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Bottler still packs a punch

29-Aug-2003

Despite a slight drop in sales packaging giant Rexam has announced H1 pretax profits have risen significantly following the adoption of a new system for its retirement benefits.

Overall sales for the period dropped to £1.6 billion (€2.3bn) from £1.7 billion, which the company said was mainly as a result of disposals. Meanwhile, thanks to the adoption of the FRS17 "Retirement Benefits" system, pretax profit jumped to £71 million compared with a loss of £169 million for the same period last year.

Chairman Jeremy Lancaster also announced alongside the results that the current chief executive Rolf Borjesson has agreed to succeed him as non executive chairman. He will take up the position next year following the appointment of a still to be announced new chief executive.

The company said that, setting aside the effects of acquisitions, disposals and currency, sales were generally regarded as flat.

"By excluding items that are one off or non integral to the operating business you get a clearer indication of Rexam's performance." Lancaster said. "The underlying results exclude retirement benefits net finance cost, goodwill amortisation and exceptional items. On this basis, underlying profit before tax was up 9 per cent to £127 million from £117 million and underlying earnings per share rose 7 per cent to 19.6p from 18.4p. Setting aside the effects of acquisitions, disposals and currency, sales were flat while underlying operating profit rose by 5 per cent 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."

Lancaster added that Beverage Packaging sales had continued to develop positively, due largely to the performances by Beverage Can Americas and Glass. Despite the German can deposit system and the disruption caused by the conversion of its Spanish can making plants from aluminium to steel, European sales were reported to have stayed relatively buoyant.

Underlying operating profit for Beverage Packaging rose by 2 per cent, while plastics packaging continued to improve its sales performance due to better trading conditions for beauty packaging customers.

Rexam is a consumer packaging group with annual sales in excess of £3 billion. The Group is the fourth largest consumer packaging business in the world and a leading global beverage can maker. It has two principal business operations: Beverage Packaging, which includes aluminium and steel cans as well as glass and plastic bottles, and Plastic Packaging which focuses on solutions for the beauty, pharmaceutical, healthcare and food industries.