Rexam staves off downturn with exchange rate boost

The plastic and beverage can manufacturer said trading in 2009 “remained unclear”, but that it would continue to focus on cash generation and cost reduction.

European demand for beverage cans was “weaker than expected”, particularly in Russia, and compounded with increased purchases at the end of last year to anticipate price increases in January. The Americas proved to be more robust markets for the company.

In plastic packaging, the firm is responding to a 10% decline in volumes and looking to restructure the business to obtain £30m annual savings from 2010 onwards. Nonetheless, the division’s overall performance was in line with expectations.

Net debt at the end of the quarter was not as high as had been expected at £2.7bn, and the firm said it expected to complete the refinancing of its £775m revolving credit facility, which expires in November 2010, during the first half of the year.

Rexam chief executive Leslie Van de Walle said in an interim trading statement that underlying operating profit was in line with last year, partly due to foreign exchange translation.

“Our longer-term strategy remains unchanged. We will continue to focus on the core drivers which have made Rexam successful,” he said.

Rexam’s share price dropped by 6% to £3.06 as trading started this morning.

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