Britain's Cadbury Schweppes today reported a 20 per cent rise in half-year profit and put the cost of a salmonella-related chocolate recall in June at £20 million (€29.2 million) for 2006.
The world's largest confectionery group posted underlying pretax profit in the six months to June 30th of £402 million (€588 million), in line with market forecasts.
Cadbury said in late June it was recalling more than 1 million chocolate bars in Britain and Ireland because of minute traces of salmonella, while British authorities later said this was the most credible reason for a recent outbreak of salmonella in Britain.
"We expect to deliver revenue growth towards the upper end of our goal range for the full year but are still monitoring the trading impact of the UK product recall," chief executive Todd Stitzer said in a results statement.
Cadbury reported half-year underlying sales growth of 4 per cent and operating margins up 10 basis points, against its targets of a 3 to 5 per cent rise in annual sales and a 50-75 basis point increase on margins.
Cadbury said in the last four weeks the product recall had an effect as it lost market share of 1.1 per cent in an overall UK confectionery market down 7 per cent, due largely to a heatwave in Britain during July.
The group also announced what it called a significant increase in UK marketing and the launch of a number of new products to try and overcome the effect of the product recall.
Cadbury shares have performed poorly this year, sliding from a high of 595 pence in March to end on Tuesday at 521p, and have underperformed the FTSE 100 index by 10 per cent this year due largely to poor European trading in the first quarter.