Unilever pays out dividend to help pensioners, but warns virus crisis means a ‘new normal’
Unilever is pressing ahead with its dividend despite warning that it faces a ‘new normal’ after the virus crisis subsides.
Chief executive Alan Jope said he expects the pandemic to prompt lasting changes in behaviour, with strong demand for cleaning products set to continue while the lockdown-hit dining industry could face a slow recovery.
The Marmite maker, which also owns brands ranging from Dove soap to Hellman’s mayonnaise, said sales of home goods in its food and hygiene businesses were strong but its restaurant supplies business had been hit hard.
Lasting changes: Unilever boss Alan Jope said he expects strong demand for cleaning products set to continue while the lockdown-hit dining industry could face a slow recovery
The business added that the lockdown had led to people washing their hair less often, failing to shave and using less deodorant, hitting sales of its beauty products.
Sales of ice creams such as Magnum have also been hit by the shutdown of popular tourist destinations across the globe.
Jope, however, said the FTSE 100 group’s balance sheet was ‘strong’ and that it had decided to join other big companies such as Tesco and Standard Life Aberdeen in pressing ahead with a quarterly dividend.
The payout – worth 36.1p per share to UK investors – will be welcome relief to income-starved savers, who have been hit by the cancellation of several dividends at other firms.
Jope said the decision to pay a dividend to shareholders was taken to help support pensioners who had been hit by cuts at other firms.
‘We sometimes think that dividends go to faceless institutions, but actually much of our dividend payout is what pensioners and retirees rely on as an income stream.’
Unilever said overall sales in the first quarter remained virtually flat at about £10.8billion, despite the virus crisis strongly boosting sales of some products.
Jope said it will be a long time ‘before people are back eating out at the level we saw pre-crisis’.
And he said that Unilever had ‘underestimated’ the boost the pandemic would give to its home food brands, with Hellman’s, Knorr stock cubes and Pot Noodle among those in demand.