Price recovery in the US beverage can market and increased beverage can volumes in Europe helped Rexam, the consumer packaging group, report a 30 per cent rise in underlying profits for the first six months of the year.
In the months to 30 June profits before exceptional items and goodwill increased from £103 million (€162.5m) to £134 million, on turnover down from £1.76 billion to £1.63 billion.The group, which has been transformed over the past five years from a diversified conglomerate to a focused consumer packaging company, said that a 5 per cent rise in the US beverage can market as well as strong sales in Russia, had helped to lift profits.
However, reported pre-tax profits of £67 million last year turned into losses of £147 million, as the group booked exceptional items of £211 million relating to the write-down of goodwill.
Operating profits at the beverage packaging arm jumped by 30 per cent from £99 million to £129 million, as the price increase in the US market failed to impact on volume.
The division was also helped by the penetration of western beer companies into Russia, increasing volumes at the Rexam's plant in Moscow. And it managed to pass on the benefits of lower aluminium prices to its customers.The winning performance in beverages, helped to offset disappointing results in plastic packaging. A fall in spending on duty free and luxury goods resulted in a slow down in demand from customers in the high value fragrance and cosmetic industry.
However there was a slight increase in operating profits from £22 million to £25 million.
Looking ahead the group said it would be working to improve margins and grow its existing markets both organically and through acquisition.
Rexam also said that its disposal of non-core businesses was now complete. It had raised £794 million, instead of the expected £800 million.