6th Sep 2006 12:00
Smith (DS) PLC06 September 2006 6 September 2006 Chairman's Statement to the Annual General Meeting DS Smith Plc, the international packaging manufacturer and office productswholesaler, today issued the following statement at its Annual General Meeting. As indicated in the June announcement of the Group's Preliminary Results,profits in the first half of the current financial year are being adverselyaffected by both high input costs within Packaging and stronger competition inUK Office Products Wholesaling. However, we expect the strategic andoperational actions we have taken to positively impact results in the secondhalf and that trading performance for the full year will be as previouslyoutlined. In Paper and Corrugated Packaging, the market has been relatively strong duringthe summer period although the UK continues to be weaker than continentalEurope. The net cost of waste paper, our principal raw material, has continuedto increase as a result of rising demand from Asia and the falling value ofPackaging Recovery Notes. The increase in the Group's underlying energy costsin 2006/07 is expected to be in line with previous indications. To mitigate theongoing high level of input costs, we have implemented another paper priceincrease and we are also raising box prices further in both the UK andcontinental Europe. We recently announced another important strategic step towards raising thereturns of the Group's Paper operations through the proposed closure of TaplowMill and the sale of the Taplow site with a substantial net cash benefit. In Plastic Packaging, the improving trend of results in the second half of 2005/06 has continued in the early months of 2006/07. As previously indicated, Spicers' results in the first half of 2006/07 areexpected to be significantly lower than in the same period of last year. Animmediate priority is to raise profits in the important UK business and anextensive action programme is under way. We expect to see the initial benefitsof this programme in the second half of the financial year. Spicers'continental European businesses continue to perform satisfactorily. As is our normal practice, we will issue a trading update in mid October, priorto the close of the first half of the financial year. Antony HichensChairman Enquiries:DS Smith PlcTony Thorne, Group Chief Executive 020 7932 5000Gavin Morris, Group Finance DirectorPeter Aubusson, Group Communications Manager Financial Dynamics 020 7269 7121Richard Mountain/Susanne Walker This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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