Cadbury profits rise after UK boost
Sweet-toothed consumers in the UK and a fall in advertising costs helped Dairy Milk owner Cadbury report a rise in half-year profits today.
Revenues rose 4 per cent on a constant currency basis after growth in the UK and emerging markets offset difficult trading conditions in Europe.
Margins were also higher due to ongoing cost cuts and the impact of the advertising recession on the company's marketing costs, which fell to 10.7 per cent as a percentage of sales - against 11.6 per cent a year earlier.
Cadbury reported underlying profits before tax of £262 million for the six months to June, an increase of 11 per cent at constant currency rates on a year earlier.
Chief executive Todd Stitzer said: "We made good progress in the first half in challenging trading conditions."
Cadbury stuck by its full-year target for revenues growth of around 4 per cent, but said it now expected a stronger improvement in margins, partly as a result of media deflation continuing into the second half.
Absolute investment in marketing will be broadly equal to last year, having spent £271 million in the first half, down slightly on £282 million a year ago.
In Britain and Ireland, revenues grew by 12 per cent in the first half to £635 million, with underlying profits up 36 per cent to £79 million.
Trading was helped by new versions of existing products, such as Wispa, Giant Buttons and bite-size Clusters. Seasonal revenues benefited from a longer Easter selling period and strong market share gains.
In emerging markets, sales growth was 7 per cent after strong performances in India, South Africa and South America.
Cadbury last year returned to its roots as a pure confectionery company when it spun off its North America-based Dr Pepper drinks business.
The group has also been taking on the chewing gum industry head to head, with further efforts to push its Trident brand.
Cadbury also owns the Green & Black's chocolate brand and Halls lozenges.
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