10th Mar 2022 09:23
(Alliance News) - DS Smith PLC said on Thursday its trading in the third quarter has been in line with expectations, with the momentum seen in the first half carrying into the second.
In the period since November 1, the London-based packaging firm said volume growth and packaging price increases have "more than" offset ongoing input cost increases, leading to "good progress" in profitability and cash generation.
The company noted continued like-for-like volume growth in its fast-moving consumer goods unit, and expects mid-single-digit percentage like-for-like volume growth for the year to April 30.
DS Smith said that input costs, including energy and labour, continued to increase throughout the quarter.
Nonetheless, the company said that it recovered the costs through increased packaging pricing and expects this to continue into the new financial year.
DS Smith also noted that its production in Ukraine and Russia is currently suspended.
The company explained that its only involvement is a "minority investment" in an unnamed Ukrainian business, which serves customers predominantly in Ukraine with "limited" sales in Russia.
The carrying value of this investment was GBP23 million as at April 30 and the contribution to its full-year results was GBP4 million after tax.
Chief Executive Miles Roberts said: "Despite the increasing macro-economic and geo-political uncertainty, the outlook for the year remains unchanged by recent events with the second half of the year continuing to show good momentum.
"Our geographic footprint, secure supply chain and customer offering focussed on innovative sustainable packaging solutions remains compelling to our resilient customer base of fast-moving consumer goods multi-national companies and has driven continued good volume growth, despite the strong comparatives."
Shares in the FTSE 100 company were down 1.4% at 311.80 pence each on Thursday morning in London.
By Abby Amoakuh; [email protected]
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