Rexam achieves record results for 2010
Strong beverage can sales helped Rexam achieve an underlying profit of 45% in 2010.
Profit before tax increased to £412m from £285m in 2009 on sales up 2% to £4.96bn. Total sales in 2009 stood at £4.86bn. Profit from continuing operations including one-offs rose to £338m from £134m.
Beverage can sales were up 3% to £3.68bn and boosted underlying operating profit by 27% to £394m.
Rexam’s overall beverage can volumes grew 2%, driven by strong volume growth in specialty cans across all regions and good growth in South America.
The improvement in underlying operating profit of 27% arose from better pricing, volume growth, a better product mix along with continued cost reductions.
In comparison, the company’s plastic packaging division registered a profit of £119m. This was up 17% on 2009 when the company turned a profit of £102m. Sales increased to £942m, up 4% on 2009 (£908m).
The closure of eight plants in the US and Europe and an overall reduction in employees of around 10% resulted in total annual savings to date of some £34m at a total cash cost of £39m.
In total, Rexam’s cost efficiencies and restructuring savings amounted to a total of £88m. The company’s free cash flow stands at £316m and net debt has been driven down to £1.68bn. Return on capital employed (ROCE) improved to 12.3%.
The board is proposing a final dividend of 8p per share, making a total dividend of 12p for the year.
Commenting on the results, Graham Chipchase (pictured), Rexam’s chief executive, said: “In 2010 we delivered record profits and cash flow, improved ROCE and significantly strengthened our balance sheet.
“Going forward, we will remain focused on increasing our return on capital, optimising cash and controlling costs, while making disciplined investments to improve our growth and returns over time. We expect 2011 to be a year of continued progress.”