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Rexam reports in line trading

Keith Bowman | 12 November 2015 | A A A
Rexam reports in line trading

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Rexam plc Ordinary Shares 80 5/14p

Sell: 645.25 | Buy: 645.25 | Change 0.25 (0.04%)
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The beverage can maker, which operates 55 can making plants in more than 20 countries, today (12Nov2015) announced its third quarter trading update. Trading had remain in line with prior management expectations. Overall global beverage can volumes were up 3% (1% excluding acquisitions) in the quarter. In February 2015, US company Ball and Rexam announced that they had reached agreement on the terms of a recommended offer for Rexam. The transaction is still expected to close in the first half of 2016. The share price was little changed in early morning UK stock market trading.

Chief Executive Comment:

"Rexam remains in good shape operationally with global beverage can volume growth of 3% in the third quarter. As expected, volume growth slowed down in Europe and softness continued in the Middle East. In North America, the carbonated soft drinks market remains challenging, but we had good growth in specialty volumes driven by beer and energy drinks. Volumes in South America returned to growth towards the end of the quarter, driven by strong growth in specialty cans. After taking into account the impact of foreign exchange, our expectations for the full year are unchanged."


Accompanying management comments noted that "Looking into 2016, the environment remains challenging but we continue to expect growth in global can volumes. Pricing reductions in Europe will be mostly offset by the benefit of the restructuring programme announced in February this year. We will incur ramp-up costs for our new plants in Widnau and India and the devaluation of the Brazilian Real against the US dollar, if maintained, will give rise to further foreign exchange losses. Finally, at current aluminium premium rates, we would expect a £30-35 million tailwind, although premium remains uncertain and a further update will be provided at our full year results."

This article is not advice or a recommendation to buy, sell or hold any investment. No view is given on the present or future value or price of any investment, and investors should form their own view on any proposed investment. This article has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication. Non-independent research is not subject to FCA rules prohibiting dealing ahead of research, however HL has put controls in place (including dealing restrictions, physical and information barriers) to manage potential conflicts of interest presented by such dealing. Please see our full non-independent research for more information.