Cadbury confectionery sales sweeten

Cadbury Schweppes, the world's biggest confectionery group, which plans to spin-off its North American soft drinks unit next month said yesterday it sweets business had seen a strong start to the year.

The British group which makes Dairy Milk chocolate, Trident gum and Halls cough drops said its sales at its confectionery business grew seven per cent in the first-quarter of this year, while its North American beverage unit saw growth of three per cent.

"We have had a strong start to the year in confectionery, with revenues in the first quarter driven by excellent performances from our gum and emerging market businesses and higher pricing to recover increased commodity costs," chief executive officer Todd Stitzer said in a statement.

In Britain, confectionery sales grew just three per cent, and though Cadbury said it was pleased with Easter trading, its decision to limit aggressive discounting hit its market share.

The group added it was confirming its previous 2008 guidance for revenue growth at the two businesses and said the demerger process for its North American drinks unit was on track.

Cadbury held to previous guidance that it expects confectionery sales to grow at the upper end of its four-six per cent target range this year after a seven per cent rise last year and expects "meaningful" operating margin progress in this year from last year's 9.8 per cent towards its mid-teens percentage target by 2011.

Cadbury expects beverage revenue growth of between three and five per cent this year, after revenues rose four per cent last year, and modestly lower underlying margins this year.

Last October, Cadbury decided to spin off its North American drinks business, Dr Pepper Snapple Group (DPSG), which is to be listed in New York on May 7, while the standalone confectionery business, Cadbury, will trade from May 2 in London.