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Unilever and Sage set to be in the spotlight on Thursday

Last updated: 05:30 23 Jul 2020 BST, First published: 14:22 22 Jul 2020 BST

Unilever PLC - Unilever and Sage set to be in the spotlight on Thursday

Corporate and capital-structure matters may feature in Unilever PLC’s (LON:ULVR) half-yearly results on Thursday, though there will also be attention on sales and operations.

Investors are likely to look for any details on the group’s tea business, which it put up for sale in January, as well as any other of the company’s weaker divisions which may also have been earmarked for disposal.

Meanwhile, the figures will be inspected for how much damage the coronavirus pandemic has inflicted on the company’s top line, with Unilever exposed heavily to the dining out market which has suffered badly during the crisis.

Analysts at UBS are expecting Unilever’s organic sales to fall 4.7% in its second quarter, driven by a “sharp weakening in Europe” particularly its out-of-home ice cream business which is forecast to see like-for-like sales tumble 40%, although this may be offset by rises in in-home ice cream consumption.

The UBS analysts said the weak Europe performance is also likely to be exacerbated by the pandemic worsening in India and Latin America, which together account for around 23% of group sales.

Shareholders will also be looking at Chinese demand levels, where restaurants have been open for a longer period, as well as any commentary about the group’s outlook for the rest of the year. There will also be eyes on the state of the dividend after Unilever said previously that it will continue to make payouts despite the disruption to its business.

Sage Group to reveal revenue

On Thursday, Sage Group PLC (LON:SGE) will report on its revenue performance for the three months to June 30, 2020. Analyst consensus sees revenue growth of just 1% for the full-year to September 30, 2020, compared to 5% growth last year.

According to analysts at Shore Capital, there is downside risk from larger-than-expected declines in SSRS, processing and other revenues (maintenance and support) as well as headwinds around software subscription revenue growth, reflecting increased churn and lower new customer acquisition.

In May, the enterprise software specialist said recent trading had seen a slowdown in new customer acquisition and a slight increase in churn among smaller customers.

“We think it more likely than not that COVID-19 has had a broad impact on businesses generally, resulting in a likely slowdown in net adds and increased churn, despite the fact that many of Sage’s customers are supported by government-backed financial support schemes,” the ShoreCap analysts said.

“While Sage is a well-managed and resilient business and we continue to view the group as a core long-term holding within the sector, we see limited opportunity for outperformance in the near term given potential downgrades to consensus estimates,” they added.

Thursday July 23:

Trading updates: Sage Group PLC (LON:SGE), AJ Bell PLC (LON:AJB), Rightmove PLC (LON:RMV), Tate & Lyle PLC (LON:TATE), Polymetal International PLC (LON:POLY), Brewin Dolphin Holdings PLC (LON:BRW), C&C Group PLC (LON:CCR), Countryside Properties PLC (LON:CSP)

Finals: IG Group Holdings PLC (LON:IGG), Cohort PLC (LON:CHRT)

Interims: Unilever PLC (LON:ULVR), Relx PLC (LON:REL), Croda International PLC (LON:CRDA), Beazley PLC (LON:BEZ), Bodycote PLC (LON:BOY), Howden Joinery Group PLC (LON:HWDN), Getbusy PLC (LON:GETB), Mail.ru Group Ltd (LON:MAIL),

FTSE 100 ex-dividends to knock points 2.75 points off the index: Pennon Group PLC (LON:PNN), SSE PLC (LON:SSE)

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