British sugar and sweetener group Tate & Lyle gave a shock profit warning yesterday and blamed poor uptake of its super sweetener, sucralose, in US fizzy drinks, sending its shares sliding over 15 percent.

The London-based group warned annual profits would be “modestly below market forecasts” due to lower sales of its zero-calorie sweetener, also known as Splenda, and dollar weakness. Half its profits are earned in US currency.

As initial high hopes for the use of Splenda in US carbonated diet drinks evaporated, analysts slashed profit forecasts for its year to March 2007 and beyond – only a month after the company had previously reassured investors.

Analysts said management’s previous bullishness on sucralose had been misplaced. On announcing half-year results in early November, the group said it expected significant sucralose sales and profits growth in its second half, and in a later update, it did not hint at any problems.

Tate is now warning that pretax profit before exceptionals and amortisation will come in below the market consensus of 347 million pounds for the year to March 2007 but still ahead of the previous year’s figure of 295 million.

Tate’s broker, Citigroup, slashed its profit forecast to 330 million pounds for the year to March from 345 million and for the following year to 361 million from 430 million as it revised forecasts for sucralose, recent foreign exchange moves and ethanol pricing.

Analysts said Tate has had difficulty in breaking into the competitive diet drink sweetener market with sucralose and would need to reformulate the way its product is mixed into US soft drinks for greater success in future.

Sucralose accounted for 21 percent of group profits last year, and with a second plant coming on stream in Singapore, analysts and investors had high hopes for strong profit growth.