Rexam drops on weak results, currency headwinds - UPDATE

- Revenues and volumes rise just one per cent- Results miss consensus estimates slightly- Currency headwinds to hit results in 2014, analysts warnThe market gave a cool reaction to annual results from packaging group Rexam on Thursday as revenues and profits missed forecasts, while analysts highlighted concerns about currency headwinds.Rexam, which has 55 can-making plants in over 20 countries, is now exclusively a beverage can manufacturer following the disposal of its Personal Care division last year and the yet-to-be-completed $805m sale of the bulk of its Healthcare business.Sales from continuing operations rose by just 1% in 2013 to £3.94bn, below the £4.2bn expected by the consensus of analysts, as global volumes expanded by a meagre 1%. Growth was held back by "disappointing" volumes in Western Europe and South America, offset by a strong performance in North America, Rexam said.Analysts at Jefferies said that the 1% volume growth rate was "the same as in the first half, suggesting that the trend seen in the third quarter (+3%) didn't endure through the fourth quarter".Underlying operating profit for 2013 was flat at £449m, missing the £457m expected by the market.The company raised its total dividend to 17.4p per share, up 14% year-on-year. As previously announced, it also intends to return £450m to shareholders from the proceeds of the Healthcare disposal, which is expected to complete around the half-year stage.Chief Executive Graham Chipchase said that he expects Rexam to make "further progress on a constant currency basis" in 2014, which, as analysts have suggested, implies that foreign exchange (FX) is likely to have a bigger impact on results this year.FX contributed £8m to the company's underlying operating profits in 2013; but if the company had used year-end FX rates the bottom line would have been £25m lower. "At current spot rates (mainly due to the weak Russian rouble), we estimate 2013 underlying operating profits would be £33m lower," according to Credit Suisse. The Swiss bank warned that the adverse currency impact in 2014 - it has pencilled in £31m into its numbers - will offset underlying progress.The stock was 3.53% lower at 506p in afternoon trade.BC