Cadbury could be sweet takeover target

CADBURY must improve profit margins and earnings or become a target for a takeover bid, analysts warned yesterday.

The warnings came as the Dairy Milk maker began trading as a stand-alone confectionery group on the London stock market.

It took its place after the demerger Cadbury Schweppes. The other half of the company, soft drinks group Dr Pepper Snapple Group will start trading in New York next week.

Graham Jones, an analyst at Panmure Gordon, said: "The key benefit of demerger is that there is now no hiding place from underperformance by Cadbury's management. If it fails to quickly deliver a significant increase in margins and earnings we see the group as a sitting duck for a bid."

Cadbury needs to boost margins towards the level of its US peers such as Hershey Co and Wrigley or it will be too tempting a target to resist .