Unilever: I can’t believe its not a spin-off: Margarine and other spreads are 7% of sales and although Unilever is taking market share, it is a declining market. So the unit is a drag on growth. On Thursday, Unilever said it would put most of the spreads business into a standalone unit so that a dedicated team can focus on turning it around. It is not, Unilever insists, the first step towards a full separation. And the group’s management seems more enthusiastic about other parts of the empire. Over the past six years it has sold €2.8 billion of turnover, mainly in foods. Pasta sauces, peanut butter and diet drinks have all been shown the door. In the same period it has bought €3 billion of turnover, mainly in personal care. True, by spinning off foods Unilever would lose a cash machine that can fund growth elsewhere, but with net debt (according to Jefferies) of just one times earnings before interest, tax, depreciation and amortisation, the group has plenty of flexibility. The combined market capitalisation of the two companies is $100 billion. The internal separation Unilever has proposed looks like a messy halfway house, and raises questions about how committed the company is to food in general and spreads in particular. It should dispel those questions, and be decisive.
Unilever hit by emerging market slowdown: Consumer goods giant Unilever is a bellwether for the global economy because, from toothpaste to washing up powder, it gives us a view into household spending from Boston to Beijing. The group’s sales figures gave a worrying insight into the state of the world economy, and sounded a warning for all investors. Sales growth across Unilever’s Asian, African, Middle Eastern and East European emerging markets was dragged down to 3.1%, less than half the 6.5% that Andrew Wood (from broker Bernstein) forecast. Revenue for the group as a whole fell by 2% to €12.2 billion (£9.63 billion) during the quarter. It wasn’t just Asia that disappointed. European sales looked awful. The company reported a 4.3% decline in sales, far worse than market consensus for a 1% decline. In particular, poor weather in July and August hit Ben and Jerry ice cream sales. But more worryingly the group reported deflationary pressure on prices across Europe. Sales volumes declined 1.7%, bur price deflation was 2.7% during the third quarter. The Americas was the only ray of hope with sales growth accelerating to 6.8% during the third quarter. Latin America was the main driver of growth in volume and prices. Unilever shares have struggled during the past 12 months as they have fallen by almost 9%, compared with the wider FTSE 100 that is up more than 4%. The fears over a sharp reversal in emerging market fortunes look overdone for now. However the shares are still richly priced for a company where growth is slowing. They trade on a price-earnings ratio of 20 times, falling to 18 times next year, and that looks at odds with a company that reported declining revenue and cash flow in the most recent annual results. Unilever is a quality company but not at these prices. Questor downgrades the shares to a hold. Unilever at £24.40-94p Questor Says ‘Hold’.
9 Oct '14
LT Strong Buy Tip
http://www.whatinvestment.co.uk/financial-news/shares-and-trading/2471047/nick-train-the-three-sectors-to-invest-in-for-the-next-decade-are-booze-food-and-soap.thtml Expert believes food & soap (consumer staples) sector(s) will hugely outperform over the next decade. His favourite stock is Unilver because of this, and it's growth in India. Have to say it's looking cheap here at this level... And TNW is a bit redundant because it's brands have clear intangible value (which you can't really ignore)
27 Aug '14
Economic Moat & Intangible Asse..
of ULVR mentioned here http://www.morningstar.co.uk/uk/news/128286/the-secret-to-profitable-investing-why-moats-matter.aspx
Datafeed and UK data supplied by NBTrader and Digital Look.
While London South East do their best to maintain the high quality of the information displayed on this site,
we cannot be held responsible for any loss due to incorrect information found here. All information is provided free of charge, 'as-is', and you use it at your own risk.
The contents of all 'Chat' messages should not be construed as advice and represent the opinions of the authors, not those of London South East Limited, or its affiliates.
London South East does not authorise or approve this content, and reserves the right to remove items at its discretion.