Danni Hewson, head of financial analysis at AJ Bell, said: “Investors seemed to have a sweet tooth yesterday as shares of the newly de-merged Magnum Ice Cream Company pushed higher and its former parent company Unilever ended as the day’s biggest loser on the FTSE 100.
“Lopping off a chunk of revenue-making business will be an initial wrench for the giant goods maker, but ditching the seasonal bit of the company allows it to double down on its strategy to become more cost effective.
“And whilst the cold stuff got a warm reception yesterday, there are potential issues which could ultimately chill sentiment.
“Firstly, weight loss drugs could take a big bite out of global ice cream demand over time, and secondly the tension between the business and its Ben & Jerry’s brand could have a more substantial impact on the smaller company.
“Whilst Ben & Jerry’s social mission has sometimes created difficulties for Unilever, it represented less than 2 per cent of Unilever’s global annual revenue.
“But it will account for almost 14 per cent of the turnover at its new home.
“The increased percentage will stress the importance of a smooth working relationship with Ben & Jerry’s independent board, something which will require a delicate touch from the new team at the helm.”
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