25th Jun 2015 06:43
LONDON (Alliance News) - FTSE 250-listed packaging company DS Smith PLC on Thursday said its pretax profit rose in its financial year to the end of March as it managed to bring down its cost of sales sufficiently to offset lower revenue and said it has struck a EUR190 million deal to acquire a new corrugated packaging operation in Spain.
Pretax profit for the company was up to GBP200 million in the year compared to GBP167 million a year earlier. Revenue was down to GBP3.82 billion from GBP4.04 billion but this was offset by a lower cost of sales which improved its operating margin in the year. Revenue for the company was pushed lower by the weakness of the euro against sterling over the period, with revenue at constant currencies rising by 1%.
The company will pay a final dividend of 7.7 pence, bringing its total dividend for the year to 11.4p, up from 10p per share a year earlier.
DS Smith said its organic box volume growth in the year was 3.1%, boosted by an acceleration in the second half of the financial year as it won market share. The group also completed four acquisitions over the year, including Andopack in Spain and Duropack in south eastern Europe, which helped to boost its underlying revenue.
The company also said it has struck a deal to acquire the corrugated packaging business of Spain's Grupo Lantero for EUR190 million, further boosting its position in the Spanish market. It said it will pay from existing cash resources and said its expects the acquisition to deliver a return on invested capital above its cost of capital in the second year of ownership.
The business being acquired operates seven sites across Spain, DS Smith said.
"This has been another good year for DS Smith. In a fast changing retail and consumer environment, packaging is more relevant than ever. The progress in the business with customers is evidenced by accelerating volume growth, together with increased margins and returns, from our unique and enhanced offering," said Miles Roberts, DS Smith's chief executive.
By Sam Unsted; [email protected]; @SamUAtAlliance
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