6th Dec 2018 08:25
LONDON (Alliance News) - DS Smith PLC on Thursday reported a sharp rise in interim profit and revenue, with all of its global businesses seeing growth, leading the company to up its interim payout.
For the six months to October 31, the FTSE 100-listed packaging company's pretax profit increased 27% to GBP162 million from GBP128 million the year before.
DS Smith's revenue increased 15% to GBP3.07 billion from GBP2.66 billion last year.
The company declared an interim dividend of 5.2 pence, a 13% rise on the 4.6p paid out last year.
The company said it saw good organic volume growth in the half rising 3.2%.
"We are very pleased with the progress we have made over the last six months. We have strong momentum in the market, delivering good top line growth and substantially increased profit levels. We continue to win market share through our strong fast-moving consumer goods presence and our leadership in both e-commerce and sustainable packaging," said Chief Executive Officer Miles Roberts.
DS Smith's UK business reported a 4.3% rise in revenue to GBP577 million from GBP553 million.
The company said corrugated box volumes were "strong", reflecting "continued success" with large fast-moving consumer goods customers and a "leading position" in e-commerce, which was replicated in the company's other European regions.
In Western Europe, DS Smith's revenue increased 8.0% to GBP784 million from GBP726 million. The company said corrugated box volumes were in line with the group average, with a good performance in France and Iberia, but particularly strong in Benelux.
The region's growth was driven by underlying rise in box prices.
Central Europe & Italy reported a 14% increase in revenue to GBP815 million from GBP717 million last year. Organic corrugated box volumes increased alongside the group average, reflecting, in particular, "a very good" performance from Italy, driven by e-commerce.
DS Smith said Ecopaper and Ecopack - a combined integrated packaging and paper group in Romania - also aided growth in the region.
In North America, DS Smith reported tripling its revenue to GBP341 million from GBP110 million last year. The company said the strong growth was driven by good trading conditions for paper operations in the region and the benefit of recent acquisition being accounted for a full period.
DS Smith said it continues to see "exciting opportunities" and remains confident about its outlook.
The company said the recovery of paper price increases - which has been ongoing in the past 12 to 18 months - is "now completed".
Roberts added: "DS Smith is extremely well positioned to capitalise on these ongoing growth trends and we are confident about the future prospects for the business."
DS Smith said it has a "clear trajectory" of achieving its medium-term growth target of reducing net debt to earnings before interest, tax, depreciation and amortisation of "less than or equal to" two times.
Shares in DS Smith were down 4.3% Thursday morning at 312.30 pence each.
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