Rexam Profit Increases 58% on Higher Prices for Cans

By Mark Herlihy

July 30 (Bloomberg) -- Rexam Plc, the world's biggest maker of beverage cans, said first-half profit advanced 58 percent after prices outpaced raw materials costs.

Underlying profit after tax rose to 109 million pounds ($215.5 million), or 17 pence a share, from 69 million pounds, or 11.7 pence, a year earlier, the London-based company said today in a statement. Sales gained 30 percent to 2.2 billion pounds. Profit a year earlier was curbed by a four-week strike at its U.S. plants.

Rexam, whose customers include Red Bull GmbH and PepsiCo Inc., is expanding into countries including Russia to offset stagnating demand in the U.S., its biggest market. Aluminum, used to make beverage cans, averaged 2.2 percent higher on the London Metal Exchange in the first half.

``The company has raised prices to compensate for higher aluminum costs and there's been no industrial action this year,'' Sandy Morris, an analyst at ABN Amro Holding NV in London, said before the results were published. ``We remain pretty optimistic for the rest of the year with Europe powering growth.''

Rexam will pay an interim dividend of 8.7 pence a share, 5 percent more than a year earlier.

To contact the reporter on this story: Mark Herlihy in London at mherlihy1@bloomberg.net