Cadbury trading results put the pressure on Kraft
Takeover target Cadbury turned up the heat on its US suitor today by lifting revenues guidance in the wake of an "excellent" quarter of trading.
The Birmingham-based confectionery firm, which last month rejected a £10.2 billion proposal from Philadelphia and Oreos firm Kraft, reported 7% growth in sales, up from 2% and 6% in the previous two quarters.
It said revenues for the full year were now expected to be "around the middle" of its 4% to 6% range.
Roger Carr, chairman of Cadbury, said the third quarter performance reaffirmed its confidence in remaining a "standalone confectionery business".
Cadbury also increased annual profit margin targets - to growth of 135 basis points - while currency benefits from the weak pound are now expected to increase underlying earnings by around 9% and net revenue by around 7%.
Cadbury's confident third quarter statement comes as its American pursuer Kraft is widely speculated to be working on an improved approach.
Kraft has been issued with a "put up or shut up" deadline by the City takeover authority, with a deadline to either make a firm offer or not to bid for Cadbury by 5pm on November 9.
Reports late last month suggested Kraft was working on an £11 billion hostile bid for the Bournville chocolate giant.
Cadbury slammed Kraft's initial proposal as "fundamentally" undervaluing the business and for being of "uncertain value" for Cadbury's shareholders.
In a show of financial strength today, the firm revealed the best performance so far this year.
Todd Stitzer, Cadbury's chief executive, said: "We have great momentum in our business and our confectionery strategy continues to yield benefits beyond expectations.
"In the third quarter we have delivered growth in every category and every business."
But the figures revealed that price increases were offsetting a 3% fall in sales volumes in the three months to September 30.
In the UK, where it hiked prices in the second half of last year, revenues grew 10% thanks to the launch of products such as Wispa Gold.
The firm has increased prices globally to combat soaring costs of its key raw materials - cocoa and sugar. There have been reports the group is considering decreasing the size of its chocolate bars to help keep input costs down while avoiding price rises.
