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Earnings Analysis: 
Cadbury Profit Declines 2%
Author: 123jump.com Staff
123jump.com
Last Update: 3:32 PM EST February 20 2008


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Cadbury Schweppes revenues rose 7% to £7.9 billion from £7.4 billion in 2006 as base business revenues in the confectionery business jumped 7%, while the American beverages unit grew revenues by 4% despite the challenging business environment. Underlying earnings per share for the year declined 4% to 30.2 pence from 31.6 pence a year earlier. The company’s annual dividend rose 11% to 15.5 pence from 14 pence.

 
Britain, Ireland, Middle East and Africa

Base revenues in Britain, Ireland, the Middle East and Africa rose 6% with Cadbury Nigeria and Dandy Products in South Africa that were made in 2006 contributing £11 million in revenues.

Europe

Revenues in Europe, which were up 7%, were driven mainly in gum were revenues climbed 11%. Centre-filled was launched in Russia, Turkey, Spain and Portugal under the Dirol and Trident brands.

Asia Pacific & Emerging Markets

Revenue growth in Asia was at 4% while emerging market rose 14%.

The net impact of acquisitions in developed markets stifled revenues and reduced revenue growth by £3 million.

Among emerging markets, revenues in India grew by 20%.


Demerger of Units

Cadbury said the demerger of the confectionery and the beverages units are expected to be completed by the end of the second quarter of 2008.

In line with the preparations, the company has announced that Roger Carr, currently Deputy Chairman will be appointed Chairman of the new confectionery company, Cadbury plc and Wayne Sanders, former President and CEO of Kimberly-Clark, will be appointed Chairman of the new beverages company, Dr Pepper Snapple Group, Inc.

Outlook

Cadbury plans to grow base business revenues towards the upper end of the 4% to 6% range and commodity input costs are expected to be 5% to 6% higher in 2008. The company also plans to report significant margin growth by 2011.
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