares have dropped by almost 15% in the last quarter, and there will be fears over the likely prospect of continuing weakness in the dollar.