Cadbury melts in the hot weather

SWEET-toothed Britons abandoned their normal diet of Crunchie bars and Dairy Milk slabs during the heatwave, Cadbury Schweppes said in a sales warning today.

While assuring shareholders that there would be no serious effect on profits, Cadbury admitted that 'hot weather in Europe has had some adverse impact on confectionery sales'.

The group's other big division - the Dr Pepper, Seven Up and Snapple drinks arm in the US - was also hit by the 'weak' US beverage market, it added.

However, overall trading for the full year would be broadly similar to the first half, it said, when underlying profits before tax slipped from £386m to £365m. The shares fell 6 3/4p to 381p.

The alert follows a profits warning from Thorntons, which recently said that sales were disappointing as it unveiled a 10% slide in profits. Other retailers have also been hit as shoppers shunned the stores in favour of the beach or the back garden.

Cadbury said its debt refinancing plans were on course. It borrowed $6.1bn to buy Adams, the Dentyne chewing gum and Halls sweets group, and is now rescheduling the debt on more favourable terms. It said it expected to have rescheduled $1.6bn by the end of this year. So far £400m of debt has been cancelled, replaced by bonds.

The group has been struggling to cope with the downturn in the US fizzy drinks market and is consolidating its operations there into a single business. Chief executive Todd Stitzer has described 2003 as a year of transition after admitting the group would miss its 10% earnings growth target.