UK: Rexam reports "encouraging" Q1

Drinks can maker Rexam has reported an "encouraging" first quarter of 2010, with the firm's cost savings plans on-track.

Rexam said today (6 May) that volume sales of drinks cans in Europe has risen in the three months to the end of March, compared to the same period of last year, due to demand for speciality cans.

Volumes fell by 1% in North America, in-line with the market, and grew strongly in South America, said the UK-based firm, without publishing figures.

"Trading in the first quarter was encouraging, with beverage can volumes better than expected in Europe and North America," said Rexam's CEO, Graham Chipchase. "However, it is still early in the year, and trading in the traditionally busy summer season will influence our full year performance."

Profits from the drinks can business are also higher than anticipated, although Russia remains a concern, Rexam added.

The group said that its cost savings plans are on-track.

In plastics packaging, a plan to close and consolidate eight plants and reduce the workforce by approximately 10% is set to save GBP24m (US$36.2m) annually from this year. A completed cost savings plan in the can business is also set to save GBP19m annually from this year.

On debt, Rexam said: "Our committed bank facilities maturing in 2011 and 2012 have been refinanced for 5 years to 2015 at better rates than our existing facilities." Net debt stood at around GBP2bn at the end of the first quarter, giving a net debt to EBITDA ratio of 2.2.

For the full announcement, click here.