Missed targets jolt Unilever recovery

UNILEVER'S much-trumpeted path-to-growth strategy has turned into a hard slog as the food and detergents giant warned for the second time this year that its leading brands would again miss their targets.

The news sent the shares reeling 34p, or 6%, to 490p as some analysts began trimming their forecasts for this year and next.

The group said today that revenue growth at its leading brands, including Knorr, Persil and Lipton, would come in below 3% for this year.

That will be another blow to Unilever's five-year plan under co-chairman Niall FitzGerald to boost the group's long-term performance by concentrating on its key household names.

Unilever was forced to lower its original growth target for leading brands from between 5% and 6% earlier this year after it blamed destocking problems and a fad for the Atkins diet for a disappointing first-half.

In addition, its perfumes brand Calvin Klein was hit by a sharp drop in airline travel.

Although the group has benefited from strong growth in developing countries as well as buoyant ice cream sales in Europe this summer, these have failed to offset decline elsewhere.

But with another year left before the completion of its five-year plan, FitzGerald hopes to get back on track in 2004. Unilever is also sticking with its forecast to boost earnings, before one-off charges, by 'low double-digit' due to additional cost-cuttings and lower tax.