Cadbury finds sweet comfort

Feb 26 2009 by Iain Laing, The Journal

CONFECTIONERY firm Cadbury has posted a 30% rise in annual profits after its key brands of Dairy Milk, Trident and Halls saw strong growth.

The £559m haul was slightly ahead of market expectations after underlying revenue improved 7% on 2007.

The performance was aided by a 5% UK sales rise after the relaunch of chocolate bar Wispa produced a record £25m sales since September.

Dairy Milk global sales were up 11% in the year, while Halls cough sweets grew 9% and chewing gum Trident 11%. Despite that, the company admitted it would not be immune to the downturn and said revenue growth this year was likely to be towards the lower end of its 4% to 6% target.

Cadbury, which spun off its US Dr Pepper drinks business last year, said it was making good progress towards mid-teen margins by 2011. The figure was 11.9% in 2008.

The company has stepped up cost cutting in measures such as the move of its central London headquarters and removal of a management layer.

In the UK, Cadbury sold 1.2 million Wispa bars in one week after the relaunch. The return followed a consumer campaign on networking sites. In the division for Britain, Ireland, the Middle East and Africa, underlying profits were 13% up at £173m.

Analyst Martin Deboo of Investec Securities said they were strong results. “While 2009 is more than usually uncertain, we continue to see Cadbury as a highly defensive business in demand terms and as having a credible restructuring plan.”