Cadbury fights Kraft takeover with upbeat trading statement

by Jennifer Whitehead, Brand Republic 21-Oct-09, 09:10

LONDON - Cadbury, the maker of Dairy Milk chocolate, has said it expects to beat forecasts on revenues and profit margin, in what is likely to be its final shot at dissuading US food giant Kraft from making a hostile bid for the company.

It is the last trading statement Cadbury will make before Kraft decides whether or not it will pursue the £10.2bn hostile takeover bid that it first outlined in September.

Kraft has been given a deadline of 9 November to "put up or shut up" by the Takeover Panel. It is expected to wait until after its own results are out on 3 November to make an announcement.

Given the circumstances, the City was always expecting an upbeat statement from Cadbury, and the company did not disappoint.

Cadbury now expects 2009 revenue growth in constant currency to be around the middle of its goal of 4-6%, compared with the 4% that analysts had predicted, while its underlying operating margin is expected to be 13.25% compared with 11.9% in 2008.

Since Kraft said it was interested in buying Cadbury, the company has invested in promotions to shift more product in the UK and it reported today that sales in the UK and Ireland were up by 10%. Emerging markets also delivered strong sales growth for Cadbury.

Shares in the company were trading at 801p at the time of writing, up 2.5p on yesterday's close. The £10.2bn Kraft bid represents a price of 745p per share.

Roger Carr, chairman of Cadbury, said: "The strength of our operating performance continues to underpin the board's confidence in both our growth prospects and the potential for creating further, material shareholder value as a pure play standalone confectionery business."

Comments

Victor Guillen - 21/10/2009

It would be very interesting to have Cadbury as a member of Kraft Foods. It will be a great competitor in chocolate sector against Nestlé and Hershey with brands like Cadbury, Milka, Toblerone, Lacta and Suchard.