Cadbury Schweppes shares have climbed to 17-month highs after the world's biggest confectioner said it would return to growth this year and US investor Mr Warren Buffett revealed a small stake in the firm.
Cadbury said today tough trading eased in the fourth quarter amid demand for its Dr Pepper drinks and relaunched Dairy Milk bars and that it had made a good start to 2004.
"The outlook for 2004 is encouraging," chief executive Mr Todd Stitzer told reporters, adding the maker of Trident sugar-free gum and Snapple drinks would lift profits this year after a flat 2003 when it digested the purchase of US sweets firm Adams.
Cadbury welcomed news that Berkshire Hathaway, the investment vehicle of Mr Warren Buffett, had bought 10 million shares in the firm, which it saw as a "value investment" rather than the prelude to takeover.
Though Mr Buffett's stake is only about 0.5 per cent of Cadbury's issued share capital, it puts him among the firm's top 10 institutional investors, according to Reuters data.
It was also viewed by analysts as an influential thumbs-up from a man dubbed the 'Sage of Omaha' for his string of successful investments, particularly in consumer goods firms.
Cadbury, which also makes 7-UP fizzy drinks and Milk Tray chocolates, struggled in 2003 with an abnormally hot summer in Europe, which hit chocolate sales, while its key drinks market in North America was hit by unusually cold weather. At the same time, it was integrating its $4.2 billion purchase of Adams.
Cadbury announced plans in October to cut 5,500 jobs and save £400 million a year from 2004 to 2007, sharpening up its operations after a three-year, £4.9-billion spending spree. At the same time, it unveiled targets to boost net sales by three to five percent and margins by 50-75 basis points.