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Cadbury Predicts Higher Candy Sales

Britain's Cadbury Schweppes said on Tuesday that it expected its confectionery revenue growth in 2007 to be above its target range of 4-6 percent and also to see modest margin improvement for the year.

The London-based company, maker of Dairy Milk chocolate, Trident gum and Halls cough drops, said in a trading statement that its plans to demerge its North American beverages business by the second quarter of 2008 at the earliest were on track.

The group added it expects commodity input costs to be 5-6 percent higher in 2008, but said it will seek to offset these increases through further price rises.

"Our continued strong confectionery performance reflects sustained investment behind growth and capabilities combined with a recovery in UK chocolate," said group Chief Executive Todd Stitzer in the trading statement.

Cadbury set out new targets in June this year for annual revenue growth of 4-6 percent and mid-teen percentage operating margins by 2011, driven by a 15 percent cut in its global workforce and number of factories by 2011.

Its North American Dr Pepper and 7Up drinks business outperformed the market and expects revenue growth of 4-5 percent and increased underlying operating profits.

In October, Cadbury said it would focus on demerging its 7-billion pound ($14.3 billion) North American soft drinks business and list it in New York after a world credit squeeze in the summer derailed a lucrative sale to private equity buyers.

On Monday, Cadbury said U.S. activist investor Nelson Peltz raised his stake in the group to around 4.5 percent from 3.47 through his investment vehicle Trian, and sources said he had
teamed up with Qatar Investment Authority to boost his stake.