Personal care market recovery boosts packaging sales at Rexam

By Katie Bird

- Last updated on GMT

Related tags Personal care packaging Better Rexam

Improved personal care packaging sales boosted results for packaging supplier Rexam, although volumes in other sectors were looking less healthy.

Overall reported group sales (plastic packaging and beverage cans) for the first six months of the year were down slightly to £2,491m (€2,981m) as the top line was hit by negative currency translation effects totalling £30m; although, organic sales were up 2 per cent.

Sales for the plastic packaging sector, which includes personal care packaging, health care and closures, came in at ₤667m in comparison to ₤639m in the first six months of last year.

Volume sales up in personal care

However, this sales increase is entirely down to price increases, the company said. While sales volumes in personal care packaging did grow, this was offset by continuing volume reductions in beverage closures.

According to the company, the personal care market overall is gaining momentum in both premium and masstige, which, combined with restocking explained the volume increase of 11 per cent.

Dispensing systems performed particularly well with an increased demand for fragrance and lotion pumps as well as foam pumps and samplers. Makeup sales also grew on the back of a recovering market, the company said.

Severe cost cutting measures

The poor financial and trading environment last year took its toll on sales and profits, prompting Rexam to impose severe cost cutting measures. This has resulted in a reduction in headcount of about 2,200 people since the start of 2009. Another 100 jobs are expected to go by the end of 2010.

Restructuring has now begun to feed through into improvements in profits. In place of a £30m loss in the equivalent period last year, Rexam has reported a profit before tax of £144m for the first six months of 2010.

But despite this improvement, and the recovery on the top line, Rexam remains cautious about future performance. CEO Graham Chipchase said in a statement: “Uncertainty persists about the global economic outlook and visibility remains low.

However, he added: “We expect our results for the second half of the year to be similar to those of the first. We are confident that our focus on the fundamentals of cash, costs and return on capital will continue to strengthen our business and improve shareholder value.”

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