Rexam (LSE: REX) — the global consumer packaging group and beverage can maker, which operates 55 can-making plants in over 20 countries — is currently down 4.6%, following release of its results for the full year 2013, having recovered from a near-10% fall in early trading.
Underlying pre-tax-profit grew 4%, to £372m, on sales that increased only 1%, to £3,943m, whilst underlying operating profit was flat.
But underlying earnings per share rose 13%, to 35.3p per share, and Rexam’s board is proposing a final dividend of 11.7p per share, giving a total dividend of 17.4p for the year — a 14% increase over 2012.
The company says that the increased dividend “reflects the board’s continuing confidence in the group” and that it’s in line with the policy of maintaining dividend cover in the range 2 to 2.5 times underlying earnings.
Target hit
The company announced that it had hit its target, set four years ago, of achieving a 15% ROCE by the end of 2013. It also said that it intends to return £450m to shareholders when sale of a major part of its Healthcare business completes later this year, adding to the almost-£1bn it’s returned over the past four years.
Commenting on the results, chief executive Graham Chipchase said:
“Rexam is now a focused beverage can maker, and our aim is to be the best in the industry. The work that we have done to restructure our company means that we are in good shape operationally. In 2014, despite an uncertain macroeconomic environment and some continued cost volatility, we expect to make further progress on a constant currency basis.
“We remain committed to managing what we can control and focusing on cash, cost and return on capital employed as we pursue our strategy of balancing growth and returns.“
At 500p, Rexam’s share price is 2.5% down on this time last year, versus a near-6% rise in the FTSE 100. And Rexam lags the index over five years, too, gaining only 68%, compared to the FTSE’s 74% increase.
