Cadbury continues momentum in first half

by Eric Schroeder
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LONDON — Cadbury P.L.C. said it has built on its strong first-quarter performance with improved trading in April and May, leading the company to forecast improved growth and cost efficiencies for the full year. The company reconfirmed its full-year guidance for revenue growth in the lower end of the 4% to 6% range.

"Our Britain and Ireland business sustained its strong performance owing to the excellent growth in the U.K., which offset tougher trading in Ireland," said Andrew Bonfield, chief financial officer, in a June 18 trading update conference call with analysts. "Cadbury U.K. continued to gain share in seasonal chocolate products due to a very successful Easter, which lasted into April, but also in standard product helped by the continued success of Wispa and our new bite-sized peanuts, raisins and custards.

"Conditions in Europe, however, remain challenging. Gum and candy category growth has been weak in France and Spain, although we have gained share in gum year-to-date in those markets. However, in Russia challenges with our distribution network continue to hold back our revenue growth. Our Middle East and Africa business grew well with a strong performance in South Africa and improved growth in Nigeria.

"Turning to Asia, the pace of growth of our business there has been very satisfactory, led by strong revenue growth and continued market share gains in India. Our Pacific business benefited from good seasonal chocolate sales in Australia and an improved candy performance from the recent Sansei acquisition in Japan.

"The relaunch of Cadbury Dairy Milk in Australia is now under way, although it is very early days to comment on results.

"Revenue in North America continued to recover from the impact of destocking in the U.S. early in the first quarter, and underlying market growth there has remained positive. In Mexico, growth has slowed from the high levels achieved in 2008, in part reflecting a small negative impact from the swine flue situation."

Cadbury will issue its 2009 first-half results on July 29.

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