After last year's rigorous restructuring, along with last July's £350m rights issue, packaging group Rexam is experiencing some stability.
Admittedly, overall group sales growth still looks fairly lacklustre. But adjust for currency translations and the plastic packaging side was at least flat, while the beverage cans division delivered a 3 per cent year-on-year revenue increase - driven by speciality cans. What's more, across each of the three sales regions - Europe and Asia, North America and South America - growth was sustained by the popularity of energy drinks and beer.
Last year's restructuring is making a big impact, too. That helped deliver £51m of cost savings in the half and supported a 22 per cent year-on-year increase in operating profit to £266m. Indeed, total savings for this year are expected to reach £75m, although management is also looking to invest £200m this year, which includes a project to cut the weight of cans. In addition, and after last year's anxieties around the group's credit rating, along with the subsequent rights issue, management has refinanced £1bn of bank debt - total committed facilities now stand at £2.8bn.
Bank of America Merrill Lynch expects full-year adjusted pre-tax profits of £474m, giving EPS of 30.1p (£401m and 25.4p in 2009).
REXAM (REX) | ||||
|---|---|---|---|---|
| ORD PRICE: | 332p | MARKET VALUE: | £2.91bn | |
| TOUCH: | 332-333p | 12-MONTH HIGH: | 349p | LOW: 223p |
| DIVIDEND YIELD: | 3.6% | PE RATIO: | 34 | |
| NET ASSET VALUE: | 249p* | NET DEBT: | 84% | |
| Half-year to 30 Jun | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 2.52 | -30 | -1.9 | nil |
| 2010 | 2.49 | 144 | 11.6 | 4 |
| % change | -1 | - | - | - |
Ex-div: 8 Sep Payment: 5 Oct *Includes intangible assets of £2.5bn, or 284p a share | ||||
