Hello and welcome to Company Focus. My name is Aamer Nawid, Analyst at Fat Prophets and this week we're going to be taking a look at consumer packaging company Rexam.

Given that the FIFA World Cup is due to start later today, it's a good time to be looking at Rexam. The Group is one of the leading consumer packaging companies in the world, but they're also one of the leading manufacturers of beverage cans. In fact, beverage cans account for 75 per cent of Rexam's revenue. They produce cans for a wide variety of clients ranging from Red Bull to Carlsberg.

Having been through a bit of an equity raising and appointed a new CEO, I look at Rexam as a recovery story.

So far this year, as the chart shows, their shares have outperformed the broader market by quite some distance and a good World Cup of trading will provide the impetus for further outperformance.

The obvious beneficiaries of the World Cup listed in the UK are, say, the supermarkets, the sports retailers, the gambling companies, all of whom will have their fingers crossed that England progress as far as they can.

The management of Rexam though will be tuned into the Brazil games with just as much interest. The country actually accounts for 10 per cent of the Group's turnover. They're a nation of big drinkers and they're fancied to go further than England in this World Cup.... not my view, I'm eager to add! but that of the quantitative research and the statistical research of some of the big investment houses.

Taking the charts back even further, back to 2006, you can see that Rexam has been in the grip of a downturn until relatively recently. The reasons for this, the global financial crisis, tough trading conditions as well as an equity raising which was basically aimed at reducing the company's large debt pile.

As we stand now, Rexam stands on much firmer financial footing and they've expanded in the right areas. South America is a prime example. The region accounts for 25 per cent of Rexam's revenues now and the company controls 63 per cent of the continental beverage can market. That's going to be earning accretive long after the World Cup sort of concludes.

The company is not just an emerging markets story, though. North America accounts for 40 per cent of its revenue. Although the World Cup is of less relevance here, there are signs that the region is producing better economic conditions. Although during the first part of this year, sort of trading remains sort of vulnerable and relatively soft, sales did come ahead of expectations and that's a positive step without a shadow of a doubt.

If you look at Europe also, the same can be said. Given the year that 2009 was, it's no surprise that the sale account has dropped by around about 3 per cent. However, now it looks as though the Europeans are drinking their way through sovereign debt fears and during the first quarter of this year, the company actually managed to post volume growth.

The company remains confident in recovery of demand for its products, but it's good to see that it is also addressing its weaknesses.

The outlook for its plastic packaging division, which produces things such as medical devices and perfume bottles, may not be as robust as that for say the beverage cans, however, cost cutting initiatives remain on track and they should yield a 10 per cent reduction in workforce and £24m worth of annual savings.

Once upon a time the company's debt pile would have actually deterred investors, but not so much anymore. Net debt has been brought down to below £2bn and the company has actually been able to refinance debt on terms more favourable than what the current existing facilities had offered.

So overall, I think Rexam has turned a bit of a corner. An improvement in the European and North America markets as well as continued resurgent performance, or continued robust growth in South America, will provide the catalyst for an increased earnings performance and increased share price performance.

Packaging is quite an economically resilient area and with the shares yielding around about 3 per cent, I wouldn't be surprised to see them gain increasing favour over the months, quarters and years ahead long after the final whistle has been blown in South Africa.

Thanks for watching. Make sure you tune in again next week.