DS Smith restores dividend as business improves
Tuesday, September 8, 2020
Corrugated box volumes have improved at DS Smith and the group has seen “a return to positive growth” following the initial impact of Covid-19.
The packaging PLC released a trading update today (8 September) ahead of its AGM, for the period since 1 May.
The group said that its supply chains had “remained robust” and praised the “continued exceptional support of all our colleagues”, which had allowed all DS Smith’s plants to remain operational.
The business said it had provided record service and product quality levels for its customers during the period.
“Our strong commercial offering continues to help mitigate the ongoing lower pricing environment. As expected, the impact of lockdowns on recycling infrastructure and the associated short-term impact on OCC pricing has reduced to more normal levels and we continue to see further opportunities in terms of efficiencies within our cost base.”
Chief executive Miles Roberts commented: “The underlying drivers of demand for corrugated packaging remain strong and our sustainable packaging solutions for resilient FMCG and e-commerce customers are more relevant than ever.
“While the macro-economic outlook remains challenging, we are pleased to see volume growth in August and the reduced OCC costs. Our customer focus, strong cost control, cash generation, and liquidity profile, together with continued performance in line with our expectations, gives us confidence for the future.”
The group also announced that it would pay an interim dividend as a result.
DS Smith's share price went up by 7.8% 293.90p on the news.