Tate & Lyle has said it is mulling a split as it increased its final dividend on the back of annual profit growth.
However, shares in the firm dipped in early trading as it provided a cautious earnings outlook due to pressures on commodity prices.
The sweetener giant, which sold off its sugar business in 2010, revealed that adjusted pre-tax profits increased by 6% to £335 million for the year to March.
Meanwhile, it saw 1% growth in adjusted revenues to £2.8 billion for the year as it reported increased demand for healthier food and drink products to be consumed at home.
The group’s food and beverage solutions arm reported a 6% revenue rise as it saw the impact of the pandemic start to ease during the second half of the year.
It told investors on Thursday that it intends to focus on this arm of the business and is therefore considering spinning off its Primary Products division, which sells nutritive sweeteners and products used for animal nutrition.
Chief executive Nick Hampton said: “We are exploring the potential to separate our Food & Beverage Solutions and Primary Products businesses through the sale of a controlling stake in Primary Products to a long-term financial partner.
“This transaction would create two businesses, each able to focus on its own strategic and capital allocation priorities – Tate & Lyle focused on Food & Beverage Solutions, and Primary Products in partnership with a new investor with a long-term commitment to growing the business.”
The company increased its final dividend payout by 5.8% to 22p for shareholders.
Mr Hampton added: “The past year has tested us like no other, and our performance has demonstrated the resilience, quality and agility of Tate & Lyle.
“We are emerging stronger from the pandemic and I am more confident than ever in the long-term growth potential of our business.”
Shares were 5.5% lower at 769.8p in early trading.