Unilever first quarter sparkles as sees 'more tailwinds than headwinds'

16th Apr 2015 07:14

Unilever has lifted it quarterly dividend 6% as consumer goods colossus enjoyed a strong start to 2015 with underlying sales for the first quarter ahead of analyst estimates.Chief executive Paul Polman said the company had started to see "more tailwinds than headwinds" in its markets.Turnover increased 12.3% to €12.8bn at the owner of brands ranging from Marmite to Vaseline to Lynx deodorant, helped by 10.6% favourable currency move and underlying sales growth of 2.8% versus a consensus forecast of 2.1%.Analysts are expected to upgrade underlying and currency expectations for the full year.The group had previously cautioned that the first quarter was expected to be 'soft', with growth improving through the year, but underlying volume growth of 0.9% and pricing improved 1.9% was behind the forecast-beating top line, along with strong growth from emerging markets with underlying sales growth of 5.4%."We continue to like the story of good organic growth accompanied by margin expansion," she said. "Whilst growth in emerging markets has slowed, demand for premium products (skincare, etc) should help with pricing; furthermore, developed markets are likely to recover in our view."The shares, up 4% to 3,061p mid-morning on Thursday, are trading on an all-time high rating but Shore Capital believes the "valuation sits comfortably within a basket of its global FMCG peers".ShoreCap analyst Darren Shirley said he continued to view the group as "a longer term winner with its leading Emerging Market exposure (which remains a major virtue despite short-term constraints), strong balance sheet and ongoing margin potential from 'maxing the mix', the focus on Home Care returns and ongoing operational leverage".