Thursday 19 September 2019

Disappointing Unilever results drag on London’s blue chip index

London’s blue chip ended the day in the red.

Unilever sign
Unilever sign

By Kalyeena Makortoff, Press Association City Reporter

Unilever shares dragged on the FTSE 100, after the consumer goods giant’s third quarter sales took weather-related hits in the US and Europe.

London’s blue chip index ended the day down 0.26% or 19.83 at 7,523.04, with Unilever holding the bottom spot down 249.5p at 4,299p.

The Anglo-Dutch group recorded a 2.6% increase in underlying sales for the period to 13.2 billion euro (£11.8 billion), but that fell short of expectations and was down from 3% in the first half of the year.

Michael Hewson, a chief market analyst at CMC Markets UK, said Unilever’s third quarter figures “were disappointing to say the least”.

The company blamed the hurricanes in the US for the drop off in sales, with ice cream a particular weak spot.

“The company did keep its full year guidance unchanged, but that hasn’t been enough to stop its shares falling sharply, over concerns about weak consumer spending, a factor that was blamed for weak revenues in the latest updates from Nestle and Reckitt Benckiser,” Mr Hewson said.

sterling chart

In currency markets, the pound was down in reaction to data from the Office for National Statistics (ONS) showing that September retail sales unexpectedly dropped 0.8%, reversing a surge in August.

Non-food stores had the biggest impact on the drop.

Sterling was down 0.25% versus the US dollar at 1.316 and dropped 0.6% against the euro at 1.112.

Across Europe, the French Cac and German Dax ended the day down around 0.3% and 0.4%, respectively.

Brent crude prices tumbled 1.7% to $57.20 per barrel after the US Energy Information Administration showed an increase in gas inventories last week.

In UK stocks, BP rose 4.15p to 492.15p amid news that chairman Carl-Henric Svanberg will step down once a replacement is found. He has served in the role since 2010.

The London Stock Exchange’s announcement of its own chief executive’s pending departure was followed by a 42p drop in its share price to 3,878p.

Xavier Rolet is set to stand down by the end of 2018 after nearly a decade at the helm.

Xavier Rolet

Shares in builders’ merchant and Wickes DIY chain owner Travis Perkins rose 33p to 1,505p. The group reported a 4.1% rise in sales in the third quarter, after jacking up prices to offset rising costs from the Brexit-hit pound.

Interserve shares plunged 24.5p to 65.5p after the outsourcing and construction group warned that group operating profit would be 50% lower than it was in the second half of last year, and said it may breach its banking covenants.

It said profits had come under pressure from added costs, tough trading conditions and “operational delivery issues”.

The biggest risers on the FTSE 100 were Smurfit Kappa Group up 78p at 2,240p, Randgold Resources up 130p to 7,490p, RSA Insurance Group up 7.5p to 626p, and Fresnillo up 17p at 1,418p.

The biggest fallers on the FTSE 100 were Unilever down 249.5p at 4,299p, WPP down 42p at 1,366p, BAE Systems down 15.5p at 600p, and Smiths Group down 36p at 1,537p.

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