Rexam shares slip down after profit warning

 
Suzie Neuwirth

REXAM’S shares fell over four per cent yesterday after the consumer packaging manufacturer issued a profit warning, blaming a disappointing performance in South America and western Europe.

The FTSE 100-listed firm – which makes cans for Coca-Cola, Red Bull and Carlsberg beer – said that drinks can volumes in those regions had grown less than expected over the past two months meaning operating performance in the first half of the year will be slightly below that of last year.

“It has been a challenging first half, but we have taken assertive action on costs to mitigate the impact on our performance and maintain our capital discipline,” said chief executive Graham Chipchase.

“Although we are still in the midst of our seasonally important summer period, we are managing the business proactively to overcome these challenges, and we continue to expect full year performance to show improvement over 2012, even if progress is likely to be less than previously anticipated.”

Rexam also announced it has started the process to sell its healthcare business and is looking for new can investment opportunities in higher growth markets.

“The disposal of this non-core business is a positive step for Rexam, allowing management to focus on its principal beverage can business,” said broker Cantor Fitzgerald.

Rexam’s share price closed 2.45 per cent down at 453.70p.