City sends Unilever into £3bn dive on profit woes

 

Nearly £3 billion was wiped off the value of the Dove to Hellmann’s business Unilever today in the wake of the consumer goods giant’s shock profit warning.

Shares fell 94p, or 3.9% to £23.46, after bosses said last night that emerging market sales would slow from an expected 5.5% growth to as little as 3% in the third quarter of the year. Unilever’s woes rippled out to the wider sector as Cillit Bang to Vanish rival Reckitt Benckiser fell 121p to 4401.5p.

Emerging markets — including Brazil, India and Thailand — make up 50% of Unilever’s sales but suffered due to fluctuating currencies, although the company claimed the final quarter would see a return to expected growth.

However, some analysts suggested the issues lay closer to the boardroom door rather than on the currency markets, heaping pressure on chief executive Paul Polman, who explains himself to analysts and investors tomorrow. Brokers Panmure Gordon said: “The fact that we have had yet another period of disappointing growth in developed markets really should, in our view, prompt a re-evaluation of Unilever’s strategy.”

Ben Ralph-Davies at marketmaker Winterflood warned: “I think once more people speak to management and conclude the acceleration assumption is based on little substance the shares will fall further.”

Unilever, which also owns brands including Ben and Jerry’s ice cream, PG Tips and Marmite, said mature markets such as the US and Europe would remain “flat to down”.

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