Cadbury (CBRY) has posted a 46 per cent leap in profits and insisted the future of its Bournville plant was secure despite vowing to take “whatever measures are necessary” in the face of a challenging economic backdrop.
Strong demand for brands such as Dairy Milk and the new Creme Egg Twisted Bar, as well as double-digit revenue growth in emerging markets, were behind the Birmingham-based confectionery giant’s first-half profit surge.
Cadbury, which dropped the Schweppes brand from its name when it spun off its drinks arm in May, said underlying pretax profits hit £223 million in the first half of the year.
The group also confirmed its commitment to delivering “mid-teens” profit margin growth by 2011.
Cadbury chairman Roger Carr said: “Against a background of more challenging economic conditions, we will take whatever measures are necessary in costs, prices, organisation structure and business portfolio to underpin and deliver the performance commitments we have made for 2008 and beyond.”
Despite the ongoing focus on costs, the company said there were no further plans to cut jobs at the Bournville site.
Cadbury spokesman Tony Bilsborough told The Birmingham Post: “The operation at Bournville recently had an investment into the factory and site and over the last few years, there has been a gradual reduction in headcount there through increased efficiency.
“There are no plans to reduce that further. We are committed to Bournville - it is one of our leading, if not the leading, factory.”
Cadbury announced last year it would shut its Keynsham plant near Bristol by 2010, axing 500 jobs, with much of the work going to Poland.
The decrease in headcount at Bournville - initially announced to be about 200 but subsequently reduced although the final figure was not revealed - has been achieved through voluntary redundancies.
It employs 50,000 people worldwide, with about half of its 5,000-strong UK workforce at the Bournville site.
Cadbury is pumping £40 million into its Bournville site, which will see new chocolate-making facilities installed by the end of the year and a new moulded chocolate bar production line set for the year after.
The group, which also owns Trident chewing gum, Green and Black’s and Halls cough drops, said yesterday it was facing an uncertain economic outlook and expected further increases in input costs in 2009.
Cadbury has upped its prices by three to four per cent in the past year in reaction to higher milk, cocoa and vegetable oil prices, as well as soaring crude oil prices.
But the firm said higher prices had not affected sales and it had seen no downtrading to cheaper products.
Cadbury chief executive Todd Stitzer said the group’s products were well-placed to help it weather a consumer downturn.
“No matter how bleak economies look, people always go for treats and that’s why we have seen no real slowdown in the first half and we see confectionery as a robust category in difficult economic conditions,’’ he said
Mr Stitzer said overall demand remained strong and he was confident further prices rises in 2009 would be enough to continue to offset rises in commodity prices.
Cadbury’s revenues in the UK rose by three per cent, helped by new launches including the expansion of its Trident gum range with the launch of chocolate-centred Trident Sweet Kicks in July.
The brand, Britain’s first chocolate-flavoured gum, is a mint-flavoured chewing gum filled with a liquid chocolate centre, aimed at women dieters looking for a “snack substitute”.