August 4, 2008
Cadbury Turns in Much Fatter Profits
Dairy Milk maker Cadbury yesterday posted a 46 per cent leap in first-half profits and said it would take "whatever measures necessary" to combat commodity cost rises.
Strong demand for brands such as its Dairy Milk chocolate and the new Creme Egg Twisted Bar helped to drive the rise in underlying pre- tax profits to Pounds 223m, said Cadbury.
But the group, which spun off its drinks arm in May and dropped the Schweppes brand from its name, said it was stepping up its cost- cutting efforts to tackle challenging conditions and input price increases.
Cadbury has already increased prices by between three per cent and four per cent in the past year. These will be looked at again as part of a review to ensure it meets goals to grow revenues and achieve "mid-teens" profit margins growth.
Staff numbers will also be reviewed, the group confirmed.
Cadbury chairman Roger Carr said: "Against a background of more challenging economic conditions, we will take whatever measures are necessary in costs, prices, organisation structure and business portfolio to underpin and deliver the performance commitments we have made for 2008 and beyond."
Sales in the first six months of the year were ahead of the group's targets, up 7.3 per cent on a like-for-like basis.
Cadbury expects revenue growth at the top end of its four per cent to six per cent range, despite soaring input costs of up to six per cent this year, which will be weighted towards the second half, it said.
Cadbury spent Pounds 52m more on marketing - at Pounds 297m - to help sales.
Revenues in Britain rose by three per cent, helped by its move out of less-profitable promotions and new launches, including expansion of its Trident gum range, with a chocolate-centred Trident Sweet Kicks and other centre-filled flavours.
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