CADBURY Plc, the world's largest candy maker, rose the most in 14 months in London trading after unexpectedly saying sales will beat its targets and profit margins are strengthening on price rises and cost cuts.
The shares rose as much as 6.7 percent after the London- based maker of Dairy Milk chocolate said profit margins will be about 1.5 percentage points higher than the previous year, Bloomberg News said.
Cadbury will cut jobs by 15 percent and move its headquarters to London's outskirts to bolster margins as surging dairy and cocoa prices raise costs across the food industry. Chief Executive Todd Stitzer will also face a stronger competitor when Mars Inc completes its purchase of Wm. Wrigley Jr. Co, which will likely create the world's biggest confectioner.
"It's a surprise disclosure which is significant and positive," Investec Securities analyst Martin Deboo said. "I will move my numbers up."
He said investors should be "cautious around a direct read-across" to full-year margins because margins fell in the first half last year.
The maker of Halls cough drops aims to lift candy sales by 4 percent to 6 percent annually, a goal it beat last year, and to widen profit margins to the "mid-teens" by 2011 from 10 percent in 2006.
"Today's (Thursday) statement implies that the second quarter has been strong," Citigroup analysts said in an e-mailed note to clients.