Rexam Drops Despite Rise in Sales
LONDON -- Rexam (ISE: REX.L) , the global consumer packaging group and beverage can maker, is currently down 3.2% despite reporting a 3% increase in sales in its half-year results this morning. The results could have been rather more disappointing had a 9% increase in operating profit at its beverage can division not helped to offset poor performance at its health-care division, where sales declined 2% and operating profit slumped 25% to 27 million pounds from 2011's 36 million pounds.
Rexam chief executive Graham Chipchase said:
We are encouraged by the progress of the continuing business in the first half and, in spite of a challenging trading environment, our overall performance was in line with our expectations.
In an increasingly uncertain macroeconomic environment, we will continue to focus on generating cash, managing costs and return on capital employed for the rest of 2012. Our progress to date gives us confidence of achieving our 15% return on capital employed target by the end of 2013.
Rexam also announced that an agreement had been reached on the disposal of its personal-care business and the intention to return about 370 million pounds of the proceeds to shareholders.
And despite today's fall, Rexam's share price remains up more than 40% from a low of 295.1 pence last September, which is an excellent performance in such challenging economic conditions and suggests this morning's fall may just be a blip of temporary disappointment.
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