Russ Mould, investment director at AJ Bell, said: “Unilever’s shares shot to the top of the FTSE 100 leaderboard, and their highest mark since March, as the consumer goods giant’s first-half results pleased and chief executive Fernando Fernandez raised sales and profit expectations for 2026 overall.
“Shareholders will be particularly pleased to see an acceleration in organic sales growth to 5.8 per cent year-on-year in the second quarter, the fastest rate of increase in more than a decade and well ahead of analysts’ forecasts.
“Volume growth was the key, as pricing remained muted, and Beauty, Personal Care and Home Care led the charge.
“The only disappointment was Food, and Mr Fernandez will doubtless see that as a vindication of his strategy to spin off that unit and combine it with America’s McCormick.
“The deal is on track to complete in the middle of 2027 and, after last December’s demerger of The Magnum Ice Cream Company, will leave Unilever as a pure play on health and personal care, where key brands include Dove, Persil, Domestos and Lifebuoy.
“Meantime, management expects stronger prices in the second half of this year, after modest increases between January and June. This should help to offset input cost increases, boost profit margins, and support the cash flow that funds cash returns to shareholders.
“Unilever has completed its planned €1.5 billion share buyback for this year, but the company nudged up its dividend by three per cent compared to the second quarter a year ago and stuck to its plan of €6 billion in buybacks in total across 2026 to 2029.”
Contact details are available to account holders.
Create a free account to get in touch with this expert.