Unilever gives FTSE 100 an early boost

It’s been a mixed start to the day for European markets with the FTSE100 edging higher after some positive earnings updates, while markets in Europe are under pressure as investors absorb what yesterday’s news from Gazprom is likely to mean when it comes to gas supplies over the next few days.

Anglo American is leading the way higher despite weaker than expected Kumba iron ore results for Q2. Firmer copper prices along with a modestly weaker US dollar are giving a lift to the basic resource sector.

Today’s H1 results were always likely to be a key test for Unilever CEO Alan Jope, in the wake of the misguided £50bn failed bid for GlaxoSmithKline’s consumer business earlier this year. Looking back now and given the current much lower valuation of Haleon Unilever can be considered to have dodged a very large bullet.

It is therefore good news that the company was able to report a 14.9% rise in revenues to €29.6bn, largely due to its ability to raise prices, with the shares rising to their highest levels this year, and finally drawing a line under the events of the first half.

Costs have gone up and that has hit margins to a certain extent, but the effect has been minimal with underlying margins slipping 180bps to 17%.

Underlying sales during the first half rose by 8.1%, while underlying earnings per share rose by 1%, with the company raising its full year guidance for sales growth to above the previous range of 4.5% to 6.5%, with Q2 showing strong gains across all three business areas, Home Care, Foods and Refreshment and Beauty and Personal Care.

Markets appear to have given a collective shrug to easyJet’s Q3 numbers today which have served to highlight the impact the various travel disruptions have had on its business over the last 3 months, and which saw the shares slide to 10-year lows earlier this month. Unlike Ryanair yesterday, the airline posted a headline loss before tax of £114m, with the impact of the recent disruption costing setting it back £133m.

The number of passengers flown rose to 22m, with 87% of 2019 capacity flown during the quarter, compared to 16% a year ago. This is expected to increase to 90% in Q4 Total group revenue for Q3 increased to £1.75bn, with ancillary revenues increasing to £603m as more passengers paid extra for items like speedy boarding and extra cabin bags. Costs were also higher rising to £1.87bn. Fuel costs for Q4 are 83% hedged, and 60% hedged for the first half of fiscal year 2023 at $784 per metric tonne. .