BTEC Business Report: Cadbury Financial Performance and Analysis

This report provides an analysis of Cadbury's financial information and sales data, focusing on the period around 2010 and the Kraft takeover. The report examines key financial metrics such as revenue growth, restructuring charges, and the impact of currency movements. It also discusses the controversy surrounding the takeover, including the closure of a factory and job losses. Furthermore, the report delves into Cadbury's sales volumes, price increases, and the concerns raised by analysts regarding the company's performance. It also touches upon the legal and ethical issues in business communication and the operational aspects of the company's financial strategies. The analysis includes details about the company's response to market changes, product mix adjustments, and the impact of these factors on revenue and profit margins. The report aims to give a comprehensive overview of Cadbury's business performance during this period.

CADBURY
Finanacial information and sales data of organisation
Todd Stitzer was on feisty form on Wednesday. Waving
bars of Wispa and Cadbury Dairy Milk chocolate in the
air, the Cadbury chief executive took pains to stress that
the former weighed 10g less than the latter. The
difference between a chocolate bar weighing 39g and one
weighing 49g was of great concern to Mr Stitzer as he
attempted to assuage concerns over a 3 per cent drop in
Cadbury’s sales volumes in the third quarter. Although
Cadbury’s quarterly revenue growth and full-year
financial forecasts were better than expected, analysts
questioned aspects of the company’s financial update,
with some suggesting that a strong quarter did not
necessarily indicate strong trading in 2010. Kraft is
expected to seize upon weaknesses in the update as it
considers raising its offer for Cadbury. The group
reported 7 per cent revenue growth, mostly derived from
raising prices and changing the mix of products, such as
selling higher margin sugar-free gum. Analysts
expressed concerns about the drop, which extended the
1-2 per cent slide in the first half.
Back in 2010, Kraft’s £11.5 billion hostile takeover
of Cadbury sparked controversy. But some were
won over by the American company’s “sincere
belief” it would reverse a decision by Cadbury to
close a key factory at Somerdale, near Bristol.
Within weeks of the takeover going through, Kraft
announced it was going to close the factory. Four
hundred jobs were lost.
Cadbury rose 3 pence, or 0.5%, to 628 pence in
London trading. The stock has declined 8.5% in
2008 and 21% from its record peak in May 2007,
when investors expected a sale of the US beverage
unit to a private-equity firm.
''The group has been passing on higher commodity
costs through strong price increases,'' Ian Kellett, an
analyst at Numis Securities with an ''add'' rating on
the shares, said in a research report. ''We see no
reason for trading to soften.''
Cadbury, which spun off its US soft-drink unit in
May, will report 80 million pounds of restructuring
charges in the first half, and expects to report a
similar amount in the second half. Currency
movements will boost sales and operating profit by
about 7% in the first half.