UB's shares, banished from the FT-SE 100, recently hit an 11-year low of 200p, having halved in just three years. In 1995, UB reported its first loss and cut the dividend. Selling the main culprit, loss-making Keebler in the US, and closing operations in Spain resulted in a one-off hit of pounds 150m.
Yesterday's interims were a more mundane affair. Excluding exceptional items, pre-tax profits almost doubled to pounds 44.9m while the dividend was held at 3.5p. Operating profits in the UK rose 15 per cent to pounds 42.3m, but profits fell in the Asia-Pacific region to pounds 2.2m from pounds 5.6m as the Australian division came under attack from PepsiCo.
UB's aim is to grow by getting the best out of its remaining businesses and by keeping costs down. To this end it has set ambitious internal targets. By the end of 1998 it aims to have lifted return on capital from a moving average of 14.5 per cent to 25 per cent, while increasing operating margins from 6.5 to 8 per cent.
Setting goals is one thing, meeting them is altogether different. While Eric Nicoli, chief executive, stressed that the interims were "relatively uneventful", management has an unhappy knack of upsetting the market and it will take at least another set of figures before the jury returns with an acquitted verdict.
In the meantime, Merrill Lynch's middle-of-the range forecasts assume pre-tax profits of pounds 109m rising to pounds 123m in 1997. That puts the shares, up 10p to 212.5p, on a forward PE ratio of 15 falling to 13. High enough.