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UK confectionery and drinks group upbeat


UK sweets and soft drinks group Cadbury Schweppes on Wednesday shrugged off weakness in the U.S. beverages market to say it was confident of meeting its earnings target this year.

The maker of Dairy Milk chocolate and Dr Pepper soft drinks has a target of double-digit underlying earnings growth in 2001 - having reported an 11 per cent increase at the halfway stage. "Although the economic conditions are challenging and the outlook uncertain, we remain confident (we will be able to) meet our earnings growth and free cash flow targets," Chief Executive John Sunderland said in a trading update ahead of 2001 results.

Shares in the company, which have underperformed the UK food by almost four per cent in the year to date, were up two pence or 0.5 percent at 438p at 1515 GMT.

The company, which in July posted a 14 per cent increase in first half underlying pre-tax profits, said trading in the second half had been generally in line with its expectations.

However, the group said some softness had been seen in parts of its U.S. business since the middle of September.

The U.S. carbonated drinks arm, Dr Pepper/Seven Up, was now unlikely to show year-on-year growth, given the weakness seen in September and October.

Also, the sweets arm in the Americas had had a challenging second half - with volumes and profits down in both Canada and Argentina - with the result that profits from this region were expected to be "somewhat lower" than those of last year.

In the European confectionery business, overall sales and profits had been strong, especially in Russia and Poland.Cadbury Schweppes said the strong first-half performance in European beverages had also continued into the second half.

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