Tate & Lyle says year profit seen below expectations

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"It is likely that sales and profits of Splenda sucralose will only modestly exceed the prior year due to a slower than anticipated acceleration of uptake from major customers," Tate & Lyle, which makes branded sugars, sweeteners and industry starches, said in a statement.

Sucralose, which sells under the brand name Splenda, accounts for around one quarter of group profits.

Shares in Tate and Lyle were seen opening as much as 70 pence, or nearly 10 percent, below Monday's closing price of 720p, dealers said

The company said sucralose volumes to the U.S. carbonated soft drink sector had not met its expectations and additional resources have been deployed to address the problem.

"Given this and the impact on overseas earnings of the weakness in the U.S. dollar, group profit before tax, exceptional items and amortisation for the year to March 31 is now likely to be modestly below current market expectations, albeit well ahead of the previous year," it said.

The firm, which had aimed to boost profits from its value added products by 30 percent in the current financial year after a 22 percent gain in the previous year, said the growth of value added profits would be significantly below the target due to the lower contribution from sucralose.

Tate's strategy has been to move towards value added products and away from commodity type businesses as it reacts to European Union sugar price cuts, which have hit its sugar operations and its European sweeteners due to cheaper competing sugar.

Value added products now make up nearly half of the group's portfolio.

The company said its North American sweeteners and starches business, which accounts for nearly half of group profits, continued to perform strongly, while second half results from the European division were likely to be similar to the same period of the previous year.