Cadbury and Home Retail announce better than expected results

This morning both Cadbury and Home Retail Group announced a rise in profits, beating analyst expectations. Nick Raynor, investment adviser at The Share Centre, comments on today's results and what they mean for investors.

"Cadburys has reported excellent third quarter results, with revenues rising to 7 per cent compared to just 4 per cent in the first half of the year. Performance was boosted by a growth in gum, as a result of recent launches in the UK and US, and an increase in chocolate and candy sales thanks to the stay-at-home trend.

"Today's announcement now puts pressure on Kraft to offer a significantly higher bid for Cadbury; they must make a formal bid by 9 November under the terms of a ‘put up or shut up' order issued by the Takeover Panel. We suggest low risk investors sell and take advantage of Cadbury's recent strong performance, while medium risk investors should hold. High risk investors could consider buying if they believe Kraft will bid more than the current market price.

"Despite challenging conditions, Home Retail Group also beat analyst expectations this morning by announcing a 3 per cent rise in half year sales. Figures were boosted thanks to strong performance from its Argos and Homebase divisions. Argos saw a 1.7 per cent rise in home entertainment sales, while its online store now accounts for 28 per cent of all sales at Argos.

"We recently upgraded Home Retail Group from a sell to a hold due to the greater demand for home entertainment and the popularity of home improvement projects over the last few months."