Unilever rushes to raise sales forecast

Unilever was forced to rush out a trading statement yesterday, despite being in its closed period ahead of annual financial results, in an attempt to clarify comments made by its co-chairman, Antony Bergmans, last week.

The Anglo-Dutch consumer products group raised its forecast for underlying sales growth for its top 400 brands to "some 5.4 per cent". This was ahead of previous guidance of 4.5 to 5 per cent growth given by the company in December.

The unscheduled announcement will take the gloss off Unilever's full-year figures when the group reports its performance for 2002 on 13 February. "It's a stunning result but they can't stun the market today," one food sector analyst said. "It doesn't want to know." Despite rising in early trade Unilever shares closed down 4.5p at 529.5p.

Mr Bergmans' comments, made to a business seminar, suggested that the group had enjoyed improved sales growth in 2002. But it was unclear whether he was referring to the full year or just the fourth quarter. Under City regulations, companies are not allowed to discuss their trading performance during the so-called "closed period" ahead of their financial results.

A Unilever spokesman said: "There was clearly some confusion as to what period was being referred to, so we decided to avoid any remaining uncertainty by issuing the statement."

The group, which makes Dove soap, Magnum ice cream and Lipton tea, said the rise in underlying sales had been driven by a string of product innovations backed up by promotional activity. In the UK, new advertising campaigns include one for the group's Pot Noodle product.

"This was not expected and has very positive implications for growth in the fourth quarter. Annual growth of 5.4 percent suggests fourth-quarter top brands growth of about 9 per cent," Robert Jan Vos, an analyst at ING Financial Markets, said.

Unilever added that its operating margin for the full year is expected to be up by some 100 basis points. Earnings per share for the year were expected to be up by some 20 per cent at constant exchange rates, driven by cost savings, lower interest and tax, the group said.

Unilever is more than halfway through a huge restructuring launched in 2000 called Path to Growth. It said the initiative, which runs until 2005, had continued to deliver savings in line with the plan.

Under Path to Growth, Unilever is shedding 1,200 underperforming brands to leave it focused on 400 products. Its best sellers, which are expected to have contributed 90 per cent of group sales last year, include Hellmann's mayonnaise, Knorr stock cubes and Domestos bleach. It is targeting underlying sales growth of 5 to 6 per cent and margins of more than 16 per cent by 2004.