Reporting its financial results for 2010, the global can manufacturer said underlying profit before tax was up 45 per cent to £412m.
Much of this improvement was down to cost savings that added up to £88m.
“In 2010 we delivered record profits and cash flow, improved ROCE and significantly strengthened our balance sheet,” commented Graham Chipchase, Rexam CEO.
In 2011 Rexam said it expects a year of “continued progress”.
Closures disposal
That company plans to continue trimming down its business. In its financial statement the UK-listed company said it is currently marketing the closures division for disposal.
Any sale will exclude the high barrier food container part of the unit that has performed well of late.
Rexam had announced late last year that it was “examining options” for its beverage and specialty closures business including a possible sale and further restructuring. Beverage closures have repeatedly been identified as a weak point in its portfolio.
In its newly published financial statement, Rexam said beverage closure volumes were down by some 9 per cent last year as the closures division as a whole reported sales of £343m. In the results, closures were classified as discontinued operations and following a review, an impairment charge of £171m was incurred in 2010.
Bolt-on acquisitions
Rexam anticipates that the disposal of the closures business will improve its net debt position and help the company in its pursuit of bolt-on acquisitions. The company said it is looking for opportunities in emerging markets.
In 2010 total sales at Rexam grew 2 per cent to £4,962m with much of the best performances coming from the fast growing can markets in South America.
But in Russia, another key emerging market, can volumes fell due to a 200 per cent tax hike on beer and the appearance of a new competitor. Rexam said it remains optimistic about Russia in the long term.