BUSINESS LIVE: Lloyds raises dividend; ITV rises on Love Island; Unilever sales disappoint

Unilever has reported lower-than-expected underlying quarterly sales as the consumer giant failed to win back customers it had alienated in recent years through higher prices.

The maker of Dove soap and Hellmann’s condiments reported a 3.9 percent increase in underlying sales in the second quarter, missing the average analyst forecast of a 4.2 percent increase in the company’s consensus.

Underlying price growth for the quarter was 1 percent, below market expectations. However, underlying sales volume growth was higher than expected at 2.9 percent.

“Much remains to be done, but we remain focused on transforming Unilever into a consistently outperforming company,” CEO Hein Schumacher said in a statement.

Shore Cap Research Analyst Gary Greenwood:

Lloyds’ second quarter results show a PBT excess of 7 per cnet, thanks to a lower than expected impairment charge. Again, the forecast has been revised upwards.

‘That said, we think the market may be disappointed by the lack of net interest margin improvement and an improvement given higher longer-term interest rates. At the same time, we note that TNAV per share disappointed due to an upward shift in long-term interest rates, which negatively impacted the cash flow hedge reserve.

‘After a strong rise, the shares are now trading at a price close to our fair value of 62p.

‘Consensus earnings could rise slightly, but the market may be disappointed that there is not a bigger increase given the recent strong rally in stocks.’

ITV saw total advertising revenues rise by 10 percent in the first half of the year. That is more than expected. The 2024 European Championship and Love Island in particular proved to be particularly lucrative for the channel.

Chief executive Carolyn McCall said the performance of ITV’s digital advertising business continued to improve in the six months to 30 June and the group saw a 17 per cent increase in digital advertising revenue, contributing to double-digit growth in total advertising revenue.

“This was driven by strong viewing figures across our channels and (streaming platform) ITVX, with a very successful European Championship, a year-on-year increase in viewing figures for Love Island and a series of great dramas,” she said.

McCall said ITV is confident it will grow full-year adjusted earnings before interest, tax and depreciation (EBITA), following a year of peak net investment in 2023, and is on track to meet its key performance targets for 2026.

Lloyds Banking Group has raised its interim dividend by 15 percent after pre-tax profits fell 14 percent to £3.3 billion, beating expectations. Lending margins held up despite increased competition.

Analysts had expected the lender to report statutory pre-tax profits of £3.2bn for the six months to the end of June.

Britain’s biggest mortgage lender reported a net interest margin of 2.94 percent for the first half of its financial year, a key profit measure that measures the difference between what the bank pays to savers and what it charges to borrowers, in line with forecasts.

The company promised to pay an interim dividend of 1.06p per share, up 15 per cent on the previous year and equivalent to £662 million.

Lloyds has made no further provision for the regulatory investigation into excessive charges by lenders for car finance. The bank has already set aside £450m to cover potential damages.