The second half has been a mixed bag for packaging company Rexam, with out-performance by its Beverage Cans business more or less cancelled out by continued weakness on the Plastic Packaging business.
As a result, the performance of the group overall has been in line with the board's expectations.
Divisional break-down
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Tight control of costs was largely the reason for the Beverage Cans division's better than expected performance.
In Europe, volume growth excluding Russia, continued in line with the first half. Volumes in Russia were soft, as expected, relative to strong prior year performance.
In North America, standard can volumes continued in line with the first half, and with strong growth in speciality cans, the business remains on track to deliver underlying operating profit in 2011 ahead of that in 2010.
Trading in South America improved somewhat, although the market growth slowed compared with previous years.
The full year performance in Brazil will be determined by the important summer season.
Performance of the Plastic Packaging unit has been sub-par as a result of lower volumes, though the company is trying to compensate by cutting costs.
The Healthcare division saw trends similar to those in the first half, but performance in Personal Care continued to be weak, prompting the company to contemplate offloading the division.
Outlook
"Looking into next year we will have to contend with lower GDP [gross domestic product] growth in several of our major markets and as previously indicated, some specific challenges as we absorb £20m of higher metal conversion costs in European Beverage Cans and the impact of a key Healthcare product coming off patent. Nevertheless, at this early stage we expect 2012 to be a year of further progress," said Graham Chipchase, Rexam's chief executive.
Chairman to step down
Company chairman Sir Peter Ellwood is to retire from the company at the close of business on 22 February 2012. Ellwood will be succeeded by Stuart Chambers, who will join the board as a non executive director and chairman designate on 1 February 2012.
The 55-year-old Chambers is a non executive director of Tesco, The Manchester Airport Group and Smiths Group. He was formerly chief executive of glass-making firm Pilkington.
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