DS Smith expects half-year profit to be 'materially ahead'
Tuesday, November 6, 2018
DS Smith said its trading continues to perform in line with its expectations in a pre-close trading update relating to the six-month period ended 31 October 2018.
The London-headquartered packaging giant said business trends are consistent with its last update, released in September 2018.
“We expect the return on sales and adjusted operating profit in the first half to be materially ahead of the comparable period for the recovery of increased input costs earlier in the year and good volume growth from our very highly resilient FMCG focussed business,” said group chief executive Miles Roberts in a call to investors this morning (6 November).
He added the integration of US-based Interstate Resources, the fibre-based corrugated packaging business that DS Smith acquired last year, “continues to go very well” with major customers now procuring from the business in both Europe and the US.
“We remain highly focused on cash management and anticipate cashflow from operations to be significantly ahead of the prior period,” said Roberts.
“The previously announced strategic review of our plastic business is also going well. And the regulatory process for the proposed acquisition of Europac continues to be in line with our expectations, with completion of the acquisition expected by the end of this calendar year.
“We continue to see strong customer support to our innovative sustainable packaging, responding to the dynamic requirements of our customers. We expect good ongoing volume and market share growth, look forward to the completion of Europac and view the future with confidence.”
DS Smith’s share price climbed by 6.4p to 387p in early trading and stood at 385.6p at the time of writing.
The group, which turns over around £5.7bn, reported a 21% boost in annual profit to £473m in July. It has recently pledged to manufacture 100% reusable or recyclable packaging by 2025.