Admittedly, part of its profit came as a result of those sell-offs. T&L sold its European sugar-refining operation (including its beleaguered East London plant) to US firm American Sugar last year. In total, sales of businesses brought in £316m of cash, which helped to push its net debt down to £464m, from to £814m the previous year.
There’s no question that part of the turnaround has come off the back of some difficult decisions made by new(ish – he started the job in 2009) T&L CEO Javed Ahmed. So what does a sugar-free sugar company actually do? Ahmed has spent the last couple of years moving the company’s focus away from commodities like sugar to concentrate instead on speciality food ingredients and ‘value-added products’ like Splenda, its low-calorie sweetener which made up just over half its profits.
The other big profit driver was corn sweetener, which might sound deeply unglamorous, but there are dozens of soft drinks you can’t make without it – which means it accounted for a quarter of the company’s profits last year. Although rising corn prices have forced it to hike up its prices to food and drinks manufacturers by 15-20% for 2011. Ouch.
Still, it’s an impressive turnaround for a company which, just two years ago, was issuing a string of profit warnings. Although Ahmed has warned it’s not out of the hot water (or boiling molasses) just yet. Apparently, it’s expecting more modest growth next year as higher commodity prices take their toll. Guess it’s important to take the bitter with the sweet…