Unilever to Increase Dividend Payout

It took an approach from Kraft Heinz to spark management into life, but the results of Unilever’s strategic review suggest that the company is moving in the right direction

Philip Gorham 18 April, 2017 | 12:37PM

It took an approach from Kraft Heinz to spark management into life, but the results of Unilever’s (ULVR) strategic review suggest that the company has finally grasped the competitive challenges it faces. We welcome the overdue measures to leverage its wide economic moat and extract more cash from the business, and we think the new financial targets are, for the most part, achievable.

It will initiate a €5 billion share-repurchase programme and raise the annual dividend by 12% this year

When Unilever announced that it was to undergo a strategic review in response to the acquisition attempt by Kraft Heinz, we said in a note on February 22 that we would like to see three outcomes: 1) an acceleration in cost-reduction initiatives; 2) asset sales, particularly of the spreads business; and 3) increased shareholder returns. Unilever has delivered all three.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Unilever PLC4,306.00 GBX0.54

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Philip Gorham  

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