The equity analyst Dominion Bond Rating Service has downgraded a number of Cadbury group companies on concerns of future sales and earnings growth.
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DBRS downgraded Cadbury Beverages Canada Inc.’s commercial paper to R-2 (high), Cadbury Schweppes plc’s (CSG) corporate rating to BBB, and Cadbury Schweppes U.S. Finance LLC’s guaranteed senior notes to BBB.
In a press release, DBRS said the ratings are due to restructuring costs expected to be about £900m through 2007. It also said that it believed future expectations for sales and earnings growth would delay balance sheet recovery to three to four years.
Also of concern was reversing the declining sales trend and improving margins for the recently acquired Adams business. Results from US beverages have also weakened and it is unclear when results will improve, DBRS said.
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