Rexam sees third-quarter weakness in Healthcare

Rexam, the FTSE 100 consumer packaging giant, said that trading in the third quarter was 'broadly in line with expectations' despite weakness in its Healthcare division.

The company, which manufactures 57bn drinks cans each year as well as injection-moulded products for the healthcare and household goods markets, said that Beverage Cans volumes were up 6% in the three months to the end of September, "in line with our plans".

European volume growth excluding Russia slowed from the first half as expected, while Russia returned to growth.

"In North America the recovery of some of the standard can volumes lost in 2011 continued to drive our performance, and growth in South America accelerated," Rexam said.

However, the company revealed that its performance in Healthcare was "somewhat below our expectations". This was mainly due to lost business in the animal health part of the Pharma division.

Rexam produces a range of products in Healthcare, including plastic containers and closures, drug delivery and medical devices, pharmaceutical pumps and valves as well as ophthalmic packaging.

Meanwhile, the two-part $709m Personal Care disposal, first announced in July, is still ongoing. The High Barrier Food packaging business was sold in August but the sale of the Cosmetics, Toiletries and Household Care business still needs the approval from Chinese authorities. Completion is still expected by the end of the year.

Chief Executive Graham Chipchase said: "Despite a challenging trading environment, the Group's overall performance is broadly in line with our expectations.The divestment of Personal Care is in its final stages and we are on track to return £370m of the proceeds to shareholders.

"We continue to focus on generating cash, managing costs and improving return on capital employed, and our progress to date gives us confidence in achieving our 15% return on capital employed target by the end of 2013."