Unilever fends off Kraft move with £4bn profits

CONSUMER goods giant Unilever today attempted to fight off another takeover bid from Kraft Heinz as it ramped up profits in a tough market.

The Marmite-to-Magnum ice-cream maker’s chief executive Paul Polman, whose performance is under the spotlight following the group repelling the £115 billion approach in February, said results for the first half “show continued growth well ahead of our markets”.

The company, which is also behind the Dove soap and Hellmann’s mayonnaise brands, saw underlying sales rise 3%, just below expectations of 3.1%. Pre-tax profit increased to €4.6 billion (£4.1 billion) from €3.6 billion. It was helped by strong demand in the UK for Cornetto cones and Ben & Jerry’s ice cream thanks to Britain’s recent heatwave.

However, it noted tougher conditions in some overseas markets, flagging headwinds from Brazil’s economic and political crisis, and the introduction of an Indian goods and services tax this year. The company stood by its full-year sales forecast for growth in the 3% to 5% range.

The update comes around five months after Unilever launched a review of options to “acceler-

ate delivery of value” for shareholders and improve performance after the Kraft Heinz approach. In April it unveiled plans to sell its spreads business, which is valued at around £6 billion, or spin it off into a separate company.

Regarding the sale of the margarines business, chief financial officer Graeme Pitkethly told the Standard he is confident “we will have a lot of of excitement” around the division. He said preparations to auction it were well under way.

Asked if the group was right to rebuff the Kraft Heinz offer, he said, “We certainly think that was the case. The first six months [results] demonstrate strong progress against our strategic plan.”

The shares rose 22.97p to 4339p.

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