Jan. 23 (Bloomberg) -- Shares of Tate & Lyle Plc, the maker of the sweetener Splenda, fell 16 percent, the most in almost seven years, after the company said fiscal full-year profit will miss estimates.

Splenda sales haven't risen as fast as projected as some customers are still reformulating their food and drinks to include the sucralose-based product, Chief Executive Officer Iain Ferguson said today on a conference call with analysts. Coca-Cola Co. and PepsiCo Inc. use lower-calorie Splenda as an alternative to sugar.

Sweeteners including Splenda accounted for about half of Tate's revenue last year, with food ingredients such as stabilizers making up the rest. Tate, once the world's largest sugar refiner, expanded into higher-profit products including sucralose after the European Union cut sugar subsidies.

``It's a difficult situation,'' said Richard Workman, an analyst at London-based Oriel Securities Ltd. who has an ``add'' rating on Tate. ``The general take-up of Splenda is a bit slower than expected.''

The share-price decline cut Tate's market value by about 548.4 million pounds ($1.09 billion) to 2.98 billion pounds. The stock rose 36 percent last year to a high of 820.15 pence on Dec. 15, buoyed by surging first-half profits and margins of more than 40 percent on sucralose.

Ferguson and Chief Operating Officer Stanley Musesengwa each bought 16,428 shares at 608.75 pence apiece, Tate said today in a statement. Ferguson now has 85,091 shares, and Musesengwa has 94,200.

`Only Modest' Gains

Splenda sales will increase ``only modestly,'' Tate said. That means profit growth from so-called value-added products will be ``significantly below'' the company's 30 percent goal, Tate said.

Ferguson said on the call that the company is putting ``additional resources'' into helping U.S. soft-drink makers integrate Splenda into their products' recipes.

The weaker U.S. dollar will also crimp earnings, Tate said. The dollar has declined almost 10 percent against the pound in the past year, dropping to $1.9844 in London today. Tate's biggest market is the Americas, which generated more than 40 percent of revenue last year.

Profit before tax, exceptional items and amortization will be ``modestly below'' analysts' estimates in the year ending March 31, though ahead of the previous year, Tate said.

The revised outlook prompted Citigroup Inc. to reduce its rating for Tate to ``hold'' from ``buy.''

``With no capacity constraints impacting second-half sales, it is hard from our revised standpoint to see why sucralose sales should increase materially beyond fiscal year 2007,'' Citigroup analyst Jeff Stent wrote in a note to clients.

Sugar Cubes

Tate shares fell 112 pence to 608 pence in London, after dropping as much as 119 pence earlier. Tate had already said in November that profit growth would slow in the second half on higher wheat and energy costs.

Henry Tate, founder of the Tate Gallery in London, began refining cane in 1859 and is credited with introducing the sugar cube to the U.K. The company has since expanded into molasses, ethanol and food additives. Tate will continue to refine sugar-cane with an expansion to process 1.5 million tons of sugar a year from 1.1 million at its London refinery, the company said in November.

Tate is shutting its sugar-beet processing units this year due to the change in the EU's sugar-subsidy policy. The EU is reducing its exports of the sweetener after Brazil in 2005 won a World Trade Organization ruling preventing growers in Europe from exporting their surplus production.

Sugar sales in Europe are expected to be ``negatively impacted by the oversupply of sugar in the market, as a result of the slow surrender of quota to date,'' Tate said today.

Tate reported a net loss of 30 million pounds last fiscal year on sales of 3.72 billion pounds. Pretax profit was 42 million pounds.

To contact the reporters on this story: Marianne Stigset in London at mstigset@bloomberg.net; Grant Smith in London at gsmith52@bloomberg.net.

Last Updated: January 23, 2007 12:39 EST