Regency View:
Update
Unilever deliver better than expected underlying sales growth
Unilever (ULVR) released their first quarter 2022 Trading update last week…
The consumer goods giant warned ‘unprecedented’ inflation is set to accelerate in the second half of 2022 as first quarter results revealed better than expected underlying sales growth of 7.3%.
This growth was driven entirely by price increases of 8.3% and each of Unilever’s three core divisions suffered a drop in quarterly sales volumes as a result.
Unilever is now forecasting full year sales growth towards the top end of its previously guided 4.5% to 6.5% range, but this was tempered by a warning that further price increases would impact volumes.
Operating margin for the first half is expected to be within the previously guided 16% to 17% range, but Unilever now sees the full year underlying operating margin coming in at the bottom end of that range due to soaring costs.
CEO, Alan Jope commented:
“Our priority markets of the USA, India and China all grew competitively. We continue to reshape our portfolio into high growth spaces, with Prestige Beauty and Functional Nutrition again growing strongly.”
ULVR Daily Candle Chart
Centrica confirm strong start to the year
Centrica (CNA) released a bullish trading update yesterday in which it said has delivered strong operational performance in the first four months of 2022…
The British Gas owner expects full year adjusted earnings per share to be “around the top of the range of more recent analyst expectations”.
Supply chain disruption at its domestic energy businesses was offset by strong volumes from its nuclear and gas production assets.
Centrica also said that the disposal of Spirit Energy Norway is on track to complete in the second quarter of 2022 subject to Norwegian regulatory approvals. And they have now “started to evaluate longer term options for repurposing Spirit Energy’s retained UK assets to aid the energy transition and also continue to progress options to convert our Rough and Easington facilities to enable the UK’s hydrogen targets”.
The update has received a somewhat muted reaction from the market with the shares continuing to consolidate within their well-established uptrend.
CNA Daily Candle Chart
