Cadbury PLC, the world's biggest candy maker, said it was on track for full-year earnings after reporting second-quarter sales growth that exceeded its targets on Thursday.
Still, it warned the second half of the year would see slower sales growth weaker margins.
The maker of Dairy Milk chocolate, Trident gum and Halls cough drops said that it expected second-quarter growth to be "moderately higher" than the 7 percent like-for-like growth reported for the first quarter.
That will put growth for the first half of the year above the company's 4 percent to 6 percent target range.
"We're off to a strong start as a focused confectionery business and expect first half revenues above our goal range and good progress on margins," said Chief Executive Officer Todd Stitzer. "Despite the challenging economic outlook and further increases in input costs in the second half, we are confident of a successful outcome for 2008."
Shares in the company rose 0.5 percent to 628 pence ($12.39) on the London Stock Exchange.
The update was the company's first official report since it split from its U.S. beverages business last month, which is now trading as Dr Pepper Snapple Group Inc., on the New York Stock Exchange.
Cadbury said it recorded good growth in the first half across all its categories and double-digit growth in emerging markets. It added that higher prices across most of its markets had helped it recover increases in material costs.
Cadbury has announced plans to close 15 percent of its confectionary factories by 2011, cutting around 7,500 jobs, and shift its headquarters to London's outskirts. The actions aim to cut expenses as the cost of dairy and cocoa surges.
It expects the year's commodity cost increases to remain in the range of 5 percent to 6 percent, but said those increases are now expected to be weighted toward the second half.
Cadbury is due to announce its first half results on July 30.
