Shares in packaging company Rexam were down on the FTSE 100 in afternoon trading despite the group reporting a rise in pre-tax profit of 22 per cent in the half year ended 30 June.

Rexam said its sales fell by one per cent to just under £2.5 billion, while underlying pre-tax profit rose to £198 million, up from £135 million in the previous year. The volume of beverage cans manufactured rose by two per cent.

The group said that it would be paying an interim dividend of 4.0 pence per share. After the first half last year there was no dividend.

Graham Chipchase, Chief Executive of Rexam, said, "We are pleased with our performance in the first half. There has been some volume recovery as well as pricing improvement. Our relentless cost control has driven strong profit growth. Tight management of capital expenditure and working capital has yielded good cash flow, and our return on capital has improved significantly.

"In most of our businesses, the trading environment is stabilising and the outlook for Beverage Cans has improved since the start of the year. However, uncertainty persists about the global economic outlook and visibility remains low.

"We expect our results in 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."

By 13:35 shares in Rexam were down 3.67 per cent on the FTSE 100 to 327.80 pence per share.