Revenue and profit up again at DS Smith

By Richard Stuart-Turner, Monday 18 June 2018

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Packaging giant DS Smith has recorded revenue and profit growth in excess of 20% in its latest results.

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Roberts: "We’re seeing real momentum across our markets in Europe and in North America"

In the results for the 12 months to 30 April 2018, announced today, the London-headquartered business said its adjusted pre-tax profit was up by 21% from £391m in 2017 to £473m, representing a 17% increase under constant currency conditions.

Pre-tax profit was up by 11% (8% under constant currency conditions) to £292m, while its adjusted operating profit grew by 20% (16% under constant currency conditions) to £530m.

The company’s revenue grew by 21% to £5.77bn, from £4.78bn last year, which represented a 17% increase under constant currency conditions.

The business said its growth has been driven by acquisitions, “excellent performance” by its North American business, robust volumes in European markets and higher e-commerce demand.

Corrugated box volume growth of 5.2% was also achieved in the period, with growth seen in all regions.

And despite input cost headwinds, the company said it had seen good recovery in paper cost rises in Western Europe.

In the UK the company’s sales increased by 12% year-on-year to £1.08bn while adjusted operating profit was up by 16% to £109m.

DS Smith chief executive Miles Roberts said the results show that the company is “continuing to succeed in a very dynamic market”.

“Through our close customer relationships and innovation, we are capitalising on secular underlying growth trends such as the rise in e-commerce, desire for sustainable products and the evolution in consumer shopping habits.

“We are gaining market share and showing strong margin performance, offsetting significant input cost headwinds.”

In the past year the company has acquired US-based Interstate Resources, its first fibre-based corrugated packaging business, which Roberts said is “delivering excellent performance, well ahead of expectations”, and Romanian packaging and paper firms EcoPack and EcoPaper.

Earlier this month the business announced its proposal to acquire Spanish corrugated packaging and paper manufacturer Europac, in a deal worth £1.45bn.

“We’re seeing real momentum across our markets in Europe and in North America and I believe our model has never been more relevant to the needs of our customers today,” said Roberts.

“We’ve entered our new financial year supported by strong growth in our markets and the potential acquisition of Europac, so our outlook for the next 12 months is very positive.”

The board declared a final dividend per share of 9.8p, down from 10.6p paid a year ago.

DS Smith’s share price fell by just over 2% to 553.6p in early trading, before rallying to 556.8p at the time of writing.

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