Investment: Problems are not over for United Biscuits
Friday 11 September 1998
But maybe, just maybe, there is a light at the end of this very long tunnel. UB shares enjoyed a rare jump yesterday as the company reported a 14 per cent rise in pre-tax profits to pounds 51.2m. According to Eric Nicoli, UB's long-serving chief executive, the company is now making progress on the final, "recovery" phase of its three-stage plan for reconstructing the business.
But look more closely at the figures and it becomes clear that much still needs to be done. The 14 per cent profits rise was due mainly to a lower interest charge. Group sales are virtually flat, as are operating profits.
The management appears to be doing all the right things. UB increased its marketing spend by pounds 12m in the half, and supply chain efficiencies should free up further cash for marketing spending. UB is concentrating on its top brands like Hula Hoops and Penguin, as well as developing new products and rolling them out internationally.
The problem is that UB still has a long tail of under-performing brands which dilute the figures. And businesses such as the Young's fish division are still prone to one-off problems. This time it was a strike by Icelandic fishermen.
A demerger of the UK foods business from the McVitie's snacks operation might be considered at some stage and there is always the possibility of a bid now that UB is a simpler business. On analysts' forecasts of pounds 114m for the full year the shares - up 8p to 203p - trade on a forward multiple of 12. That looks reasonable value for investors not frightened off by the past.
- 1 Kim Jong-un shows off airport designed by architect he likely had executed
- 2 Michael Douglas regrets 'embarrassing' Catherine Zeta-Jones with oral sex comments
- 3 Tunisia hotel attack: Locals form 'human shield' to protect hotel from gunman Seifeddine Rezgui
- 4 Tunisian builder has been hailed a hero after knocking gunman to the ground with roof tiles
- 5 German ethics council calls for incest between siblings to be legalised by Government
Michael Douglas regrets 'embarrassing' Catherine Zeta-Jones with oral sex comments
Kim Jong-un shows off airport designed by architect he likely had executed
Tunisia hotel attack: Locals form 'human shield' to protect hotel from gunman Seifeddine Rezgui
Tunisian builder has been hailed a hero after knocking gunman to the ground with roof tiles
Greece debt crisis: Athens has one day to find €1.6bn
The moment a Queen's Guard soldier lost it and drew his gun at annoying tourist
Greece crisis: The wider lesson is that it’s time to abandon this failed experiment in currencies
'I wish the BBC would stop calling it Islamic State' – David Cameron unleashes frustration at broadcaster
Extend Right To Buy to tenants of private landlords, Labour's Jeremy Corbyn says
David Cameron struck double blow in his hopes to win Britain a new EU deal
Pentagon accuses Russia of 'playing with fire' over nuclear threats towards Nato
iJobs Money & Business
£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...
£22500 - £27000 per annum + OTE £45K: SThree: Since our inception in 1986, STh...
Negotiable: Recruitment Genius: This extremely successful and well-established...
Competitive with monthly bonus: Guru Careers: We are seeking an experienced FX...