Unilever restores confidence of friends


For such a reliable performer, Unilever has found life a bit of a struggle this year. The Birds Eye-Walls and Persil group has already disappointed the market with its first-quarter results and its interims in August, causing the City to lower profit expectations. Long considered a safe haven in tough times, Unilever could have lost a few friends if it had disappointed for a third quarter running. The fall in the shares ahead of yesterday's announcement showed that analysts feared the worst.

That explains the collective sigh of relief when Unilever produced third- quarter figures bang on the money. Pre-tax profits for the nine months to September were up 9 per cent at pounds 1.9bn on sales 6 per cent higher at pounds 23bn. The shares jumped 22p to pounds 12.11p on a grim day for the market.

In Europe, profits were boosted by strong ice-cream sales in Britain due to the hot weather, though southern Europe did not enjoy the same boost. CK1, the new fragrance for men and women, is casting a pleasing aroma across Unilever's figures and confirms the Calvin Klein deal of the late 1980s was a shrewd one.

There are still problems, notably the Persil Power debacle, which continues to affect the group's detergent performance in Europe. Though sales this year are similar to 1994, profits are down as the company is having to spend more on advertising to try to claw back lost market share. New Generation, the replacement, is gaining ground but it is proving an expensive task.

Elsewhere, North America is going great guns and profits increased by more than 40 per cent to pounds 352m. The ice-cream business is launching new products with gusto. Margins are already into double digits. Detergents and food operations showed strong growth.

Latin America and South-east Asia did well, but other countries, including Turkey and Nigeria, are battling against higher inflation and economic uncertainty. Looking forward, it seems trading will continue to be patchy. It is particularly tough in Europe, which accounts for half of business. If that area does not make progress it is difficult to see Unilever achieving the earnings growth the market is expecting.

Merrill Lynch has left its full-year profit forecast unchanged at pounds 2.57bn, which puts the share on a forward rating of 14. Unexciting.

Bibby shake-up

bearing fruit

Until three years ago, the worst that could be said about J Bibby was that it was yet another conglomerate that had lost its way. But in 1992 the paper to scientific equipment group made a near-disastrous move into the distribution of Caterpillar earth-moving equipment in Spain and Portugal, just as the Iberian construction cycle took another violent downturn.

The result was that profits fell off a cliff, but Bibby was at last prompted to take dramatic action to reverse years of under-performance. The animal feeds to free-range eggs agricultural division was sold and the rag-bag of businesses within the industrial side rationalised. The fruits of last year's shake-up are coming through. Bibby has soared back into the black in the 12 months to September, turning a loss of pounds 10.7m into profits of pounds 32.9m. The figures were flattered by the absence this time of pounds 30.6m of exceptional items relating to the restructuring in 1994, but there was also a strong recovery from the remaining operations, which raised underlying profits from pounds 26.7m to pounds 41m.

Admittedly, materials handling, mainly the Hyster fork-lift distributor in the UK and US, was helped by better economic conditions in raising profits 22 per cent to pounds 20m.

But there should be more to come from France, where the dealership's territory has doubled.

The recent trend downwards in pulp costs after a sharp rise also bodes well for the industrial division, but the best news came from the Iberian operation, which has at last started making decent profits. The pounds 9.2m profit in the latest period compares with pounds 900,000 last time and a pounds 7m loss two years ago. With returns on capital below 11 per cent, the industrial and earth-moving sides are never likely to match the 26.5 per cent from materials handling. But there remains plenty of scope to reach the group's target of above 15 per cent in both.

Profits of pounds 36.5m this year would put the shares at 130p, up 8p, on a forward multiple of 10. Reasonable value, although the market in the shares is thin due to the 78 per cent stake held by Barlow Rand of South Africa.

Arts and Entertainment
Judi Dench appeared at the Hay Festival to perform excerpts from Shakespearean plays
tvJudi Dench and Hugh Bonneville join Benedict Cumberbatch in BBC Shakespeare adaptations
Arts and Entertainment
Exhibition at the Centre Pompidou in Metz - 23 May 2012
Is this how Mario Balotelli will cruise into Liverpool?
Ronahi Serhat, a PKK fighter, in the Qandil Mountains in Iraqi Kurdistan
Arts and Entertainment
Alfred Molina, left, and John Lithgow in a scene from 'Love Is Strange'
ebooksAn evocation of the conflict through the eyes of those who lived through it
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Soft Developer (4.0, C#, Windows Services, Sockets, LINQ, WCF)

£65000 - £75000 per annum: Harrington Starr: .NET Developer (4.0, C#, Windows ...

