Cadbury Schweppes reports fall in profits but is optimistic

Cadbury Schweppes, the world’s No.1 confectionery company, announced a 9% fall in half-year pre-tax profits to £670 million and said restructuring costs and higher raw material costs were to blame.

However, UK sales were up 5% and the company was optimistic and said it would ride out the economic slowdown.

Cadury’s sales were increased by the drumming gorilla advert for Dairy Milk – it became the most watched on YouTube. Furthermore, the re-launch of Wispa and the new Trident chewing gum were also successful.

Todd Stitzer, chief executive, said although the economic outlook for 2008 remains uncertain, we are encouraged by the good trading momentum we have seen in the new year and our continued progress on cost reduction initiatives. We expect meaningful margin progression in 2008.

However, shares fell 33p to 579.5 as the company ruled out a payout to investors when its US drinks division. Dr Pepper Snapple Group, is de-merged later this year.

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