Unilever shares jumped on Tuesday after the consumer staples company announced plans to emerge its Ice Cream business and cut 7,500 office-based roles globally.

Investors have long awaited a strategic action plan to boost the company’s profitability and that was delivered today in the form of the acceleration of its Growth Action Plan (GAP) announced last designed to streamline the business and reduce costs.

Unilever shares were 3% higher at the time of writing.

There are no concrete plans for the demerger which is expected to be completed by the end of 2025, however, a separate listing is a likley option.

After the demerging of the Ice Cream business, Unilver will operate four business units; Beauty & Wellbeing, Personal Care, Home Care and Nutrition.

“When the market was speculating about steps Unilever might take to revive its fortunes, a spin-off of its ice cream division had not been that widely discussed – even if political pronouncements from Ben & Jerry’s had provoked a meltdown among some investors,” said Russ Mould, investment director at AJ Bell.

“A side benefit of the brand exiting Unilever’s portfolio is it might quieten the ‘go woke and go broke’ noise but more widely the reasoning for the decision looks pretty sound. 

“It costs the company more to sustain the ice cream business, there is a different supply chain because it is dealing with frozen goods and it’s more seasonal than the company’s other roster of brands.

“A demerger and separate stock market listing for the ice cream arm is seen by Unilever as the most likely outcome with a fairly tight deadline of the end of next year set by the company. Less than a year into his tenure, CEO Hein Schumacher is certainly making his mark on the group.”

The slashing of the payroll to the tune of 7,500 will be completed over a three year period. The restructuring is thought to cost 1.2% of global turnover over the period.

Yü Group shares were firmly higher on Tuesday after the utilities company posted bumper 2023 results and provided an outlook that lays the foundations for further growth in the coming years.

Yü Group profits ballooned in 2023 as the business-focused utilities supplier’s revenue jumped 65%, and contracted revenue for 2024FY rose to £520m.

By all accounts, Yü Group’s 2023 results were nothing short of spectacular.

Increased customer numbers drove a whopping 439% increase in adjusted EBITDA to £42.6m, up from £7.9m in 2022. EBITDA margin exploded to 9.3% in 2023 from 2.8% in 2022.

Speaking with UK Investor Magazine shortly after the results were released on Tuesday, Yü Group CEO Bobby Kalar said EBITDA margins were expected to ease back next year but remain in the 7%—8% region—significantly higher than in 2022.

The company’s smart metering installations surged to 8,300 during the year, and the group said it is targeting 25,000 installations by the end of 2024. The company currently has a 1.4% market share of a £50 billion market, up from 1% in the prior year. Kalar said he expects market share to grow double digits each year in the medium term.

Although Yü Group shares have soared in recent years, the company is still undervalued compared to sector peers. Given the wave of takeovers of UK companies, we asked CEO Bobby Kalar if he was concerned the company may become a takeover target with earnings set for further growth in the future.

After today’s results, Yü Group trades at an EV/EBITDA multiple well below that of sector peers that have attracted suitors. In response, Kalar said that while a takeover approach is a concern for the ‘entrepreneurial’ company, as the founder and holder of 51.8% of the group’s shares, he remained committed to pushing forward with the company’s growth strategy as a publicly traded entity.

Yü Group shares were 5% higher at the time of writing on Tuesday.

The FTSE 100 started the week on the front foot, helped higher by Reckitt Benckiser and a strong session for mining companies.

However, London’s leading was down 0.1% at the time of writing after finding resistance at 7,750. Traders will eye a break of last week’s high of 7,775 for further gains in the index.

Reckitt Benckiser was the best performer as traders stepped into the stock after a sharp sell-off on Friday. Miners were also stronger following upbeat economic news from China.

“The FTSE 100 ticked higher at the start of the week with bargain hunters swooping on Reckitt after a big sell-off last week linked to baby food legal claims,” said AJ Bell investment director Russ Mould.

“Mining stocks moved higher as Chinese industrial production was above expectations. Given the world’s second largest economy is the most rapacious global consumer of commodities, the fortunes of the resources space are closely tied to its economic fortunes.

