6th Nov 2014 08:36
LONDON (Alliance News) - DS Smith PLC on Thursday said its trading in the first half was in line with expectations, with strong growth in all regions, and said it has struck a deal to buy Spanish corrugated board producer Andopack.
The FTSE 250-listed recycled packaging company, said its performance in the six months to the end of October came in line with expectations, with like-for-like corrugated box volume growth rising year-on-year.
The group said its outlook is positive, despite some problems in many of its markets, and said it expects to continue to perform in line with its medium-term financial targets.
DS Smith also said it has struck a deal to buy Andopack, a Spanish corrugated board provider, to provide it with a direct market position in Spain. The company said it expects the total consideration for the acquisition to be around GBP35 million. The deal is being financed from the company's existing cash resources, and it said it expects the acquisition to deliver a return on capital above the cost of capital in its second year of ownership.
"In the first half of this financial year, we have continued to make good progress with our customers, benefitting from our differentiated commercial offering. We have again delivered volume growth ahead of the market, together with improved margins and returns," said DS Smith Chief Executive Miles Roberts.
"The acquisition of Andopack in Spain is an exciting development for DS Smith as we continue to strengthen our pan-European customer offering. Andopack has high quality assets and we look forward to growing it further as we expand in this attractive market," Roberts added.
DS Smith shares were down 0.2% to 265.90 pence on Thursday morning after gaining briefly on the news.
By Sam Unsted; [email protected]; @SamUAtAlliance
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