Cadbury plans cost cuts, drinks sale

LONDON: Cadbury Schweppes, the world's largest confectionery group, said it planned to cut 15 per cent of its jobs and factories and was more likely to sell than spin off its American drinks unit.   

The British group said on Tuesday its new confectionery strategy would mean cuts in its 50,000 workforce and 60 factories to drive through efficiencies as it emerges as a pure confectionery player similar to its US rivals.   

The London-based company, maker of Dairy Milk chocolate, Trident gum and Trebor mints, was announcing its confectionery-alone strategy as it decided on a likely sale of its Dr Pepper and Snapple drinks business and a return of capital to shareholders.    

The group, to be renamed Cadbury Plc after the expected drinks sale, raised its annual revenue growth goal to 4 to 6 per cent from 3 to 5 per cent and aimed to lift trading margins to the mid-teens percentage by 2010 from 10.1 per cent in 2006.   

The company said it had made a strong start to 2007 in both confectionery and beverages.   

Cadbury said a sell-off of its drinks business would probably offer the best value for shareholders. Analysts say private equity groups are the most likely buyers of the business worth up to 8 billion pounds ($15.9 billion).   

Cadbury shares closed on Monday at 706 pence.