In January, Cadbury extended its contract with Coca-Cola Enterprises, the US bottler, to distribute Dr Pepper in the America. Last month it signed a pounds 183m joint venture in the US to buy two independent bottlers.
Drinks deals also complicated Cadbury's figures horribly last year. Pre- tax profits of pounds 987m were boosted by the pounds 442m sale of its stake in Coca- Cola Schweppes Beverages last year. But stripping out those proceeds, profits from continuing operations increased by 13 per cent to pounds 575m, bang in line with market expectations.
The key issue for Cadbury remains its Seven Up brand in the US. It is up against ferocious competition from the Coca-Cola owned Sprite brand, which has increased its share by 9 per cent to 6.7 per cent in the year. Seven Up, by contrast, has lost 0.2 percentage points of its share to stand at just over 3 per cent, though it has reversed the sales decline.
An additional problems could come from Pepsi, which owns Seven Up internationally but not in the US. It is trying to gain a toe-hold in the lemon and lime market and is currently testing a new brand called Storm. Cadbury's chief executive, John Sunderland, says no soft drinks brand launched in America since the War has managed to secure a market share of more than 1 per cent. He neglects to mention Surge, a recent Coca-Cola launch, which grabbed almost 1 per cent in its first year.
Even so, with Pepper performing above the market average, Cadbury needs only to stabilise Seven Up to keep investors happy.
There was more good news elsewhere with losses in the Russian confectionery start-up diminishing. Profits in the Far East have fallen due to the economic turmoil in the region but Cadbury may use falling asset values to make an acquisition. Management admits that it has looked at possible targets but not pursued them.
On current-year profit forecasts of pounds 630m, the shares, down 2.5p to 787p yesterday, trade on a forward rating of 19. A solid hold.