New blow for Unilever investors

SALES at consumer goods giant Unilever slumped 4% in its latest quarter, heaping yet more bad news on long-suffering investors.

Just weeks after a devastating profit warning braced the markets for grim tidings, new boss Patrick Cescau said the company's July, August and September trading had been 'disappointing'.

'We are dissatisfied with our performance,' he said. Figures today showed its leading brands - at the heart of the company's famed five-year Path to Growth programme - had suffered a 0.9% sales decline in the quarter.

The Dove soaps-to-Magnum ice cream giant has been hit badly by the wet summer, which stopped people buying its ices and Lipton iced tea, and price wars in a host of its regions. Meanwhile, the Slim-Fast diet foods division in the US continues to be battered by the Atkins diet craze.

The company reduced its advertising and promotional budget during the quarter, shoring up profit margins, but it has recently been turning on the spending tap to 'reignite growth', said Cescau. That will batter profits in the short term.

Total turnover fell 4%, to e10.64bn (£7.38bn) from

e11.08bn a year earlier, while pre-tax profits hit e1.32bn against e1.34bn a year earlier.

As flagged in last month's profit warning, when it abandoned its targets of double-digit earnings growth, underlying earnings per share increased by only 3%.

Analysts have taken a progressively dim view of the company during the year, with the share price hitting rock bottom.

They reasoned that, even though market conditions were tough, the company appeared to be slipping behind its rivals in the consumer goods sector such as the ultra-aggressive Procter & Gamble. The two companies are engaged in a particularly bruising price war in India over detergents, echoing a similar previous clash in Latin America.

P&G has launched a wider assault over laundry products where Unilever's e1.5bn business is also being battered by supermarket own-label rivals.

Morgan Stanley has warned clients that Unilever has underinvested in its brands - a mistake that would take time and money to rectify.

Cescau is due to unveil a review into its markets and sectors in February. It will bring more realistic forecasts to the company's projections, particularly in Western Europe.

Company man takes helm

PATRICK Cescau has known no other working world than Unilever, though he has been to the four corners of the globe for the company he joined more than 30 years ago.

Today's figures are the first he has presented since becoming joint chairman. Whereas his predecessor, Niall FitzGerald, quickly established himself as a City grandee, Cescau has kept a lower profile.

A Frenchman, Cescau, is considered to be studious and reserved. Born in Paris, his first senior post at Unilever was as chief accountant in Germany. From there he went to Rotterdam to work in the fats and dairy unit before serving as finance director in Indonesia and boss of Van den Bergh Foods in Chicago.