The relaunch of UK confectionery and soft drinks maker Cadbury Schweppes’ Dairy Milk range in its domestic market contributed to growth in turnover in it first half ended 12 June 2004.
Last year, Cadbury gave a makeover to products such as Crunchie, Fruit & Nut and Caramel, which led to a 3% increase in sales, helping Cadbury Trebor Bassett to cling on to its UK market share of 31%, some 11% ahead of its closest rival (source: Nielsen)
The world’s largest confectioner posted a 2% rise in half-year profit while sales growth was towards the lower end of its target range. Rising costs and the weak dollar hampered further growth. Profit before tax fall by 10% in the period under review to £265m (US$488m), as it was hit by higher restructuring costs and the impact of the exchange rate on its US soft drink business.
Basic earnings per share (after goodwill/intangibles amortisation and exceptional items) fell by 8% to 8.5 pence principally reflecting the increase in exceptional items (largely driven by business restructuring) and goodwill amortisation arising on acquisitions.
However, the company saw sales at £3.0bn, which were 9% higher than last year, and 14% above prior year at constant exchange rates. Acquisitions, net of disposals, contributed 11% to revenue growth.
Todd Stitzer, chief executive officer, said: “I’m pleased to report a good first half performance with results in line with expectations. Our focus on innovation and marketplace execution have driven sales growth and share gain, particularly in our US carbonated soft drinks business, our UK confectionery business and our major gum operations around the world. The Adams integration is on track and the business is performing well.
“Fuel for Growth [the company’s cost reduction programme] is delivering as expected and we are achieving margin growth despite some above inflation cost increases. Although we have a number of challenging integration projects in the second half, we remain cautiously optimistic about the outcome for the full year and expect to deliver results within our goal ranges.”