Express Mortgages Express Loans Bingo Lose Weight Franchising Dating Shopping Book Shop Find Spare Parts Cut Your Bills Wine Shop Legal Store FlatShare Cruises

PRICE RISES SWEETEN PROFITS FOR CADBURY

GOING STRONG: Stitzer says momentum has put Cadbury in a good place

Friday June 20,2008

By David Shand

CONFECTIONERY giant Cadbury yesterday played down talk of a merger with US rival Hershey as it provided a tasty half-year trading update, boosted by price rises and strong chewing gum sales in America.

Chief executive Todd Stitzer denied it would have to arrange a tie-up to fight off increased competition after the merger of Wrigley and Mars.

He said: “We don’t feel we have to do a deal. The outlook is very strong and we have great momentum going into the second half.

“We’re off to a strong start as a focused confectionery business and expect first-half revenues above our goal range and good progress on margins.

“These results will demonstrate the strength of our total confectionery platform, the benefits of the significant investments made in recent years and the potential of the business.”

Stitzer predicted second-quarter revenue growth slightly above the 7 per cent like-for-like figure reported in the first three months.

The Dairy Milk maker, which spun off its American soft drinks business Dr Pepper Snapple last month, has stepped up its market investment to drive sales, a tactic some analysts believe is designed to increase its attraction to a predator such as Hershey or US food giant Kraft.

But Cadbury has also improved profit margins by raising the cost of products to counter soaring fuel and cocoa prices.

Stitzer highlighted strong growth in sales of chewing gum brands Trident and Stride in America, where sales of Halls cough sweets have also picked up.

Gum and candy sales have also been strong in Latin America but market growth has been slower in southern Europe.

Stitzer said Cadbury faced a tougher task over the rest of the year because last year’s second-half performance was strong.

He pleased investors, though, by sticking with the company’s prediction for commodity cost increases of between 5 and 6 per cent for the year.

Cadbury shares rose 3p to 628p.