Unilever buoyed by strong first half

Dove-to-Knorr group Unilever gave shareholders a lift today after revealing it was on track for sales growth at the top end of expectations.

Shares rose 6% as Unilever said its efforts in 2005 to focus on core products had resulted in a strong first half to its financial year.

The Anglo-Dutch group, which also makes Magnum ice cream and Hellmann’s mayonnaise, said underlying sales grew by 5.8% in both the second quarter and the half year, helped by strong growth in Asia and Africa.

Unilever described trading in UK, France and Germany as “still subdued but improving”, with sales growth in Europe improving to 2.6% in the first half.

In the UK, there was good growth in deodorants, household care, tea and dressings, but some market share loss in fabric conditioners and hair care, as well as lower sales of ice cream following prolonged wet weather.

Across the group, Unilever said underlying sales growth was now expected to be at the upper end of the 3% to 5% forecast range, together with an underlying improvement in operating margin.

Graham Jones, an analyst at Panmure Gordon stockbrokers, said: “The outlook is more confident and upbeat than we had expected.”