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Unilever (ULVR) has said that it plans to ditch the UK as its headquarters and will be now become a single entity based in the Netherlands.
The Anglo-Dutch consumer goods giant confirmed that would be no job losses as it moves forward with a major restructuring strategy for the manufacturers of goods that range from Marmite to Dove soap.
It currently employs 7,300 people in the UK, and a further 3,100 in the Netherlands.
Unilever has also outlined that it will be splitting its operations in three sections, comprising of beauty and personal care, home care and foods and refreshment.
The first two of the those divisions will remain based in the UK.
The group is the third largest constituent of the FTSE 100, but it may no longer be eligible to be included on the index once it moves its HQ away from the UK. Its shares will continue to be traded in London, Amsterdam and New York
The move is seen as a blow to Theresa May’s government, but Unilever has said that Brexit was not a reason why it has taken this decision.
Unilever also stressed that its decision today secures nearly £1bn per year of continued spend in the UK, including a significant commitment to R&D.
Marijn Dekkers, chairman of Unilever, commented: “”Unilever’s Board is fully committed to delivering long-term performance and sustainable value for shareholders.
“The Board believes the move to three Divisions and the simplification of our corporate structure will create a simpler, more agile and more focused company with increased strategic flexibility for value-creating portfolio change.
“Our decision to headquarter the Divisions in the UK and the Netherlands underscores our long-term commitment to both countries. The changes announced today also further strengthen Unilever’s corporate governance, creating for the first time in our history a ‘one share, one vote’ principle for all our shareholders.”
Morning update
After announcing an unexpected £30m bill from HRMC yesterday morning, Conviviality (CVR) has announced it will cancel the payment of its interim dividend of 4.5p per share due to be paid on Friday 16 March.
The cancellation of the dividend will improve the company’s cash position by approximately £8.2m.
Conviviality suspended trading in its shares before issuing the statement about the HMRC bill yesterday morning.
Consumer products group PZ Cussons (PZC) is facing a fall in expected profits for this year, blaming conditions in the UK and Nigeria in its trading update.
Profits before tax is anticipated to be in the range of between £80m- £85m in the period to May 31 this year.
In the UK its bathing and washing division has experienced lower levels of sales, in what the group was a reflection of the uncertain economic conditions and rising inflation, which are effecting the whole of the retail industry.
While the group’s product launches have not so far had the desired effect in papering over the cracks of the wider volume shortfall.
In Nigeria, disposable income has been badly effected following the spiralling upwards of cost inflation, as a result there has been no peak season lift in sales.
As a consequence of the conditions, inventory levels have remained high, leading to intense competition, especially in the milk market.
The initiatives in place to alleviate the conditions include a reassessment of the structure of the group’s operating model to further reduce the overhead base, and a cost review with a focus on reducing packaging.
It remains confident that such proactive measures will strengthen the group’s brand portfolio, to withstand against the lack of current consumer confidence.
On the markets this morning, the FTSE 100 has edged up 0.1% to 7,140.5pts.
PZ Cussons has plunged 15.1% to 234.8p on this morning’s profits warning.
Unilever is down 0.7% to 3,792.5p after its strategic update this morning.
Other fallers include Marston’s (MARS), down 1.6% to 102.2p, Hotel Chocolat (HOTC), down 1.4% to 342.5p and Just Eat (JE), down 1% to 755.8p.
Risers include McColl’s (MCLS), up 2.9% to 252p, Tesco (TSCO), up 2.5% to 215.6p, Greencore (GNC), up 1.9% to 129.5p and Fever-Tree (FEVR), up 1.8% to 2,858p.
Yesterday in the City
The FTSE 100 closed flat at 7,132pts yesterday, but there was plenty of movement in what is proving a dramatic week for grocery stocks.
Most notably Dairy Crest (DCG) plunged 7% yesterday back to 510p after house broker Peel Hunt issued a note warning of rising debt at the Cathedral City manufacturer.
Morrisons (MRW), which posted what were generally considered excellent financial results with rising sales and profits and lower debt, nevertheless dropped 4.9% to 215.3p largely on worries that gross margins had contracted.
Other fallers included Ocado Group (OCDO), down 3.2% to 578.2p, SSP Group (SSPG), down 1.9% to 616p and Sainsbury’s (SBRY), down 1.2% to 238.6p.
Also down were SSP Group (SSPG), down 1.9% to 616p, Hilton Food Group (HFG), down 1.7% to 816p and Premier Foods (PFD), down 1.5% to 38.5p.
Risers yesterday included Fever-Tree (FEVR), which bounced back 8.2% to 2,807p after its falls on Tuesday related to tightening margins despite a stellar jump in full year sales.
Also on the up were British American Tobacco (BATS), up 1.6% to 4,234p, Britvic (BVIC), up 1.5% to 688.5p, Imperial Brands (IMB), up 1.1% to 2,521p and Applegreen (APGN), up 1.4% to 504p.
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