Cadbury says annual net profit drops 10 per cent

Cadbury, the British maker of confectionery, said its net profit dropped 10 per cent to €413 million last year, hit by restructuring costs.

Cadbury, which makes Dairy Milk chocolate and Trident chewing gum, said it expected revenue growth this year to be at the lower end of its forecast of between four and six per cent as a result of the global economic slowdown.

The company said its 2008 net profit figure compared with income after tax of €454 million in 2007.

Revenue last year jumped almost 15 per cent to €5.9 billion but profit was dragged down by an increase in restructuring costs linked to Cadbury's demerger of its US soft drinks unit American Beverages.

During last year, Cadbury saw sales of chocolate rise six per cent, gum 10 per cent and candy six per cent. Cadbury also makes Halls throat sweets.

"While we will not be immune from the continued weak economic environment, at this early stage this year, we expect to deliver revenue growth around the lower end of our four to six per cent goal range and to make good progress towards our goal of mid-teens margins by 2011," Cadbury's American chief executive officer Todd Stitzer said in the annual results statement.

Cadbury last year completed the demerger of American Beverages. Prior to the split, Cadbury was known as Cadbury Schweppes. The US business, which has been renamed Dr Pepper Snapple Group, is now listed on the New York Stock Exchange.

"Last year, Cadbury completed its transformation into a pure-play confectionery company," said Mr Stitzer.

"Our strong revenue growth and significant improvement in operating margin demonstrate the relative resilience of our focused business model," he added.

At the end of last year, Cadbury agreed to sell its Australian drinks arm to Asahi Breweries of Japan for €623 million.

The deal could, however, be scuppered by US drinks giant Coca-Cola, which has held a pre-emptive right of negotiation with Cadbury since it tried to purchase the business in 1999.

Coca-Cola has until this month to decide whether to make an alternative offer for the unit. Schweppes Australia is the second largest non-alcoholic ready-to-drink beverages business in Australia.