Love it or hate it, Marmite-making giant Unilever has navigated the lockdown admirably

Unilever shares took off like a dot.com on steroids upon the release of its latest update, covering the first half of 2020. The second part of that – the second quarter of the year – covered a period during which many of the markets in which the company operates were in some form of coronavirus-related lockdown.

Despite this, it was able to turn in a similar level of sales to those it achieved the previous year.

The gain of around 8 per cent in shares – good for nearly £10bn worth of value created – was driven by the fact that the company confounded the City’s scepticism in doing so.

Analysts had forecast a 7 per cent slump in the second quarter of the year. The actual result saw a decline of just 0.3 per cent, together with a nice increase in earnings.

What gives? The sharp downturns in sectors such as supplying restaurants, which saw a 40 per cent fall, and “prestige” beauty brands (ten per cent off in the second quarter) were offset by gains in other areas, such as food consumed in home (up 11 per cent in the first half, 17 per cent in the second quarter), and, of course, hygiene products. These boomed, with underlying growth of 17 per cent in the first half, 26 per cent in the second quarter.

Finance director Graeme Pitkethly talked of record growth and declines in different product categories and an unprecedented change to its business mix.

But while the swings and roundabouts were wild, the net result for investors was a happy visit to the playground with the good bits offsetting the bad.

The impressive part of the result is that it demonstrates Unilever’s ability to adapt and to rapidly update supply chains to cope.

When giant companies like this one talk about agility it’s often best taken with a pinch of salt. There is a reason that elephants don’t play basketball. But in this case, the tusker proved capable of a slam dunk.

An example of how this was achieved comes from one of the company’s facilities in Leeds where a plant making deodorant (a product which has seen a decline because, obviously, people aren’t going out) was repurposed to produce hand sanitiser. These products aren’t too different, largely as they are made up of similar chemicals such as alcohol. With the operation having the capacity to deal with that, the switch was possible.

The stock market does rather tend to get over excited in situations like this one, and the company was notably cautious about the outlook. Pitkethly observed that talk about a rapid recovery was “at the optimistic end of the range”.

The analysts’ prior pessimism can probably be put down to the sheer challenge of trying to get a handle on what’s going on during a big multi-brand operation. It’s possible they’ll be too optimistic about the next few months, with a corresponding backlash if Unilever undershoots. There may be a few more swings and roundabouts to come and they won’t all be favourable.

That said, some credit is clearly due to Unilever. The company’s ability to handle the situation with such relative aplomb bodes well over the medium to long term in the midst of an epoch in which the word “uncertainty” is never far away.

Investors seem to have taken the hint and life for them will get a little less complex with the company’s plans to unify its dual-headed structure.

If there’s a nasty in the numbers it is that Unilever is still making and supplying Marmite, a brand that inexplicably retains its devoted fan base.