There was interest in Ocado shares which gained 2.8% and Beazley continued to tick higher.

US futures were also higher, helping lift the mood ahead of major central bank meetings this week. The Bank of England and the Federal Reserve will meet to decide on interest rates this week, and no change is expected in the benchmark rates.

Last year, the March meetings were earmarked for the first rate cuts by the BoE and the Fed. However, resilience in the US economy and persistently high inflation in the UK have pushed expectations of the first rate cut back to June.

“At one time, this week would have been pegged as the point at which central bankers in the US and UK pivoted to rate cuts but although that is now unlikely, the meetings of the Federal Reserve and Bank of England will still be watched closely for signals of when this pivot might finally come,” Russ Mould said.

Indeed, the timing of the UK’s first rate cut is still the subject of intense speculation. With inflation well above the BoE’s 2% target and the UK recession deemed only to be shallow, the reasons to cut rates aren’t present.

“The Bank of England will be minded to keep interest rates on hold when it meets on Thursday and there’s been no significant economic data which would prompt them to take action at this juncture,” said Laith Khalaf, head of investment analysis at AJ Bell.

“If anything the National Insurance cut announced in the Budget will probably raise some inflationary concerns. At the last vote in February two members of the Bank’s committee wanted to raise interest rates to 5.5%, so victory against inflation is not universally accepted by policy makers.”

The major drivers for FTSE 100 stocks will be the commentary accompanying the rate decision and the Bank of England’s economic projections and the shift in the language around inflation.

Currys shares rose on Monday after increasing profit guidance for the year and conforming neither Elliot nor JD.com had made formal offers, and the allotted time period to do so had now ended.

The group said like-for-like sales in the UK & Ireland and Nordics are positive and increased profit guidance to £115m.

This will be welcome news for investors who now face the prospect of Currys continuing by itself after the two potential bidders pulled out.

“Its two suitors may have walked away, but Currys has started the week with its head a bit higher, by raising its profit forecasts for the year. Shares slid on Friday after the news that JD.Com was joining Elliott Investment Management in backing out of potential takeovers and they made up a small bit of ground in early trading,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.

“The board was steadfast in its view that the offers priced the company too low, given that it’s partly the current economic climate which is to blame for its lacklustre performance.  Today’s figures give a little more weight to their opinion, with the retailer upping pre-tax profit forecasts to at least £115 million, up from the previous range of £105-115 million, but there is clearly more work to be done.”

Currys takeover interest may have been a surprise for market participants given the generally poor conditions for consumers. However, the opportunistic bids will make more and more sense if Currys can build on today’s guidance upgrade.

“Consumer electronics has been a challenging place to be, with shoppers’ spending power under pressure, but with inflation set to fall and interest rate cuts eyed on the horizon, there are hopes that these headwinds are subsiding, amid some signs of ‘encouraging momentum’,” Streeter said.

“There are also bright spots emerging for the group’s services channels which have the potential to make customers more sticky, with Chief Executive Alex Baldock underlining that the group was selling more solutions and services that boost margins.”

Currys shares were 3.45% higher at 58.5p at the time of writing.

Rightmove has released positive data on the UK housing market, pointing to prices rising at the fastest pace for 10 months.

Rightmove said the average asking price is up 1.5%, equivalent to £5,279 this month, to £368,118.

“Today’s data shows that the property sector is showing signs of recovery and the outlook has considerably improved,” said Daniel Austin, CEO and co-founder at ASK Partners.

Righmove’s data is consistent with measured improvements in the UK housing market announced by Halifax and Nationwide.

The impact of lower mortgage rates and an easing of the cost-of-living crisis is bringing more buyers back to the market.

“Now that balance is being better struck and with interest rates remaining stable, we are seeing signs of normality and strong overall indicators now is an attractive time to buy or sell property,” said Nathan Emerson, CEO of Propertymark.

“Our member agents have reported an 80 per cent increase in the number of new properties available and a 129 per cent increase in the number of market appraisals undertaken, showing there is growing appetite amongst buyers and sellers alike.”