Rexam plc reports good 1H 2003

Global consumer packaging company Rexam PLC announced its results for the half year to 30 June 2003.
Among the highlights: underlying profit before tax up 9%; underlying earnings per share up 7%; Bev…

Global consumer packaging company Rexam PLC announced its results for the half year to 30 June 2003. Among the highlights: underlying profit before tax up 9%; underlying earnings per share up 7%; Beverage Packaging underlying operating profit improves 2% against the background of a weak German market; dividend up 4.3% to GBP 0.073; Rolf Brjesson to assume the non executive Chairmanship in 2004. Commenting on the results, Jeremy Lancaster, Chairman of Rexam, said “We have had a good first six months thanks to a combination of a better product mix and volume increases in the majority of our businesses as well as our continued focus on efficiency savings. The start to the second half of the year has been encouraging and we remain confident that 2003 will be another successful year for the Group.” “I would like to add that I am delighted that Rolf has accepted the Board“s offer to continue with Rexam as non executive chairman following the appointment of a new chief executive. His guidance and his standing as one of the top leaders in the global consumer packaging industry will be of enormous benefit to Rexam as the company continues to grow.” In his statement, the Chairman said overall sales for the period dropped slightly to GBP 1.6 billion from GBP 1.7 billion mainly as a result of disposals. Having restated the 2002 figures following Rexam“s adoption of FRS17 “Retirement Benefits”, profit before tax was GBP 71 million compared with a loss of GBP 169 million in the corresponding period of 2002. The resulting basic earnings per share was GBP 0.102 compared with a loss of GBP 0.486. Lancaster highlighted the performance excluding items that were one-off or non integral to the operating business, namely retirement benefits net finance cost, goodwill amortisation and exceptional items. On this basis, he said, “underlying profit before tax was up 9% to GBP 127 million from GBP 117 million and underlying earnings per share rose 7% to GBP 0.196 from GBP 0.184. Setting aside the effects of acquisitions, disposals and currency, sales were flat while underlying operating profit rose by 5% mainly as a result of product mix and volume improvements in most of our businesses and our unrelenting focus on efficiency savings through our Lean Enterprise initiative.” Commenting on general trading, Lancaster said that overall, the firm“s Beverage Packaging sales had “continued to develop positively, mainly owing to good performances by Beverage Can Americas and Glass and in spite of the fall off in Germany following the introduction of a deposit on one way beverage packaging at the start of the year. The lack of a coherent nationwide deposit infrastructure has discouraged retailers from stocking one way packaging. To a much lesser degree, sales were also affected by the disruption caused by the conversion of one of our Spanish can making plants from aluminium to steel.” “Underlying operating profit for Beverage Packaging rose by 2% with operational excellence and efficiencies continuing to have a favourable impact.” Regarding glass, “sales and underlying profits were up in the Glass Sector and margins improved. Northern Europe performed strongly, particularly Germany, which benefited from the increased demand for refillable beverage containers. The recent acquisitions, Nienburger Glas and Lner Glas, are generating synergies ahead of original expectations. Elsewhere, volumes were down in the UK and Poland due to furnace refurbishments.”