The shares of Rexam (LSE: REX) climbed 3% to 521p during early London trade this morning after the can maker revealed a 1% growth in sales to £2bn for the first half of the year. This was better than the market was expecting, after the company issued a downbeat trading update in June.
However, Rexam’s margins were burdened by higher input expenses, as aluminium and labour costs dragged on results. As a results, the company’s overall pre-tax profits slipped 10% from £142m last year to £128m.
Graham Chipchase, Rexam’s chief executive, remarked:
“It has been a challenging first half against a difficult macroeconomic backdrop. However, we have responded swiftly by accelerating our cost mitigation measures and maintaining our capital discipline. We continue to expect our full year performance to show improvement over 2012.”
With a market cap of £4.1bn, Rexam’s shares trade at 13 times expected earnings. After hiking its interim dividend today by 14%, Rexam’s shares offer a prospective dividend yield of 3%.
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> Mark does not own any share mentioned in this article.