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Unilever and retail sales in focus ahead of the Easter weekend

Its an early finish for the market this week, but, there's a little bit more news to come.
Marmite owner Unilever will be a highlight on Thursday

The market will get that Friday feeling a day earlier than normal but there’ll still be a busy enough corporate diary before the bank holiday weekend arrives.

Perhaps the day’s main highlight might concern the broader economy rather than a company update.

UK retail sales figures will round off the week’s economic releases.

The sector is under immense pressure, especially non-food retailing, given the Brexit induced caution, but because of the fear over a hard ‘No-deal’ and panicky consumers stocking up, there may be a temporary boost to retail sales as was seen in recent manufacturing numbers.

Trading news from Unilever

Marmite spread, Dove soap and Ben & Jerry’s ice cream owner Unilever plc (LON:PLC) is expected to report underlying sales growth below its mid-term guidance range for the first quarter.

Deutsche Bank forecasts a 2.6% increase in like-for-like sales, compared to Unilever’s 3-5% range, due to more challenging comparatives. The FTSE 100-listed firm warned in January that it expected challenging market conditions to persist in 2019.

Last year the consumer goods giant was hit by currency devaluations, rising commodity costs, the economic crisis in Argentina and a truckers’ strike in Brazil in the second quarter.

UBS thinks Brazil growth should normalise in the first quarter from the 10% like-for-like sales rise in the second half of last year as Unilever is largely done with the pipeline refill following the trucker strike. However, issues in Argentina are likely to continue to provide a drag on volumes.

Deutsche Bank expects growth in the first quarter of this year to driven by price rather than volumes.

The home care division is forecast to be the strongest with 5% underlying sales growth followed by personal care up 3% and foods and refreshments up 1%.

CMA concerns to be addressed in Rentokil’s update

Blue-chip rat catcher Rentokil Initial PLC (LON:RTO) will issue a first-quarter trading update on Thursday.

The pest control services provider reported a bumper set of full-year numbers back in February and predicted a better-than-expected result in 2019 as well. Investors will want to hear that this is still the case.

Thursday’s update will also give bosses the chance to outline what compromises they are prepared to make in relation to the competition concerns over its £40mln acquisition of MITIE’s pest control unit, completed last year.

The Competition and Markets Authority has said that Rentokil must offer proposals to address its concerns over the purchase or face an in-depth investigation.

M&A activity will again be in focus as well. The company made 47 acquisitions in 2018, and its chief executive said with February’s results that Rentokil had a “very active pipeline of high-quality prospects” in place for 2019, too.

Significant announcements on Thursday April 18:

Trading update: Unilever plc (Q1) (LON:ULVR), Rentokil Initial PLC (LON:RTO), Moneysupermarket PLC (LON:MONY), PZ Cussons PLC (LON:PZC), South32 Ltd. (LON:S32), Polymetal International PLC (LON:POLY)

Finals: G3 Exploration Ltd. (LON:G3E)

Ex-dividends to clip 4.2 points off FTSE 100 index: BAE Systems PLC (LON:BA.), Reckitt Benckiser PLC (LON:RB.)

Economic data: UK retail sales; US weekly jobless claims; US retail sales; US Philly Fed manufacturing report

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