Weak chocolate sales in the UK have forced Cadbury Schweppes to pull back its 2006 forecasts for sales and margin growth.

The world’s biggest confectionary group blamed warmer weather in the UK rather than a consumer backlash to a Salmonella outbreak which forced it to recall Dairy Milk chocolate in June.

In an update on its outlook for the rest of 2006, Cadbury revised guidance it gave at its first-half results in August after reporting that UK confectionary sales since July have been 5 per cent lower than last year.

Sales are now set to come in at the middle of its 3 to 5 per cent sales goal compared to previous guidance that sales would be at the top of that range. Profit margins will remain flat - not up on 2005 as previously flagged.

"We now see ourselves in the middle of our sales goal range of 3 to 5 percent, and we are also unlikely to grow our margins this year," Todd Stitzer, Cadbury’s chief executive said today.

"The UK confectionery market, which accounts for 15 percent of our group sales, has been weak, but we think the weather had a greater effect than the recall difficulties," Mr Stitzer told a conference call this morning.

However, the group said other regions had been performing in line with expectations, reporting "good progress" across its confectionary and drinks range in the US as well as a robust performance in emerging markets.

It has continued to gain market share in the lucrative US carbonated drinks market. This business is the biggest profit generator in the group.

Cadbury also reported that "consumer confidence in the Cadbury brand is recovering well" in the UK ahead of its important Christmas trading period.

The company’s shares were down about 0.5 per cent to 543.5p in morning trading, still well above to the lows of 492p reached in the wake of late June's product recall.

Graham Jones, an analyst with Panmure Gordon, said "the only real disappointment came from the UK chocolate business, but Cadbury has done a good job in rebuilding confidence in the brand".

"Cadbury's carbonated drinks business in the US has been very strong," Mr Jones said..

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