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Unilever's share price soared as the Anglo-Dutch giant unveiled interim results well-ahead of analyst's forecasts. Underlying sales grew by 5.8 per cent, helped by higher volumes across all product categories and price increases.
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In Asia and Africa - now representing almost 30 per cent of the group's revenues - sales were up 11.3 per cent, helped by a strong performance in China. In the US, volumes were boosted at the end of the period as customers increased stocks ahead of the implementation of a new IT system. This helped sales in the Americas to increase by 4.7 per cent despite a modest performance from Brazil and Mexico.
In Europe, performance in the UK was mixed, as the group lost market share in fabric conditioners and hair care products. However, strong contributions from the Netherlands, Italy and Russia helped underlying sales in the region rise by 2.6 per cent, driven entirely by volumes.
Since 2005, the group, which owns a vast portfolio of brands from Dove soaps to Walls Ice cream and Knorr stock cubes, has been re-focusing on its core labels and margin improvement . That's led to a large number of cost reduction initiatives. For instance, chief executive Patrick Cescau has just confirmed the disposal of the American laundry division.
Bear Stearns forecasts full year adjusted EPS of 147 cents (127 cents in 2006), rising to 162 cents in 2008.
Unilever (UNLV) |
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|---|---|---|---|---|
| ORD PRICE: | 1559p | MARKET VALUE**: | £ 45bn | |
| TOUCH: | 1558-1559p | 12-MONTH HIGH: | 1,682p | LOW: 1175p |
| DIVIDEND YIELD: | 3.1% | PE RATIO: | 18 | |
| NET ASSET VALUE*: | 443 cents | NET DEBT: | 69% | |
| Half-year to 30 Jun | Turnover (€bn) | Pretax profit (Ebn) | Earnings per share (cents) | Net div per share (p) |
|---|---|---|---|---|
| 2006 | 19.8 | 2.66 | 65 | 15.62 |
| 2007 | 20.1 | 2.74 | 72 | na*** |
| % change | +1 | +3 | +11 | |
Ex-div: 07 Nov Payment: 05 Dec * includes intangible assets of €17.2bn, or 595 cents a share **market value of Unilever PLC and NV *** details of the interim dividend will be announed in early November |
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Unilever's strategic restructuring is finally delivering. Cost saving initiatives have contributed to offset the inflationary pressures on raw materials. So trading on a forward PE ratio of 15, falling to 14 in 2008, the shares rate good value.
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-IC-1.5.4a-prod - 31/10/2008 13:11:34 - carlos.princz
