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Unilever (ULVR)

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Dod101
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Re: Unilever (ULVR)

#318236

Postby Dod101 » June 13th, 2020, 10:14 pm

ADrunkenMarcus wrote:
dealtn wrote:The more important question, from Unilever investor's perspective is what do they do with that cash? What businesses do they want to grow, they see can have a higher ROCE than the Tea one, and will that be by brand acquisition, or not?


Precisely.

Best wishes

Mark.


It is a bit premature to be wondering about that since they have made no decision about what to do with Teas as yet, but most likely in some higher yielding product in emerging markets. They know their markets better than I. I am happy to leave it to them as I have for the last 25 years or so.

Dod

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Re: Unilever (ULVR)

#318239

Postby Gengulphus » June 13th, 2020, 10:36 pm

PinkDalek wrote:
Gengulphus wrote:On a somewhat pedantic point of detail, that's a bit too all-encompassing: the UK does not operate a withholding tax system on dividends, but it does operate a withholding tax system. It's on the PIDs paid by REITs, which are similar to dividends in most ways and often referred to as dividends, but are not actually dividends. So I'm making this point not because of any relevance to Unilever, but just as a warning against applying the "there's no UK withholding tax system" idea too broadly to other shares.

Equally pedantically, I've seen those such as British Land describe the tax deduction as a withholding tax but have yet to find such a description in the legislation.

Now that you've brought that point to my attention, does the legislation even define the term "withholding tax"? If not, its normal definition applies - see e.g. https://www.investopedia.com/terms/w/withholdingtax.asp, https://en.wikipedia.org/wiki/Withholding_tax or https://www.merriam-webster.com/diction ... ding%20tax - and the UK operates a number of other withholding tax systems, most notably including PAYE... In the context of investing in shares, though, the term is generally restricted to withholding tax on distributions from shares.

This is definitely a "matter arising" from discussing Unilever, rather than actually discussing Unilever, so I'll stop at this point.

Gengulphus

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Re: Unilever (ULVR)

#318263

Postby dealtn » June 14th, 2020, 8:34 am

Dod101 wrote:
ADrunkenMarcus wrote:
dealtn wrote:The more important question, from Unilever investor's perspective is what do they do with that cash? What businesses do they want to grow, they see can have a higher ROCE than the Tea one, and will that be by brand acquisition, or not?


Precisely.

Best wishes

Mark.


It is a bit premature to be wondering about that since they have made no decision about what to do with Teas as yet, but most likely in some higher yielding product in emerging markets. They know their markets better than I. I am happy to leave it to them as I have for the last 25 years or so.

Dod

Well that depends on your meaning of the word "yielding". Yield tends to be shorthand for "Dividend Yield" for some people. (Potential) ROCE would be a more likely measurement I would think in how Directors would choose to invest.

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Re: Unilever (ULVR)

#318264

Postby Dod101 » June 14th, 2020, 8:46 am

dealtn wrote:
Dod101 wrote:
ADrunkenMarcus wrote:
Precisely.

Best wishes

Mark.


It is a bit premature to be wondering about that since they have made no decision about what to do with Teas as yet, but most likely in some higher yielding product in emerging markets. They know their markets better than I. I am happy to leave it to them as I have for the last 25 years or so.

Dod

Well that depends on your meaning of the word "yielding". Yield tends to be shorthand for "Dividend Yield" for some people. (Potential) ROCE would be a more likely measurement I would think in how Directors would choose to invest.


Indeed. I was being a bit careless but the point is that I am not going to try to second guess the Directors. Let them get on with it.

Dod

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Re: Unilever (ULVR)

#323827

Postby TheMotorcycleBoy » July 5th, 2020, 9:47 am

https://www.proactiveinvestors.co.uk/co ... 22964.html

Nugget of truth or malicious rumour?

Dod101
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Re: Unilever (ULVR)

#323841

Postby Dod101 » July 5th, 2020, 10:35 am

TheMotorcycleBoy wrote:https://www.proactiveinvestors.co.uk/companies/news/922964/sell-unilever-as-growth-is-unsustainable-says-ubs-buy-reckitt-benckiser-instead-922964.html

Nugget of truth or malicious rumour?


I think a nugget of truth if only because RB is certainly ripe for a rerating after the very poor time it had under the previous CEO. Whether Unilever's growth is unsustainable I do not know. I will be not selling my Unilever but am glad to have top sliced it at £50 in June 2019. We may not see that again for some time.

Dod

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Re: Unilever (ULVR)

#323852

Postby monabri » July 5th, 2020, 11:11 am

Unilever
https://www.investegate.co.uk/CompData. ... R&tab=news

A wide range of views...!


RB.

UBS asset mgt trimmed their holding in RB. in March 2020 by 8.64%.

