British confectionery group Cadbury met forecasts with a 30 per cent rise in 2008 profits today and was relatively upbeat for 2009 despite the global slowdown, helping boost its shares.
The maker of Dairy Milk chocolate, Trident gum and Halls cough drops saw 2008 underlying sales rise 7 per cent but tempered its 2009 view, expecting sales growth this year towards the lower end of its 4 to 6 per cent medium-term target.
Chief Executive Todd Stitzer said he was "confident but realistic" looking into 2009 as other consumer goods companies around the world were forecasting lower growth this year.
"We are recession resilient not recession proof, with our own performance set to be resilient in a world of reduced growth," Mr Stitzer said in a conference call after 2008 results.
Cadbury shares rose 3.1 per cent to 524 pence by 8.15am as profits met expectations and analysts said the group had seen good growth and cut costs as confectionery markets around the world started to slow in the last six months.
"The defensive characteristic of its confectionery portfolio and progress made on its cost restructuring programme give us confidence in our 2009 forecast of double-digit earning growth at constant currency," said Cazenove analyst Polly Barclay.
The London-based group posted 2008 pretax profits of £559 million ($814 million), in line with an analyst range of £525 to £580 million and compared to a consensus of £552 million.
Stitzer added the group had seen good growth across all its businesses with chocolate sales up 6 per cent, gum 10 per cent ahead while candy increased 6 per cent. Its emerging markets, nearly 40 per cent of its business, saw growth of 12 per cent.
The group also reported higher 2008 margins, up 1.8 points to 11.9 per cent, with underlying margins up 1.5 percentage points and the rest of the increase coming from currency. It stuck by its goal to see mid-teen percentage margins by 2011.
The 2008 dividend rose 6 per cent to 16.4 pence a share.
Back in December, the group first warned of slower growth in the fourth-quarter as it saw sales rise 7 per cent in the first nine months as growth slowed in late 2008 in the United States and in European markets such as France and Spain.
Cadbury, which spun off its North American beverage business Dr Pepper Snapple last May, agreed in December to sell its Australian beverage business to complete its exit from soft drinks and to focus exclusively on confectionery.
Cadbury shares had outperformed the FTSE 100 by over 20 per cent in the last 12 months but underperformed the DJ Euro food and beverage industry by nearly 10 per cent.
Reuters