Cadbury Schweppes is under pressure from activist investor Nelson Peltz to improve its financial performance.

Peltz’s investment vehicle Trian Fund Management, which holds a 4.5% stake in the confectionery giant, has written to Cadbury’s board of directors reportedly demanding sweeping changes including increasing profit margin targets, shaking up its board of directors and cutting costs.

These changes, Train said, could increase Cadbury’s share price to as much as 970p. Yesterday, shares closed up 15p at 623p.

“If management and the board fail to make progress on their initiatives and the plans we have outlined, Trian will look to become significantly more active in evaluating all of our alternatives as a larger shareholder,” the 14-page letter stated.

“If these targets are not achieved, we also believe there is a reasonable probability that matters will be taken entirely out of the hands of the board and management, as the company’s underperforming standalone beverage and confectionery companies may well become acquisition targets.”

In a statement, Cadbury Schweppes said: “The board is confident that the company’s strategy is in the best interests of all its shareowners and is pleased with the progress management are making. Recent trading performance has been strong, margin improvement plans are being actively executed and the beverages demerger is on track.”