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Costs and margins the focus for Unilever after Marmite spat

Investors will be keenly watching what the personal and household goods producer says about costs and margins at its full-year results
January 19, 2017

After its high-profile spat with Tesco (TSCO) over the price of Marmite and other brands, investors will no doubt be keen to hear from personal care and household goods giant Unilever (ULVR) on costs and margins at its full-year results next week.

IC TIP: Hold at 3355p

Broker Deutsche Bank cites input costs for 2017 and longer-term margin progression as two things to watch. The fall in the pound has raised input costs incurred in currencies such as the euro and dollar.

It will also be interesting to see the group's like-for-like sales growth, given that it has a tough year-on-year comparator of 4.1 per cent from the 2015 financial year (2.9 per cent in FY2014). Boss Paul Polman said last year he did "not see any sign of an improving global economy".

In terms of its global exposure, it will be worth watching how demonetisation in India has affected the company. The nation accounts for roughly 8 per cent of sales and the removal of the country's biggest notes could have had an impact on trading.