C# Developer -Winforms, VB6 - Trading Systems - Woking

£1 per annum: Harrington Starr: A leading financial software house with its He...

C #Programmer (.Net 4.0/4.5/ C#) -Hertfordshire-Finance

£45000 - £50000 per annum: Harrington Starr: C #Developer (.Net 4.0/4.5/ C#, A...

JQuery Developer JQuery, UI, Tomcat, Java - Woking

£1 per annum: Harrington Starr: JQuery Developer JQuery, UI, Tomcat, Java - Tr...

Day In a Page

Middle East crisis: We know all too much about the cruelty of Isis – but all too little about who they are

We know all too much about the cruelty of Isis – but all too little about who they are

Now Obama has seen the next US reporter to be threatened with beheading, will he blink, asks Robert Fisk
Neanderthals lived alongside humans for centuries, latest study shows

Final resting place of our Neanderthal neighbours revealed

Bones dated to 40,000 years ago show species may have died out in Belgium species co-existed
Scottish independence: The new Scots who hold fate of the UK in their hands

The new Scots who hold fate of the UK in their hands

Scotland’s immigrants are as passionate about the future of their adopted nation as anyone else
Britain's ugliest buildings: Which monstrosities should be nominated for the Dead Prize?

Blight club: Britain's ugliest buildings

Following the architect Cameron Sinclair's introduction of the Dead Prize, an award for ugly buildings, John Rentoul reflects on some of the biggest blots on the UK landscape
eBay's enduring appeal: Online auction site is still the UK's most popular e-commerce retailer

eBay's enduring appeal

The online auction site is still the UK's most popular e-commerce site
Culture Minister Ed Vaizey: ‘lack of ethnic minority and black faces on TV is weird’

'Lack of ethnic minority and black faces on TV is weird'

Culture Minister Ed Vaizey calls for immediate action to address the problem
Artist Olafur Eliasson's latest large-scale works are inspired by the paintings of JMW Turner

Magic circles: Artist Olafur Eliasson

Eliasson's works will go alongside a new exhibition of JMW Turner at Tate Britain. He tells Jay Merrick why the paintings of his hero are ripe for reinvention
Josephine Dickinson: 'A cochlear implant helped me to discover a new world of sound'

Josephine Dickinson: 'How I discovered a new world of sound'

After going deaf as a child, musician and poet Josephine Dickinson made do with a hearing aid for five decades. Then she had a cochlear implant - and everything changed
Greggs Google fail: Was the bakery's response to its logo mishap a stroke of marketing genius?

Greggs gives lesson in crisis management

After a mishap with their logo, high street staple Greggs went viral this week. But, as Simon Usborne discovers, their social media response was anything but half baked
Matthew McConaughey has been singing the praises of bumbags (shame he doesn't know how to wear one)

Matthew McConaughey sings the praises of bumbags

Shame he doesn't know how to wear one. Harriet Walker explains the dos and don'ts of fanny packs
7 best quadcopters and drones

Flying fun: 7 best quadcopters and drones

From state of the art devices with stabilised cameras to mini gadgets that can soar around the home, we take some flying objects for a spin
Joey Barton: ‘I’ve been guilty of getting a bit irate’

Joey Barton: ‘I’ve been guilty of getting a bit irate’

The midfielder returned to the Premier League after two years last weekend. The controversial character had much to discuss after his first game back
Andy Murray: I quit while I’m ahead too often

Andy Murray: I quit while I’m ahead too often

British No 1 knows his consistency as well as his fitness needs working on as he prepares for the US Open after a ‘very, very up and down’ year
Ferguson: In the heartlands of America, a descent into madness

A descent into madness in America's heartlands

David Usborne arrived in Ferguson, Missouri to be greeted by a scene more redolent of Gaza and Afghanistan
BBC’s filming of raid at Sir Cliff’s home ‘may be result of corruption’

BBC faces corruption allegation over its Sir Cliff police raid coverage

Reporter’s relationship with police under scrutiny as DG is summoned by MPs to explain extensive live broadcast of swoop on singer’s home