The company, which produces sugars, syrups, soft drink sweeteners and industrial starches, saw pre-tax profits of �187m ($305.4m).

It is the second consecutive year that Tate & Lyle has posted a strong rise in profits, following a difficult period when it suffered from a slump in sugar prices, leading it to issue four profit warnings in the 12 months to February 2001.

It reacted by selling off loss-making US operations Domino Sugar and Western Sugar, along with eight smaller underperforming subsidiaries.

Low sugar prices

The group said its two major starch and sweetener businesses, Staley in the United States and Amylum in Europe, performed well although it suffered from low citric-acid prices and low sugar prices in the Czech Republic.

Finance director Simon Gifford said after this year's US and European sweetener pricing round, which had covered costs but not helped margins, that he was cautious on the outlook.

"Profit growth in the current year will depend on improving efficiency, cutting costs and driving sales of branded products," Mr Gifford said.

The group proposed a 2.8% rise in the full-year dividend payout to shareholders to 18.3p per share.

At 1000BST Tate & Lyle's shares were up 9p at 323p