Shares in Cadbury Schweppes rose by 3.17 per cent yesterday, closing at 537.5p, as it reported a 20 per cent spike in pre-tax profits and confirmed the £20m cost of a salmonella-related chocolate recall.

Cadbury said first-half profits jumped to £402m but investors were also relieved that costs connected to the salmonella incident had failed to hit the feared £40m mark while profits swelled in line with expectations. The group, which makes Dairy Mild chocolate and Clorets breath fresheners, had to recall more than 1m chocolate bars in late June because traces of salmonella were found n a pip at its Herefordshire plant.

Health authorities later said this was the most likely reasons for a recent outbreak of salmonella in Britain. The company could not quantify what the impact of the incident would be on second-half sales. Cadbury's British chocolate sales melted by 14 per cent in July as the summer heat wave took its toll.

Chief executive Todd Stitzer conceded that the product recall had dented consumer confidence in the company's products, which had knocked its market share down by one percentage point. "The quality assurance process that we used in our manufacturing has caused our consumers concern and we are truly sorry for that, " he said.

Cadbury has received around 700 complaints about the salmonella-related recall, including 50 who complained of it making them ill. "No one has yet asked for compensation," Stizer added. William Grobel, a consultant at brand valuation consultancy, Intangible Business, said the incident had been " an isolated blip" as the brand was too culturally ingrained in the nation's psyche to suffer long-term damage.

Daniel Rogers, editor of PRWeek, said: "By only withdrawing the product when the Food Standards Agency intervened in June, five months after learning of the contamination, Cadbury has put its brand in a precarious position. If consumers can no longer trust Cadbury to be honest and transparent and ‘do the right thing' in terms of recall, how can they trust Cadbury's business ethics in the future?" "The results look reasonable and they have crystallised the recall costs said analyst Rob Mann at Collins Stewart.