( Info from Simply Wall Street....10 free company views per month)

https://simplywall.st/stocks/gb/househo ... oup-shares

Image

A lot has happened in the last few months...maybe we will see UBS Asset Mgt topping up RB?

( I noted Fundsmith also reduced their RB holding).

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Re: Unilever (ULVR)

#323858

Postby Dod101 » July 5th, 2020, 11:36 am

I pay no attention to the views of analysts. Their guess is no better than mine.

Dod

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Re: Unilever (ULVR)

#323862

Postby ADrunkenMarcus » July 5th, 2020, 12:16 pm

I hold both RB. and ULVR:



They say past performance is no guide to the future, but I do not know the future and I only know their past performance. By the way, the figures above for RB. ignore the Indivior spin off in 2014 which I disposed of (it was a tiny holding) and the total return figure is just capital gain per share plus dividends so it assumes dividends have piled up as cash and not been reinvested. If the total return was done properly on a unitised basis (accumulation units, dividends treated as withdrawal so sells some units) you'd probably add a 0.5+ percent per year to the CAGR.

In terms of ULVR, its recent performance in terms of ROCE and operating margin is quite pleasing to me and are hallmarks of a quality business. There's little growth in the developed world but plenty in emerging Asia. I do think there are issues around brands and pricing power but I am sure these issues are well known to management. Their recent decision to domicile in the UK is evidence of their willingness to make changes. It is often thought of as being a bit sluggish but it's more than doubled for me since purchase in 2013 and this is chiefly due to fundamental growth in free cash flow rather than re-rating.

RB.'s Mead Johnson acquisition did not go to plan and they took a huge write off in 2019. It saddled them with lots of debt and trashed their clean balance sheet, so the ROCE has fallen steeply from the mid 20s to barely 10 percent. However, the operating margins have held up better and debt will hopefully come down over time. They are also reinvesting more into the business after some years of neglect and this will have a temporary depressive effect on margins.

I'd note that both companies are continuing to pay dividends. RB. is 3 percent of my folio and Unilever about 10 percent. I'm holding both!

Best wishes

Mark.

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Re: Unilever (ULVR)

#323872

Postby monabri » July 5th, 2020, 12:38 pm

The margins generated by RB have been consistently impressive over the last 10 years, better than ULVRs.

RB
http://financials.morningstar.com/ratio ... ?t=xlon:rb.


Unilever
http://financials.morningstar.com/ratio ... =xlon:ulvr

A plot of Total Return over the last 5 years - data from Hargreaves Lansdown comparator tool here

https://www.hl.co.uk/funds/fund-discoun ... ion/charts


Image

How much of the recent uptick in RB's shareprice has been Covid 19 bandwagon related (momentum buying) ? - the earnings forecasts suggest EPS will return to previous levels after quite a big drop off at the end of 2019. It is surely too early to judge the effect of a new CEO.

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Re: Unilever (ULVR)

#323895

Postby ADrunkenMarcus » July 5th, 2020, 3:59 pm

monabri wrote:The margins generated by RB have been consistently impressive over the last 10 years, better than ULVRs.


Yes, and this was typically true before then as well. My data goes back to 2000 and shows this as well - even though RB's 2019 loss drags the average down significantly. (I calculate it off the annual reports and just take the earnings reported, not adjusted.)



And here's the ROCE:


Unilever's 2018 ROCE is flattered in particular by one off revenue from the sale of spreads.

Best wishes

Mark.

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Re: Unilever (ULVR)

#328075

Postby idpickering » July 23rd, 2020, 7:12 am

2020 FIRST HALF YEAR RESULTS

Here; https://www.investegate.co.uk/unilever- ... 00088196T/

Also posted on HYP Practical Board.

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Re: Unilever (ULVR)

#332067

Postby idpickering » August 10th, 2020, 7:07 am

Unification of Unilever's Corporate Structure - Publication of Shareholder Documentation and Change of Dividend Date.

On 11 June 2020, Unilever announced plans to unify its Group legal structure under a single parent company, Unilever PLC ("Unification"). Unilever has today published a circular to shareholders of Unilever NV and Unilever PLC (the "Circular") and expects to publish a prospectus for Unilever PLC (the "Prospectus") during the course of today.

The Circular contains further information on Unification, the common draft terms of merger and, among other things, the notices of meeting for an extraordinary general meeting of Unilever NV and shareholder meetings of Unilever PLC.

The Prospectus will be published upon receipt of approval from the UK Financial Conduct Authority ("FCA") and will relate to the proposed listing of new Unilever PLC Shares on the premium listing segment of the Official List and to trading on the main market of the London Stock Exchange and the admission of the Unilever PLC shares to listing and trading on Euronext in Amsterdam.


https://www.investegate.co.uk/unilever- ... 00085713V/


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