Cadbury Schweppes posts profit despite 'challenging year'

20-02-2007

Cadbury Schweppes posts profit despite 'challenging year'
Cadbury Schweppes has reported a rise in pre-tax profits for 2006 of nine per cent, riding out some adverse publicity after food scares in the UK.

Confectionery revenues at the food and drink industry giant proved resilient, rising by four per cent, with chewing gum sales among the key drivers of growth, rising ten per cent on 2005.

A newcomer to the UK, Cadbury's Trident gum was a notable winner in the results, as revenues grew by 23 per cent compared to the previous year.

Emerging markets and innovation in new products also contributed to a healthy bottom line and, while the share price remained subdued this morning in early trading, the figures will come as a welcome relief after some difficult moments last year.

Chief among these were the salmonella scare in the UK which forced the firm's Cadbury brand to withdraw millions of chocolate bars from circulation and also problems in Nigeria, where an accounting overestimation resulted in £23 million being wiped off the current standing.

Chief executive Todd Stitzer said 2006 was a year of "significant progress", despite the challenges.

"Our underlying results reflect the scale of changes made in the last three years to strengthen our business, reduce our cost base and focus on higher growth categories and markets.

"We start 2007 with optimism and are continuing to invest behind growth, with a strong innovation pipeline including the launch of Trident, our global gum brand, into the UK."

Trident launched in the UK last week and the firm sees the popular brand as a potential big player in the market.

Cadbury Schweppes holds the number one chewing gum share in a number of European countries including France, Spain, Denmark and Switzerland.



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