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Shares in sugar firm Tate & Lyle (T&L) fell by eight per cent in the first hour of trading despite the firm's strong performance in the last year.

Its preliminary results for the year ending March 31st showed pre-tax profits had risen by 14 per cent to £4.07 million.

But having risen by 20 per cent over the last year T&L shares continued to slide after a 16 per cent fall in January caused by profit warnings.

Analysts say gloomy warnings for the coming year about the company's prospects are behind today's poor start for the company's performance on the London Stock Exchange.

It said a repeat of the past year's "unusually high" profits from ethanol would not take place and added its European sweetening operation was dependent on EU's proposals for stabilising the market.

The company's net debt grew by £34 million to £900 million in the past year, but its share dividend was increased by 7.5 per cent to 21.5 pence.

T&L chairman Sir David Lees said: "Over the last few years, the group has embarked on a strategy of building a stronger value added business from a low-cost commodity base while, at the same time, reducing the impact of our exposure to volatile markets.

"Our strategy continues to be successful and, whilst the coming year will essentially be one of transition, it has provided the group with a stronger base from which to take advantage of the growth opportunities that lie ahead."